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Simple Strategy: The "Minimalist" That Lives Up to Its Name

Nickname: Less is More
Job: Quick-Draw Trend Follower
Timeframe: 5 minutes

I. What Is This Strategy?​

Simply put, Simple is:

  • Only uses 3 indicators (MACD, Bollinger Bands, RSI)
  • Only has 1 buy condition
  • Only has 1 sell condition
  • Take-profit at 1%, stop-loss at 25%

Just like its name - Simple, so simple it can't be simpler. The person who wrote the book was probably a minimalist too, thinking "trading doesn't need to be complicated."

II. Core Configuration: Basically "Quick In, Quick Out"​

Take-Profit Rule (ROI Table)​

"0": 0.01  # Run at 1% profit

Translation: Get out with 1% profit, no greed. Buy at $100, sell at $101. Coffee hasn't even cooled down yet, trade is done.

Stop-Loss Rule​

stoploss = -0.25  # Stop-loss at 25% loss

Translation: This stop-loss is ridiculously wide! Buy at $100, has to drop to $75 before giving up. Either make $1 and run, or lose $25 and admit defeat. This math is a bit extreme, right?

III. 1 Buy Condition: Triple Confirmation Required​

Although called Simple, the buy condition isn't simple at all - three indicators must all be satisfied!

🎯 Buy Condition Breakdown​

(
    (dataframe['macd'] > 0) &                              # Condition 1
    (dataframe['macd'] > dataframe['macdsignal']) &        # Condition 2
    (dataframe['bb_upperband'] > dataframe['bb_upperband'].shift(1)) &  # Condition 3
    (dataframe['rsi'] > 70)                                # Condition 4
)

Plain English Translation:

ConditionCodeHuman Language
Condition 1MACD > 0"Trend is going up, not down"
Condition 2MACD > Signal"Momentum is strengthening, just broke through"
Condition 3Bollinger upper band up"Price is breaking out, volatility increasing"
Condition 4RSI > 70"Already risen quite a bit"

Classic Line:

"MACD golden cross confirms trend, Bollinger band up confirms breakout, RSI above 70 confirms strength... Alright, all four conditions met, let's go!"

🤔 Wait, RSI > 70?​

Smart readers might ask: RSI above 70 is overbought, right? Shouldn't you sell when overbought?

Good question! This strategy's thinking is:

  • Normal logic: RSI > 70 = overbought = should sell
  • Simple logic: RSI > 70 = strong = keep buying!

This is a "chase the rally" strategy, believing "the strong get stronger." In strong trends, overbought can become more overbought, RSI can go to 90 or even 95.

So this strategy's motto is:

"Who cares about overbought or not, if the trend is there, get on board!"

IV. Sell Logic: Run at RSI 80​

Sell Condition​

(dataframe['rsi'] > 80)

Plain English:

"RSI hit 80? That's too crazy, I'm out!"

That simple. RSI breaks 80, sell. Doesn't matter how much profit or loss.

Profit Space Analysis​

From RSI 70 entry to RSI 80 exit:

  • Usually has some price gain (depends on market)
  • But if RSI turns down from 70, you're screwed
  • 1% take-profit will trigger before RSI 80

V. This Strategy's "Personality Traits"​

✅ Pros (Praise Section)​

  1. Simplicity to the max: 3 indicators, 1 buy point, 1 sell point, elementary schoolers can understand
  2. Fast execution: Low computation, old computers can run it
  3. Has theoretical support: From published trading book, not made up

⚠️ Cons (Roast Section)​

  1. Stop-loss too wide: 25% loss before stopping, who can handle that?
  2. Take-profit too early: Run at 1%, miss big trends
  3. Buy at high: RSI > 70 to buy, like buying tickets at the mountain top
  4. No trailing stop: Floating profit can become floating loss

VI. Applicable Scenarios: When to Use It?​

Market EnvironmentRecommended ActionReason
Strong trend bull market✅ Can useFollow trend, quick in and out
Ranging market❌ Don't useRSI whipsaws between 70-80 repeatedly
Bear market❌ Don't useNo buy signals, or buy and get trapped
High volatility⚠️ Use cautiouslyWide stop-loss might save you, or lose more

VII. Summary: How Is This Strategy Really?​

One-Sentence Review​

"Named Simple, logic is indeed simple, but take-profit and stop-loss settings are a bit extreme."

