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RalliV1_disable56 Strategy: The Bear Market Bottom Fisher

Nickname: EWO Catcher, Bear Market Hunter
Job: Specialist in curing all kinds of "oversold-itis"
Timeframe: 5 minutes

I. What is This Strategy?​

Simply put, RalliV1_disable56 is:

  • A "bottom fisher" that specifically looks for opportunities during declines
  • Uses Elliott Wave Oscillator (EWO), a relatively obscure indicator
  • Two playbooks for bull and bear markets - speaks human to humans, ghost to ghosts

Like a professional contrarian investor who specializes in bottom fishing 🤣

II. Core Configuration: "Take Profits When You Have Them, Accept Losses When You Don't"​

Take Profit Rules (ROI Table)​

0 minutes: 4% profit, I'm out
40 minutes: 3.2% works too
87 minutes: 1.8% also fine
After 201 minutes: Even mosquito meat is fine

Translation: This strategy isn't greedy - 4% profit is satisfying enough. If waiting too long, any profit gets booked.

Stop Loss Rules​

Fixed stop loss: -30% (this... is quite large)
Trailing stop: Activates at 3% profit, locks in 0.5%
Time stop: Held 140 minutes and still losing? Kick you out at -0.5%

Translation: Stop loss is set pretty wide (30%), but trailing stop and time stop provide backup - a "loose first, tight later" design.

III. 4 Buy Conditions: I've Categorized Them for You​

This strategy's buy conditions are designed by scenario, I've grouped them into 2 categories:

🎯 Category 1: Bear Market Bottom Fishing (3 conditions)​

Core Logic: Below EMA100, oversold bounce

Plain English:

"In a bear market, everyone's running, but I'm going in to pick up chips - but I have to wait until it's truly oversold."

Representative Conditions: #1, #2, #3

Classic Lines:

  • Condition #1: MA_buy < EMA_100 & EWO > 2.327 → "Bear market but momentum suddenly strengthening, could be a reversal signal"
  • Condition #2: RSI < 25 & EWO > -2.327 → "Dropped enough, momentum improving, let's go!"
  • Condition #3: EWO < -20.988 → "Extremely, extremely, extremely oversold, high bounce probability"

📈 Category 2: Bull Market Pullback (1 condition)​

Core Logic: Above EMA100, pullback entry

Plain English:

"In a bull market, everyone's buying, I'll wait for pullbacks to enter - chasing highs? Never in this lifetime."

Representative Condition: #4

Classic Line:

  • Condition #4: MA_buy > EMA_100 & RSI_fast < 35 & EWO > 2.327 → "Bull market pullback, momentum still there, let's go!"

IV. Protection Mechanisms: Three "Firewalls"​

Behind each buy condition are three layers of protection, like wearing three bulletproof vests:

Protection TypeFunctionPlain English
Fixed Stop Loss-30% floor"Maximum 30% loss, shouldn't happen... right?"
Trailing StopActivates at 3% profit"Lock some profit after making money so it doesn't give back"
Time Stop140 minutes + loss"Don't keep positions that dilly-dally too long"

Complaint: The 30% fixed stop loss is really quite large, if you hit extreme market conditions... 🙃

V. Sell Logic: Two Paths Available​

5.1 Sell Signal #1: Bullish Reversal​

HMA_50 > EMA_100 (major trend upward)
Close > SMA_9 (breakout above short-term MA)
Close > MA_sell * 0.997 (breakout above sell line)
RSI_fast > RSI_slow (momentum accelerating)

Plain English:

"In a bull market, price breaks above various MAs, momentum still accelerating - time to take profits."

5.2 Sell Signal #2: Bearish Fake Breakout​

Close < EMA_100 (still bear market)
Close > MA_sell * 0.991 (breakout above short-term line)
RSI_fast > RSI_slow (momentum improving)

Plain English:

"In a bear market, price suddenly breaks out - might be a fake breakout, run fast!"

