Let’s be honest, being in a bear market is really bad as a crypto trader. Most strategies that work when everything is green lead to losses. Increasing the value of the portfolio requires twice the work for half the amount of progress. Uncertainty about how long the market will remain depressed is stressful. Nowadays, the key to success is the use of all available tools that can improve the decision-making process of traders.
One such tool is the VORTECS Score, an algorithmic indicator available to Cointelegraph Markets Pro subscribers that is designed to use historical performance data for cryptocurrencies to determine whether the current ratio is bullish, bearish or neutral.
The account can be used creatively in an infinite number of ways, but one hypothetical strategy based on finding the strongest historical comparisons far outperformed both Bitcoin (BTC), which lost about 25% of its value during the first month of 2022, and the total currency market Alternative, whose losses can be compared. This strategy called “Buy 90 / Sell 70” made a profit of 15% between January 1 and 27.
What does buy 90 / sell 70 mean?
The most important thing about VORTECS raw score testing strategies is that they are not intended to be directly replicated by human traders. Instead, it serves as a tool for evaluating the overall performance of the model over a period of time.
The trades reporting on this strategy happen on the server, not on a real exchange. There can be several dozen of them per day, and the test portfolio is rebalanced according to the formula after each transaction. However, the results of these tests can give a convincing picture of the algorithm’s performance.
The indicator works as follows: the higher the base VORTECS score, the higher the confidence in the model that the observed conditions are bullish for the currency, based on historical precedent. Traditionally, a score of 80 is interpreted as a high confidence in a bullish outlook. Such evaluations are observed frequently, averaging about 50 cases per week.
90 points and above are less common; There are usually only a few cases each week. It indicates that the observed structure of trading conditions has previously proven to be reliable before the price spike. The Buy 90 / Sell 70 strategy means to buy all assets if the base score of VORTECS reaches 90 and sell when it drops below 70. If the test algorithm has another asset at the time the next 90 is reached, the portfolio is rebalanced so that all eligible assets are in equal proportions.
How did it happen in 2022
During January 2022, a total of 18 cryptocurrencies reached the major VORTECS 90 score. One of them was the Voyager token (VGX) shown below, which hit its low on January 25 at $1.76 (red circle on the chart). . Before the asset’s valuation fell below 70, the price rose to $1.87. It rose to $2.07 in the following hours, but the additional gain was not included in the 90/70 results.
VORTECS™ result (green/grey) vs VGX price, 20-27. January. Source: Cointelegraph Markets Pro.
Assets that achieve a basic VORTECS score of 90 tend to be more resilient than most other currencies to negative trends in the market as a whole. Due to their very healthy individual status, these coins generated an average profit of 5% within seven days of reaching the super high score in 2021.
Of course, strong VORTECS is never a guarantee of future price movement. For example, all strategies that rely on buying to achieve a score of 80 have generated negative returns in the first weeks of 2022. However, the success of the 90/70 strategy shows that historical precedent can be very beneficial even in the midst of a massive correction in the market. Cryptocurrency market.
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 losses. Past results are not indicative of future results. Figures and graphs are correct at the time of writing or otherwise indicated. The directly tested strategies are not recommendations. Consult your financial advisor before making financial decisions.