Who Should Use It?​

  • ✅ Quantitative beginners: Simple code, easy to understand and modify
  • ✅ Trend traders: Believe "strong get stronger"
  • ✅ Short-term lovers: Quick in and out, no lingering

Who Shouldn't Use It?​

  • ❌ Risk averse: 25% stop-loss is too wide
  • ❌ Trend followers: 1% take-profit too short, can't catch big trends
  • ❌ Ranging market traders: This strategy gets repeatedly slapped in ranging markets

My Recommendations​

  1. Adjust stop-loss: Change from 25% to around 10%, protect capital
  2. Expand take-profit: Change from 1% to 2-3%, give trend some room
  3. Add trailing stop: Pair with trailing stop to lock in floating profits
  4. Only use in trending markets: Don't bother in ranging markets

VIII. What Markets Can This Strategy Make Money In?​

8.1 Core Logic: "Quick-Draw" Momentum Chaser​

Simple is a classic short-term trend breakout strategy. Its profit philosophy is:

  • Believe in strong getting stronger: Enter only when RSI > 70, chasing strength
  • Quick in and out: 1% take-profit or RSI > 80 and run
  • No left-side trading: Don't catch falling knives, only chase rallies

8.2 Performance in Different Markets (Plain Speak Version)​

Market TypePerformance RatingPlain English Explanation
📈 Strong trend bull⭐⭐⭐⭐☆RSI 70-80 is normal rise, chasing works
🔄 Ranging market⭐⭐☆☆☆RSI goes back and forth through 70-80, buy then drop, sell then rise
📉 Bear market⭐☆☆☆☆MACD < 0 never buys, or buy and get trapped
⚡️ High volatility⭐⭐⭐☆☆Wide stop-loss might save you, or might lose more

One-sentence summary: Only suitable for trending markets, forget about ranging and bear markets.

IX. Want to Run This Strategy? Check These Configs First​

9.1 Trading Pair Configuration​

Config ItemRecommended ValueComment
Number of pairs5-20Too many can't monitor, too few miss opportunities
Timeframe5 minutesKeep default, this is the designed period
Pair typeHigh liquidity majorsAltcoins too volatile, easily stopped

9.2 Hardware Requirements (Important!)​

This strategy is lightweight, low computation:

Number of PairsMinimum MemoryRecommended MemoryExperience
1-10 pairs1GB2GBSmooth
10-50 pairs2GB4GBFluid
50+ pairs4GB8GBSufficient

Good news: Old computers can run it too, no VPS needed!

9.3 Backtest vs Live​

Note:

  • Backtest may overstate RSI 70-80 gains
  • Live trading has slippage and fees, 1% profit might become 0.5%
  • Recommend setting take-profit to 1.5-2% for buffer

X. Bonus: The Author's "Little Secrets"​

Looking carefully at the code, you'll find some interesting things:

  1. RSI period set to 7: More sensitive than default 14, reacts faster

    "Don't want to wait too long, signals come quicker!"

  2. Bollinger period set to 12: Narrower than default 20, breakouts more frequent

    "More breakout signals, more trading opportunities"

  3. Buy comment says "optional filter, need to investigate": Author isn't sure if RSI > 70 is necessary

    "This condition might need research... eh, let it be for now"

XI. Final Words​

One-Sentence Review​

"Simple strategy lives up to its name, simple to the max. But take-profit and stop-loss need optimization, don't copy default parameters."

Who Should Use It?​

  • ✅ Quantitative beginners: One of the best entry strategies
  • ✅ People who want to learn: Clear code, good for studying
  • ✅ Short-term traders: Quick in-out style

Who Shouldn't Use It?​

  • ❌ People seeking high win rates: This strategy may not have high win rate
  • ❌ People seeking big profits: 1% take-profit can't catch big trends
  • ❌ Risk averse: 25% stop-loss is too exciting

Manual Trader Recommendations​

If you trade manually, you can borrow this thinking:

  1. Look at overall trend (MACD > 0)
  2. Wait for momentum confirmation (MACD golden cross)
  3. Check price breakout (Bollinger upper band up)
  4. Confirm strength (RSI > 70)
  5. After entry, set take-profit and stop-loss

But remember: Manual trading can use smaller stop-loss and bigger take-profit!

XII. ⚠️ Risk Emphasis (Must Read)​

Backtesting is Beautiful, Live Trading Be Careful​

Simple strategy's historical backtests might look okay - but there's a trap:

Because logic is simple, many think it's "robust." But actually, simple strategies often rely too much on specific market conditions.

Simply put: Backtest is tailwind, live trading might be headwind.

Hidden Risks of Simple Strategies​

In live trading, simple strategies may cause:

  • Market environment changes: Strategy only fits trending markets, ranging markets repeatedly stop out
  • Parameter sensitivity: Few parameters, but each is critical
  • Slippage erodes profit: 1% profit, fees plus slippage might leave 0.5%

My Recommendations (Real Talk)​

1. Test with small capital first, don't go all-in
2. Adjust stop-loss to 10-15%, protect capital
3. Raise take-profit to 2-3%, give trend some room
4. Add trailing stop to lock in floating profit
5. Only use in trending markets, turn off in ranging markets

Remember: No matter how simple the strategy, the market isn't simple. Light position testing, survival is most important! 🙏