5.3 Smart Sell Rejection​

There's also a clever trick:

if RSI < 45 and HMA_50 > EMA_100:
    return False  # Reject sell

Plain English:

"Long-term trend is up but RSI hasn't heated up yet? Don't sell yet, might still go higher!"

VI. This Strategy's "Personality Traits"​

✅ Pros (Praise Section)​

  1. Dual Scenario Adaptation: Can play in both bull and bear markets, won't lie flat in bear markets like some strategies
  2. Unique EWO Indicator: Few people use this indicator, might have alpha others don't see
  3. Triple Stop Loss: Although fixed stop is large, trailing and time stops compensate
  4. No Chasing Highs: All buy conditions require "price below some MA", no chasing

⚠️ Cons (Complaint Section)​

  1. 30% Stop Loss Too Large: Seriously, 30% is quite scary, recommend reducing it
  2. Fixed EWO Extremes: -20.988 might not suit all coins
  3. Few Sell Signals: Only 2 sell conditions, might miss some exit opportunities
  4. Too Many Parameters: Tons of optimizable parameters, easy to overfit

VII. Suitable Scenarios: When to Use It?​

Market EnvironmentRecommended ActionReason
Oscillating-to-downUse fullySpecialist in oversold bounces
Slow bullLower ewo_highMany pullback entry opportunities
Rapid rallyUse cautiouslyStrategy is conservative, can't keep up
SidewaysUse normallyBoth overbought and oversold signals available

VIII. Summary: How's This Strategy Really?​

One-Sentence Review​

"A strategy that specializes in picking up chips in bear markets, can also play bull market pullbacks, but don't expect it to chase rallies."

Who Should Use It?​

  • ✅ Contrarian investors who like bottom fishing
  • ✅ Patient holders who can accept larger drawdowns
  • ✅ Regulars in oscillating markets
  • ✅ People who want to use the obscure EWO indicator

Who Shouldn't Use It?​

  • ❌ Aggressive traders who chase highs and sell lows
  • ❌ People who can't accept 30% drawdowns (recommend changing stop loss)
  • ❌ Those who only play bull markets
  • ❌ Newbies who don't want to study EWO indicator

My Recommendations​

  1. Reduce Stop Loss: Change 30% to 10-15%, much better for psychological tolerance
  2. Optimize Per Coin: Different coins have different EWO extremes, need individual tuning
  3. Simulate First Then Live: Many parameters in this strategy, easy to overfit
  4. Watch RSI_fast: This is the core source of oversold signals

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

9.1 Core Logic: Using EWO to Find "Reversal Points"​

RalliV1_disable56 is a variant of the Rallipanos strategy series. 200+ lines of code, clear logic, primarily relies on the EWO indicator.

Its Money-Making Philosophy: Wait for others to panic before entering, wait for others to get greedy before exiting.

  • EWO Extreme Negative: Market panic, severe oversold, high reversal probability
  • Price Deviation from MA: Price deviated too much from moving average, mean reversion will bring it back
  • RSI Confirmation: Momentum indicator confirms oversold, not a fake drop

9.2 Performance in Different Markets (Plain English Version)​

Market TypePerformance RatingPlain English Explanation
📈 Slow Bull⭐⭐⭐⭐☆Pullback entries work well, no chasing highs, steady profits
🔄 Oscillating⭐⭐⭐⭐⭐Home territory! Eating overbought/oversold back and forth, trading fees become profits
📉 Downtrend⭐⭐⭐☆☆Bear market bottom fishing has opportunities, but timing is hard
⚡ Rally⭐⭐☆☆☆Strategy too conservative, can't keep up with rhythm, just watch others profit

One-Sentence Summary: Oscillating markets are its home turf, slow bulls also work, rallies forget it.

