Interpretation of cryptocurrency market on Dec 6 2022
Yesterday the US stocks opened lower, and the crypto market fell slightly. There is still no need to make any adjustments in strategy. The real difficulty in the follow-on market is not in the analysis but in the execution.
For example: for the Bollinger Bands, is it better to go short after reaching the upper rail and long after reaching the lower rail? Or break through the upper rail to chase more, down through the lower rail to chase short? Which is easier to make profit?
In yesterday's live broadcast, we put the historical market of ETH from May 2020 to November 2022 into different tests using 1X leverage. In the results of the trade using Bollinger Bands to do a chase up and down (the money curve is in gray), there was an extreme gain of 3.5X and a final gain of 1.7X.
The result of the strategy using Bollinger Bands to chase only long orders and not short orders: 8X the gain extreme and 6X the final gain. If the leverage is expanded to 3X, the gain extreme can reach 140X at the end of 21 years. By November this year, after a round of bear market baptism still have nearly 40X the return.
Conversely, using Bollinger Bands to go high short and low, the funds' curve will decline for a long time until it goes to zero, even if the leverage is only 1X.
This is to acknowledge the value of the oscillator strategy. Using only Bollinger Bands to judge highs and lows is also too simplistic. It also doesn't make sense to test this strategy with a period of big bulls and giant bears. This test shows that chasing the ups and downs is a useful strategy in the crypto industry. As long as the leverage and stop loss are reasonable, it is profitable in the long run and makes more profit instead of only doing the chasing action.
We certainly have to consider the personality factors of the underlying period, and simple repetition may still have a different effect. But the more valuable thing is to summarize future trading ideas. Because the bull and bear alternation will be repeated, there are just as many valuable investment targets. And it is also the low before the launch.
Under this kind of market and subject, even if you switch to the more straightforward 3 SMA long alignment to chase more, the result is okay.
So the difficulty is never in how to analyze but in how to implement.
For example: for the Bollinger Bands, is it better to go short after reaching the upper rail and long after reaching the lower rail? Or break through the upper rail to chase more, down through the lower rail to chase short? Which is easier to make profit?
In yesterday's live broadcast, we put the historical market of ETH from May 2020 to November 2022 into different tests using 1X leverage. In the results of the trade using Bollinger Bands to do a chase up and down (the money curve is in gray), there was an extreme gain of 3.5X and a final gain of 1.7X.
The result of the strategy using Bollinger Bands to chase only long orders and not short orders: 8X the gain extreme and 6X the final gain. If the leverage is expanded to 3X, the gain extreme can reach 140X at the end of 21 years. By November this year, after a round of bear market baptism still have nearly 40X the return.
Conversely, using Bollinger Bands to go high short and low, the funds' curve will decline for a long time until it goes to zero, even if the leverage is only 1X.
This is to acknowledge the value of the oscillator strategy. Using only Bollinger Bands to judge highs and lows is also too simplistic. It also doesn't make sense to test this strategy with a period of big bulls and giant bears. This test shows that chasing the ups and downs is a useful strategy in the crypto industry. As long as the leverage and stop loss are reasonable, it is profitable in the long run and makes more profit instead of only doing the chasing action.
We certainly have to consider the personality factors of the underlying period, and simple repetition may still have a different effect. But the more valuable thing is to summarize future trading ideas. Because the bull and bear alternation will be repeated, there are just as many valuable investment targets. And it is also the low before the launch.
Under this kind of market and subject, even if you switch to the more straightforward 3 SMA long alignment to chase more, the result is okay.
So the difficulty is never in how to analyze but in how to implement.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.