Before we dive into the details of how a simple base can generate the insane return on investment mentioned in the title, let’s be clear on one thing.
You can not copy this.
In fact, no man can. Even a trading bot can not reproduce this particular strategy in real life, because it is a thought experiment, a proof of concept, and not a real way to make money with cryptocurrency. Exchange fees alone will eliminate this particular strategy for most traders.
But that does not mean that it is useless – in fact, it is the perfect way to show how a simple strategy can work for real traders in real life.
So let’s dive deeper. What can you do today, today, with this algorithm?
What does “buy 80 and sell 12 hours” mean?
This is the basic premise. In collaboration with the data processing company TIE, Cointelegraph Markets Pro has developed the VORTECS ore Score, which is an algorithmic determination of the degree of current bullish or bearish trading conditions for a particular crypto asset.
The result is based on historical data, and it basically scrolls throughout the story of a coin or token in search of conditions similar to what you are currently seeing.
It looks for many similarities and outliers – such as trading volume, recent price changes, social sentiment and even the number of tweets about the asset.
If she finds a similarity, she looks at what happened next. Is the asset up or down? How consistent is this movement? How important is the top or bottom?
By combining all these data points, VORTECS ™ is created, a dynamic and constantly evolving assessment of current trading conditions for each supported asset. The higher the estimate, the higher the optimistic forecast and the higher the reliability of the algorithm. On the contrary, a very low estimate is bearish (and just as confident). A neutral score of 50 means that the algorithm does not see any significant correlation between current conditions and previous prices.
The Markets Pro team began testing a variety of strategies on the day the algorithm was launched.
The strategy of buying 80 and selling within 12 hours means that the tester “buys” all assets above 80 degrees, which is considered very optimistic. And then exactly 12 hours later you “sell” the asset again.
Of course, this does not happen on the stock exchange – it happens in a spreadsheet. Since the test wants to maintain equal proportions of all assets in its area, it balances every hour.
For example, if SOL is over 80 and it is the only asset that scores so high, the test will put 100% of SOL’s current portfolio. However, if the BNB also exceeds 80, the test will allocate half of the BNB position at the next timer balancing.
Why can not you do that
First, if you are reading this, let’s say you’re human. If you are a human being, you need to sleep. The test is performed 24 hours a day, every day, and is over ten months old. Even new parents sometimes get a break from the baby.
Second, the algorithm does not take into account liquidity or the depth of demand for a particular asset on a particular stock exchange. He “buys” at the current price and “sells” at the current price, which, as we all know, is not necessarily realistic.
Third, the hourly rebalancing fees will be high no matter how much BNB or FTT you have.
So why is it considered a valuable test at all?
The point here is to assess whether the VORTECS ™ algorithm gives good results.
When he sees bullish conditions, are they * correct * in most cases? When valuation rises, do prices usually rise? In this test, it is clear that the answer is yes.
And while buying 80, it is an anomaly to sell 12, but there are other strategies that have generated a huge hypothetical return.
For example, buy 80, sell 24 hours. This person is sitting on a “gain” of 13.099%. Other powerful strategies include:
Buy 90, sell 168 watches | + 4.544%
Buy 80, Sell 80 | + 14 862%
In fact, when Bitcoin has returned to 49.5% since testing began on January 5, 2021, each strategy beat the return by simply storing BTC.
This means that VORTECS ™ works properly. This – generally speaking over time – proves that the historical trading conditions of a digital asset can be a useful measure of the current state of that asset.
In other words, a high VORTECS core score has been shown to be associated with pricing. Not in all cases, not in all origins … But overall, this ten-month trial has proven its case convincingly.
Warren Buffett (perhaps paraphrasing Hegel) once said, “What we learn from history is that people do not learn from history.”
(As a crypto-skeptic, he may reconsider his position.)
This is the essence of the VORTECS. Assessment. History lessons. This is why the standard return of 36.205% is so important.
This tells us that we are looking for the right date.