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Even after the pullback, this crypto trading algo’s $100 bag is now worth $20,673

Even after the pullback, this crypto trading algo’s $100 bag is now worth $20,673
Written by publisher team

Exactly one year ago, on January 9, 2021, Cointelegraph launched its subscription-based data information service, Markets Pro. On that day, Bitcoin (BTC) was trading around $40,200, and today’s price of $41,800 is a 4% year-over-year increase. The automated testing strategy based on Markets Pro’s flagship index, VORTECS™, yielded an ROI of 20,573% over the same period. This is what that means for retailers like you and me.

How can I get 20000% annually?

The short answer is – you can’t. Neither can anyone else. But that doesn’t mean crypto investors can’t dramatically improve their cryptocurrency trading game using the same principles that underlie this amazing ROI.

The number in the headline comes from the live testing of various trading strategies based on VORTECS™ that started on the day the platform was launched. Here how it works.

VORTECS™ Score is an AI-powered trading indicator whose job it is to scrutinize the past performance of each digital asset and identify multidimensional combinations of trading and social sentiment metrics that have historically been bullish or bearish. For example, consider a hypothetical situation where every time Solana (SOL) sees an additional 150% of positive tweets paired with 20%-30% trading volume for a fixed price, the price of which increases dramatically over the next 2-3 days.

When a historically bullish order like this one is detected in SOL real-time data, for example, the algorithm will assign the asset a strong VORTECS™ score. The traditional limit for an uptrend is 80, and the more confident the model is that the future outlook is favorable, the higher the result.

In order to get a feel of how the model performs, starting from day one, the Markets Pro team has live-tested a number of hypothetical trading strategies based on “buying” all assets that exceed a certain VORTECS™ result and then “selling” them for a fixed amount of time.

These transactions were executed on a spreadsheet rather than an exchange (and thus no fees to cash out), 24/7, and involved complex algorithmic rebalancing to ensure that all assets with a benchmark score at any given moment were held in equal shares. in the wallet. In short, following these strategies was something only a computer could do.

The winning strategy, “Buy 80, Sell 24 Hours” involved buying all the assets that reached the 80 degree and selling them exactly 24 hours later. This algorithm yielded 20,573% of hypothetical gains within one year. Even among other humanly impossible strategies, he’s an exception: the second best, “buy 80, sell 12 hours” achieved 13,137%, and the third, “buy 80, sell 48 hours,” “just” achieved 5747%.

down to earth

What these crazy numbers show is that the returns generated by high VORTECS™ assets stack up well over time. But what’s the point if realistic traders can’t replicate the compound strategy? A more practical way to look at the performance of the VORTECS™ model is by averaging returns after high scores. There is no fancy rebalancing, just a small average change in price shown by all high-score tokens after X hours of reaching a Y-score. Here are the numbers:

This looks more modest, doesn’t it? However, if you think about it, the picture these averages paint is no less powerful than the staggering hypothetical annual returns. The table shows strong positive price dynamics after the high points, averaged across all asset types and in all market conditions that occurred throughout the year.

The trend is clear: tokens hitting 80, 85 and 90 VORTECS™ tend to go higher within the next 168 hours. Higher scores correlate with greater payoffs: the algorithm’s stronger confidence in the upside of the observed conditions, indeed, comes with greater returns (although higher scores are also rare). Another important factor is time: the longer you wait after reaching a reference limit, the higher the average return on investment.

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In this sense, instead of trying to follow the complex algorithm strategy of “buy 80, sell 24 hours” (which is, again, a futile exercise), real-world traders can maximize their fortunes by buying at higher scores and holding them for longer periods.

Unpredictability

A separate stream of in-house Markets Pro research examined whether some coins were more likely than others to show historically bullish trading conditions before massive price increases. This turned out to be the case, with coins such as AXS, MATIC, AAVE and LUNA leading the pack in terms of the most reliable positive price dynamics after the historically preferred settings. Overall, the majority of high-recurring companies generated strong positive returns.

After a full year of operation, these disparate pieces of quantitative evidence—the mind-blowing ROI for algorithmic live testing strategies, AVM gains for high VORTECS™ assets, and average steady returns for individual coins after high scores—make a compelling case-to-use The “history rhymes” approach to cryptocurrency trading.

Obviously, a positive historical outlook, recorded by a strong VORTECS™ result, is never a guarantee of an imminent rally. However, there is an additional pair of algorithmic eyes that are able to see and compare across billions of historical data points to alert you to bullish settings for digital assets. before it comes true It can be an incredibly powerful addition to any trader’s toolkit.

Cointelegraph is a financial information publisher, not an investment advisor. We do not provide personal or individual investment advice. Cryptocurrencies are volatile investments and involve significant risks including the risk of permanent and complete loss. Past performance is not indicative of future results. Figures and graphs are correct at the time of writing or as otherwise specified. Directly tested strategies are not recommendations. Consult your financial advisor before making financial decisions.

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