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Debunking

I believe that most quantitative trading strategies don't make sense, and only a handful of exceptional teams can actually beat the market index. That's why I initiated an experiment using a straightforward automated trading strategy to trade in cryptocurrencies, starting with a $100K fund, in order to debunk the myths surrounding quantitative trading.

A long-term automated trading experiment

The Strategy

This strategy, primarily applied on the Binance platform, is a blend of carefully selected technical indicators and market behavior assessments, tailored to identify promising trading opportunities in the volatile crypto market.

 

My approach begins with a meticulous selection of cryptocurrencies based on their recent performance metrics like price change percentage and trading volume, coupled with a range-based filter on their price. I employ technical analysis tools such as the Simple Moving Average (SMA) and the Relative Strength Index (RSI) across various time frames — from 4 hours to 5 minutes — to gauge market trends and momentum. A cryptocurrency is deemed favorable if its closing price is consistently above the SMA, and its RSI is higher than its SMA. This dual-condition check ensures that I'm not just following the trend but also considering the underlying momentum.

 

Apart from technical indicators, I place significant emphasis on market cap analysis, turnover ratios, and circulation ratios, often comparing these metrics against established coins like Ethereum to assess market sentiment and stability. I consciously avoid newly listed coins and those that have been recently bought, to minimize risk from market volatility and overexposure. My strategy isn't just about selecting the right coins; it's also about timely execution. Using automated scripts, I efficiently execute trades on chosen cryptocurrencies and set limit sell orders to secure profits at targeted margins. This blend of strategic selection, rigorous analysis, and automated execution defines my unique approach to navigating the complexities of the cryptocurrency market.

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1.  Identificating Rising of Coins every 5 minutes:
  • Price > SMA 14 and RSI > RSI SMA 14 in 5m, 15m, 1h, 4h interval

 

2. Volume Filter:
  • Only consider coins with a trading volume exceeding 50 million USD in the last 24 hours. This helps to ensure liquidity and reduces the risk of investing in low-volume assets.

  • Quote asset volume (USDT) in 5m interval must exceed 100K USD.

 

3. Market Cap and Price Range Criteria:
  • Focus on coins with a market capitalization between 100 million and 5 billion USD. This range typically includes mid-cap cryptocurrencies, which often offer a balance between stability and growth potential.

  • The price of the coins should be within the range of 0.001 to 1,000 USD. This broad range accommodates a variety of assets while excluding those that are too cheap (potentially high risk) or too expensive (potentially low growth potential).

 

4. Selection Based on Trading Volume:
  • From the filtered list, select the top 10 coins based on their trading volume. This prioritization helps in identifying the most actively traded and hence potentially more stable or promising cryptocurrencies.

 

5. Investment Strategy:
  • Allocate an investment of 10,000 USDT to each eligible coin, with the total investment ceasing once funds are depleted or the list of top 10 coins is exhausted. This approach diversifies the investment across multiple assets, spreading the risk.

 

6. Profit Taking Strategy:
  • Monitor the prices of these investments every 5 minutes. Close any position (sell the coin) that experiences a price rise of 5% or more (Limit order with a price reaching target profit). This rule ensures timely profit-taking and mitigates the risk of holding onto assets during potential market downturns.

Operation

Years:
Months:
Days:
Hours:
Minutes:
0
6
3
22
5

Performance

Initial Fund: 
Book Loss:
Total Profit:
Net Profit:
Annualized Return:
100,000 USDT
- 9,480 USDT
32,790 USDT
23,310 USDT
46.38%

WITE LIST

WOO, DYDX, UNI, COMP, AGLD, DOGE, AVAX, WLD, ICP, FIL, LINK, MATIC, DOT, INJ, ARB, ATOM, OP, NEAR, IMX, ARKM, STRAX, STX, SAND, SEI, MAV, ORDI, 1000SATS, FET, MINA, KSM, ONE, EGLD, TIA, APT, 1INCH, AR, APE, GALA, MANA, FLOW, CHZ, BLUR

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