X. Want to Run This Strategy? Check These Configurations First​

10.1 Trading Pair Configuration​

Configuration ItemRecommended ValueComment
Number of pairs10-30Too many to handle
VolatilityMediumEWO not sensitive to too stable coins
Timeframe5 minutesMust use 5 minutes, other periods need re-optimization

10.2 Key Configuration File Settings​

# config.json key settings
"timeframe": "5m",
"startup_candle_count": 200,  # Need 200 candles for warmup
"trailing_stop": true,
"trailing_stop_positive": 0.005,
"trailing_stop_positive_offset": 0.03

10.3 Hardware Requirements (Important!)​

This strategy has moderate computation, doesn't demand much VPS memory:

Trading PairsMinimum MemoryRecommended MemoryExperience
1-10 pairs2GB4GBSmooth
10-50 pairs4GB8GBNormal
50+ pairs8GB16GBSlightly laggy

Warning: If you run 50+ pairs on an old computer, you might get computation timeouts 😅

10.4 Backtest vs Live Trading​

This strategy uses process_only_new_candles = True, backtest and live trading behavior are consistent.

Recommended Process:

  1. First optimize parameters with Hyperopt (at least 1000 rounds)
  2. Backtest with 6+ months of data
  3. Run simulation for 1-2 weeks
  4. Small capital live testing
  5. Gradually increase position

Don't go all-in on day one, no matter how good the strategy is, it needs to be broken in!

XI. Bonus: The Strategy Author's "Little Secrets"​

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

  1. Meaning of disable56: Commented out buy conditions #5 and #6 from the original strategy, suggesting the author found those two conditions didn't work well

    "Practice makes perfect, cut conditions that don't work"

  2. Time stop of 140 minutes: A very precise number, probably the author's tested optimal time

    "If not profitable after waiting too long, better to switch to something else"

  3. EWO parameters 5/200: Fast line 5, slow line 200, 40x difference

    "Short-term momentum vs long-term trend, extremes are opportunities"

XII. The Very Last Thing​

One-Sentence Review​

"A thoughtful bottom-fishing strategy that uses the obscure EWO indicator to find reversal points, performs well in oscillating markets."

Who Should Use It?​

  • ✅ People who can accept larger drawdowns (or willing to change stop loss)
  • ✅ Contrarian thinkers who like bottom fishing, not chasing highs
  • ✅ Oscillating market players
  • ✅ People with time for parameter optimization

Who Shouldn't Use It?​

  • ❌ Those with weak psychological tolerance
  • ❌ Those who only play rally markets
  • ❌ Those who don't want to study EWO indicator
  • ❌ Those with no time for backtesting and optimization

Manual Trader Recommendations​

If you want to manually use this strategy's signals:

  1. Watch for EWO rising from around -20
  2. Start watching closely when RSI_fast < 35
  3. In bull markets use condition #4, in bear markets use conditions #1-3
  4. Don't chase highs, wait for pullbacks!

XIII. ⚠️ Risk Re-emphasis (Must Read This Section)​

Backtests Are Beautiful, Live Trading Needs Caution​

RalliV1_disable56's historical backtest performance might be quite good - but there's a trap:

This strategy has many optimizable parameters, easy to "fit" to the optimal solution for past market conditions, but doesn't guarantee future profits.

Simply put: Memorizing answers is easy, doing new problems is hard.

Hidden Risks of Complex Strategies​

In live trading, complex logic can lead to:

  • Parameter Sensitivity: Switch coins and previously optimized parameters might be useless
  • Overfitting: The more finely tuned the parameters, the more future performance might suffer
  • Signal Reduction: 4 buy conditions vs only 2 sell conditions, more entries than exits

My Recommendations (Sincere Advice)​

1. Change 30% stop loss to 10-15%
2. Optimize parameters separately for 2-3 coins
3. Run at least 6 months of backtest data
4. Simulation trading for at least 2 weeks before live
5. Check monthly whether parameters need re-optimization

Remember: No matter how good the strategy is, when the market teaches you a lesson, it won't give you a heads up. Test with small positions, staying alive is most important! 🙏