Digital Currency Spot Multi-variety Double-EMA Strategy (Tutorial)

Digital Currency Spot Multi-variety Double-EMA Strategy (Tutorial)

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7 min read

At the request of community users who want to have a multi-variety double-EMA strategy for design reference. In this article, we will implement a multi-variety double-EMA strategy. Comments will be written on the strategy code to for convenient understanding and learning. Let more newcomers of programming and quantitative trading get a quick start.

Strategy ideas

The logic of the double-EMA strategy is very simple, that is, two EMAs. An EMA (fast line) with a small parameter period and an EMA (slow line) with a large parameter period. If the two lines have a golden cross (the fast line goes through the slow line from the bottom to the top), then we buy and go long; and if the two lines have a dead cross (the fast line goes through the slow line from the top to the bottom), then we sell and go short. We use EMA here.

However, the strategy should be designed as multi-variety, so the parameters of each variety may be different (different varieties use different EMA parameters), so a "parameter group" method should be used to design parameters.

The parameters are designed in the string form, with each parameter comma separated. Parse these strings when the strategy starts running. The execution logic match to each variety (trading pair). The strategy rotated detects the market of each variety, the triggering of trading conditions, chart printing, etc. After all varieties are rotated once, summarize the data and display the table information on the status bar.

The strategy is designed to be very simple and suitable for newcomers' learning, with only 200+ lines of code in total.

Strategy code

javascript// Function: cancel all takers of the current trading pair
function cancelAll(e) {
    while (true) {
        var orders = _C(e.GetOrders)
        if (orders.length == 0) {
            break
        } else {
            for (var i = 0 ; i < orders.length ; i++) {
                e.CancelOrder(orders[i].Id, orders[i])
                Sleep(500)
            }
        }
        Sleep(500)
    }
}

// Functionn: calculate the profit/loss in real-time
function getProfit(account, initAccount, lastPrices) {
    // account is the current account information, initAccount is the initial account information, lastPrices is the latest price of all varieties
    var sum = 0
    _.each(account, function(val, key) {
        // Iterate through all current assets, calculate the currency difference of assets other than USDT, and the amount difference
        if (key != "USDT" && typeof(initAccount[key]) == "number" && lastPrices[key + "_USDT"]) {
            sum += (account[key] - initAccount[key]) * lastPrices[key + "_USDT"]
        }        
    })
    // Return to the profit and loss of the asset based on the current prices
    return account["USDT"] - initAccount["USDT"] + sum
}

// Function: generate chart configuration
function createChartConfig(symbol, ema1Period, ema2Period) {
    // symbol is the trading pair, ema1Period is the first EMA period, ema2Period is the second EMA period
    var chart = {                                        
        __isStock: true,    
        extension: {
                layout: 'single', 
                height: 600, 
        },
        title : { text : symbol},                       
        xAxis: { type: 'datetime'},           
        series : [                                          
            {                                      
                type: 'candlestick',    // K-line data series                         
                name: symbol,   
                id: symbol,
                data: []                                           
            }, {                                      
                type: 'line',           // EMA data series
                name: symbol + ',EMA1:' + ema1Period,          
                data: [],               
            }, {
                type: 'line',           // EMA data series
                name: symbol + ',EMA2:' + ema2Period,
                data: []
            }
        ]
    }
    return chart    
}

function main() {
    // Reset all data
    if (isReset) {
        _G(null)            // Clear data of all persistent records
        LogReset(1)         // Clear all logs
        LogProfitReset()    // Clear all return logs
        LogVacuum()         //Release the resources occupied by the real bot database
        Log("Reset all data", "#FF0000")   // Print messages
    }

