How a Simple Cryptocurrency Trading Strategy Converted $ 100 to $ 36,205 in 10 Months

Before we get into the details of how a simple rule created the insane ROI mentioned in the title, let’s get one thing straight.

You cannot repeat this result.

Actually, no one can do that. Even a trading robot would not be able to replicate this particular strategy in real life as it is more of a thought experiment, a proof of concept than a real way of making money in cryptocurrency trading. The trading fees alone would nullify this particular strategy for most traders.

How a Simple Cryptocurrency Trading Strategy Converted $ 100 to $ 36,205 in 10 Months
How a Simple Cryptocurrency Trading Strategy Converted $ 100 to $ 36,205 in 10 Months

But that doesn’t mean it’s useless; In fact, it’s the perfect way to demonstrate how a simple strategy can work for traders in real life.

So let’s get started. What could you do with this algorithm now and today?

What does “Buy in 80, Sell in 12 hours” mean?

This is the basic requirement. In collaboration with the data company The TIE, Cointelegraph Markets Pro created the VORTECSâ ?? ¢ Score developed, an algorithmic determination of how bullish or bearish the current market conditions are for a particular crypto-asset.

The rating is based on historical data and essentially searches the entire history of a coin or token looking for conditions similar to the current ones.

Look for a range of similarities and outliers: for example, trading volume, recent price action, social sentiment, and even the amount of tweets about that asset.

When you find similarities, analyze what happened next. Has the asset gone up or down? What was the consequence of this step? How important was the rise or fall?

The combination of all this data creates the VORTECS® Score, a dynamic and constantly evolving assessment of the current market conditions for every asset listed in the system. The higher the score, the more bullish the outlook and the more confident the algorithm is. In contrast, a very low reading is bearish (and equally confident). A neutral value of 50 means that the algorithm does not see any significant correlation between the current conditions and the past price development.

The Markets Pro team began testing a number of strategies the day the algorithm was activated.

A strategy by “Buy in 80, sell in 12 hours” This means that the test will “buy” any asset that exceeds 80 in value, which is considered highly bullish. And then you “sell” the asset again after exactly 12 hours.

Of course, this does not happen on a stock exchange, but on a spreadsheet. And since the test wants to keep the stocks of all assets within its range the same, it is reweighted every hour.

For example, If SOL exceeded 80 and you were the only asset with that high score, the test would place 100% of your current portfolio in SOL. But if BNB also exceeds 80, the next hourly rebalancing test would assign half of its position to BNB.

Why can’t you do that

First, let’s say you are human when you read this. If you are human you need to sleep. The test works 24 hours a day, every day, and has been for more than ten months. Even new parents have a baby break every now and then.

On second place, The algorithm does not take into account liquidity or order depth for a specific asset on a specific exchange. You buy at the current price and you sell at the current price, which we all know is not necessarily realistic.

And thirdly, the hourly rebalancing commissions would be prohibitive no matter how much BNB or FTT you have.

Why is it a valuable test?

The point is to evaluate whether the VORTECS® algorithm is good at its work.

Are you right most of the time when you see bullish conditions? Do prices tend to go up as the score goes up? For this test, of course, the answer is yes.

And while the strategy “Buy in 80, sell in 12 hours” It’s an outlier, there are other strategies that have produced a hypothetical massive return on investment.

For example, Buy in 80, sell in 24 hours. That sits in the “merit” of the 13.099%. Other good strategies are:

  • Buy in 90, sell in 168 hours | + 4.544%.
  • Buy at 80, Sell at 80 | + 14.862%.

In fact, Bitcoin has been offering a 49.5% return since testing began on January 5, 2021. any of the strategies it has outperformed the return on simply holding BTC.

And that shows that VORTECS® is working properly. Overall, over time, they show that the historical trading conditions of digital assets can be a useful indicator of the current state of those assets.

In other words, a high VORTECS® score has a proven correlation with the price increase. Not in all cases and not for all assets … but overall, this ten month test turned out to be a convincing case.

Warren Buffett (perhaps paraphrasing Hegel) once said: “What we learn from history is that people do not learn from it.”

(As a cryptocurrency skeptic, you may want to reconsider your position.)

This is what VORTECSâ ?? ¢ punctuation is all about. Learn from history. And that’s why a hypothetical return of 36.205% is important.

It tells us we’re seeing the right story.

Cointelegraph Markets Pro is exclusive to its members at a monthly price of $ 99 or included annually with two free months. It has a 14-day money-back policy to ensure it meets the needs of subscribers in cryptocurrency trading and investment research and can be canceled at any time.

Cointelegraph is a financial information publisher, not an investment advisor. We do not offer individual or personalized investment advice. Cryptocurrencies are volatile investments and carry significant risk, including the risk of permanent loss and total loss. Past performance is not an indication of future results. Illustrations and graphics are correct at the time of preparation or as otherwise stated. Strategies tested in real time are not recommendations. Consult your financial advisor before making any financial decisions.

All investment returns shown are as of 10/23/2021, 12:00 PM ET.

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