    // Parameter analysis
    var arrSymbols = symbols.split(",")             // Comma-separated string of trading varieties
    var arrEma1Periods = ema1Periods.split(",")     // Parameter string for splitting the first EMA
    var arrEma2Periods = ema2Periods.split(",")     // Parameter string for splitting the second EMA
    var arrAmounts = orderAmounts.split(",")        // Splitting the amount of orders placed for each variety
    var account = {}                                // Variables used for recording current asset messages
    var initAccount = {}                            // Variables used for recording initial asset messages
    var currTradeMsg = {}                           // Variables used for recording whether current BAR trades
    var lastPrices = {}                             // Variables used for recording the latest price of monitored varieties
    var lastBarTime = {}                            // Variable used for recording the time of the last BAR, used to judge the update of BAR when drawing
    var arrChartConfig = []                         // Used for recording chart configuration message and draw

    if (_G("currTradeMsg")) {                       // For example, restore currTradeMsg data when restarting
        currTradeMsg = _G("currTradeMsg")
        Log("Restore records", currTradeMsg)
    }

    // Initialize account
    _.each(arrSymbols, function(symbol, index) {
        exchange.SetCurrency(symbol)
        var arrCurrencyName = symbol.split("_")
        var baseCurrency = arrCurrencyName[0]
        var quoteCurrency = arrCurrencyName[1]
        if (quoteCurrency != "USDT") {
            throw "only support quoteCurrency: USDT"
        }
        if (!account[baseCurrency] || !account[quoteCurrency]) {
            cancelAll(exchange)
            var acc = _C(exchange.GetAccount)
            account[baseCurrency] = acc.Stocks
            account[quoteCurrency] = acc.Balance
        }

        // Initialize chart-related data
        lastBarTime[symbol] = 0
        arrChartConfig.push(createChartConfig(symbol, arrEma1Periods[index], arrEma2Periods[index]))
    })
    if (_G("initAccount")) {
        initAccount = _G("initAccount")
        Log("Restore initial account records", initAccount)
    } else {
        // Initialize the initAccount variable with the current asset information
        _.each(account, function(val, key) {
            initAccount[key] = val
        })
    }
    Log("account:", account, "initAccount:", initAccount)   // Print asset information

    // Initialize the chart object
    var chart = Chart(arrChartConfig)
    // Chart reset
    chart.reset()

    // Strategy main loop logic
    while (true) {
        // Iterate through all varieties and execute the double-EMA logic one by one
        _.each(arrSymbols, function(symbol, index) {
            exchange.SetCurrency(symbol)               // Switch the trading pair to the trading pair of symbol string record
            var arrCurrencyName = symbol.split("_")    // Split the trading pairs with the "_" symbol
            var baseCurrency = arrCurrencyName[0]      // String for trading currencies
            var quoteCurrency = arrCurrencyName[1]     // String for denominated currency

            // Obtain the EMA parameters of the current trading pair according to the index
            var ema1Period = parseFloat(arrEma1Periods[index])
            var ema2Period = parseFloat(arrEma2Periods[index])
            var amount = parseFloat(arrAmounts[index])

            // Obtain the K-line data of the current trading pair
            var r = exchange.GetRecords()
            if (!r || r.length < Math.max(ema1Period, ema2Period)) {  // Return directly if K-line length is insufficient
                Sleep(1000)
                return 
            }
            var currBarTime = r[r.length - 1].Time         // Record the current BAR timestamp
            lastPrices[symbol] = r[r.length - 1].Close     // Record the latest current price

            var ema1 = TA.EMA(r, ema1Period)    // Calculate EMA indicators
            var ema2 = TA.EMA(r, ema2Period)    // Calculate EMA indicators
            if (ema1.length < 3 || ema2.length < 3) {    // The length of EMA indicator array is too short, return directly
                Sleep(1000)
                return 
            }
            var ema1Last2 = ema1[ema1.length - 2]   // EMA on the penultimate BAR
            var ema1Last3 = ema1[ema1.length - 3]   // EMA on the third from the last BAR
            var ema2Last2 = ema2[ema2.length - 2]
            var ema2Last3 = ema2[ema2.length - 3]

            // Write data to the chart
            var klineIndex = index + 2 * index
            // Iterate through the K-line data
            for (var i = 0 ; i < r.length ; i++) {
                if (r[i].Time == lastBarTime[symbol]) {         // Draw the chart, update the current BAR and indicators
                    // update
                    chart.add(klineIndex, [r[i].Time, r[i].Open, r[i].High, r[i].Low, r[i].Close], -1)  
                    chart.add(klineIndex + 1, [r[i].Time, ema1[i]], -1)
                    chart.add(klineIndex + 2, [r[i].Time, ema2[i]], -1)
                } else if (r[i].Time > lastBarTime[symbol]) {   // Draw the charts, add BARs and indicators
                    // add
                    lastBarTime[symbol] = r[i].Time             // Update timestamp
                    chart.add(klineIndex, [r[i].Time, r[i].Open, r[i].High, r[i].Low, r[i].Close])  
                    chart.add(klineIndex + 1, [r[i].Time, ema1[i]])   
                    chart.add(klineIndex + 2, [r[i].Time, ema2[i]])   
                }
            }

            if (ema1Last3 < ema2Last3 && ema1Last2 > ema2Last2 && currTradeMsg[symbol] != currBarTime) {
                // Golden cross
                var depth = exchange.GetDepth()   // Obtain the depth data of current order book
                var price = depth.Asks[Math.min(takeLevel, depth.Asks.length)].Price   // Take the 10th grade price, taker
                if (depth && price * amount <= account[quoteCurrency]) {   // Obtain deep data normally with enough assets to place an order
                    exchange.Buy(price, amount, ema1Last3, ema2Last3, ema1Last2, ema2Last2)   // Place a buy order
                    cancelAll(exchange)     // Cancel all makers
                    var acc = _C(exchange.GetAccount)   // Obtain account asset information
                    if (acc.Stocks != account[baseCurrency]) {  // Detect changes in account assets
                        account[baseCurrency] = acc.Stocks      // Update assets
                        account[quoteCurrency] = acc.Balance    // Update assets
                        currTradeMsg[symbol] = currBarTime      // Record that the current BAR has been traded
                        _G("currTradeMsg", currTradeMsg)        // Persistent records
                        var profit = getProfit(account, initAccount, lastPrices)  // Calculate profits
                        if (profit) {
                            LogProfit(profit, account, initAccount)    // Print profits
                        }
                    }
                }
            } else if (ema1Last3 > ema2Last3 && ema1Last2 < ema2Last2 && currTradeMsg[symbol] != currBarTime) {
                // dead cross
                var depth = exchange.GetDepth()
                var price = depth.Bids[Math.min(takeLevel, depth.Bids.length)].Price
                if (depth && amount <= account[baseCurrency]) {
                    exchange.Sell(price, amount, ema1Last3, ema2Last3, ema1Last2, ema2Last2)
                    cancelAll(exchange)
                    var acc = _C(exchange.GetAccount)
                    if (acc.Stocks != account[baseCurrency]) {
                        account[baseCurrency] = acc.Stocks
                        account[quoteCurrency] = acc.Balance
                        currTradeMsg[symbol] = currBarTime
                        _G("currTradeMsg", currTradeMsg)
                        var profit = getProfit(account, initAccount, lastPrices)
                        if (profit) {
                            LogProfit(profit, account, initAccount)
                        }
                    }
                }
            }            
            Sleep(1000)
        })

        // Table variables in the status bar
        var tbl = {
            type : "table", 
            title : "Account Information",
            cols : [], 
            rows : []
        }
        // Write data into the status bar table structure
        tbl.cols.push("--")
        tbl.rows.push(["initial"])
        tbl.rows.push(["current"])
        _.each(account, function(val, key) {
            if (typeof(initAccount[key]) == "number") {
                tbl.cols.push(key)
                tbl.rows[0].push(initAccount[key])   // initial
                tbl.rows[1].push(val)                // current
            }            
        })
        // Show status bar table
        LogStatus(_D(), "\n", "profit:", getProfit(account, initAccount, lastPrices), "\n", "`" + JSON.stringify(tbl) + "`")
    }
}

Strategy backtest

It can be seen that ETH, LTC and ETC are triggered according to the Golden Cross and Dead Cross of EMA, and tradings have occurred.

We can also take a simulation bot for testing.

Strategy source code: https://www.fmz.com/strategy/333783

The strategy is used for backtesting, learning strategy design only, and it should be used with caution in the real bot.

From: https://blog.mathquant.com/2022/10/27/digital-currency-spot-multi-variety-double-ema-strategy-tutorial.html