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Cryptocurrency Analysis with Python – Buy and Hold

romanorac.github.io

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Re: Cryptocurrency Analysis with Python – Buy and Hold

#31

Post by AznHisoka »

adjkant wrote: post #16
dperfect wrote: post #9

I ran some tests of my own with simulated automated trading strategies over the past few years of historical Bitcoin price data. I used a genetic algorithm to encode a range of time parameters for MACD, along with different trading triggers and amounts. After a day or two of running it against a huge number of permutations and generations optimized for highest overall return, I came to a similar conclusion: the fitte…

Depending on the automated strategy, they can dramatically reduce risk though. That has value well beyond the simple return of buy and hold, where if you don't time the sell perfectly, it's all useless. I think that's the big advantage automated trading strategies can have if designed well.

Reduce risk but also involve more time and energy.

Re: Cryptocurrency Analysis with Python – Buy and Hold

#32

Post by ascom »

sillysaurus3 wrote: post #29
thisisit wrote: post #20

Earlier quoted context omitted.

> Just avoid hodling the bag when the music stops... and how do you know exactly when the music has stopped?

I've told people to buy at $3,800, $5,900, and $14,000 and got shouted down each time. All of these were after major crashes, so of course the price was about to bounce back. Even if you know when the music hasn't stopped yet, it's very hard to get anyone to listen.

Oh boy... I told my dad to buy at $8, $27, $200, $2000, $3000, $6000, and $12000. None of these times has he actually taken any action. :(

If only I turned 18 a couple years earlier...

Re: Cryptocurrency Analysis with Python – Buy and Hold

#33

Post by AznHisoka »

sillysaurus3 wrote: post #29
thisisit wrote: post #20

Earlier quoted context omitted.

> Just avoid hodling the bag when the music stops... and how do you know exactly when the music has stopped?

I've told people to buy at $3,800, $5,900, and $14,000 and got shouted down each time. All of these were after major crashes, so of course the price was about to bounce back. Even if you know when the music hasn't stopped yet, it's very hard to get anyone to listen.

For what is worth, I also thought that ~5500 dip in mid november was a good time as well. I wish I had money in the exchange that weekend because it quickly recovered days afterward.

The recent dip was scarier though and time will tell whether we are still on the rise or just a temporary recovery.

Re: Cryptocurrency Analysis with Python – Buy and Hold

#34

Post by dperfect »

thisisit wrote: post #23
dperfect wrote: post #9

I ran some tests of my own with simulated automated trading strategies over the past few years of historical Bitcoin price data. I used a genetic algorithm to encode a range of time parameters for MACD, along with different trading triggers and amounts. After a day or two of running it against a huge number of permutations and generations optimized for highest overall return, I came to a similar conclusion: the fitte…

Not to be rude but I stopped reading at "MACD". TA is not the go-to strategy in stock trading for a reason. Indicators like MACD, RSI, Bollinger Bands etc re-paint a lot. So the perfect signals everyone sees on the charts are, for the most part, are just "profitable system" mirage.

Thanks. The conclusions may be obvious to experts in algo trading (and I heard similar things about the problems of TA for stock trading prior to doing this), but it was educational for me to go through the exercise because (1) it confirmed to me that the crypto markets behave similar to other markets, and (2) it helped me understand exactly where and how a technical indicator like MACD falls short for making trade decisions.

Before trying it myself, I was somewhat skeptical when reading about how these indicators don't work well. The overlays on charts always looked like good buy/sell indicators, so I didn't really understand why they couldn't make for a good algorithm. Only after trying it myself did I gain insight as to why they don't actually work so well.

I guess it's better to learn the hard way than to learn the hard-and-painful way with real money ;)

Re: Cryptocurrency Analysis with Python – Buy and Hold

#35

Post by dmak »

thisisit wrote: post #23
dperfect wrote: post #9

I ran some tests of my own with simulated automated trading strategies over the past few years of historical Bitcoin price data. I used a genetic algorithm to encode a range of time parameters for MACD, along with different trading triggers and amounts. After a day or two of running it against a huge number of permutations and generations optimized for highest overall return, I came to a similar conclusion: the fitte…

Not to be rude but I stopped reading at "MACD". TA is not the go-to strategy in stock trading for a reason. Indicators like MACD, RSI, Bollinger Bands etc re-paint a lot. So the perfect signals everyone sees on the charts are, for the most part, are just "profitable system" mirage.

What is an example of a "go-to strategy in stock trading"?

Re: Cryptocurrency Analysis with Python – Buy and Hold

#36

Post by tbrownaw »

viridian wrote: post #8

This may be a bit pedantic, but the phrase the author uses in his disclaimer "Experts agree that cryptocurrencies are a bubble." bothers me because it's kind of misleading. The actual fact at hand is ~96% of economists think that the crypto market has been subject to a massive speculation bubble as of November. While that's sort of close to Roman's disclaimer, there is some nuance that ought to be given, since a) 4%…

there is some nuance that ought to be given, since a) 4% of professionals dissent, and b)

That's roughly the same % of professionals that I've heard dissent about global warming, yet dissenting about that will get you labeled as stupid and/or corrupt. So what makes it worth calling out for nuance here?

Re: Cryptocurrency Analysis with Python – Buy and Hold

#37

Post by 24gttghh »

down wrote: post #24
minimaxir wrote: post #5

Unless you can include the complete irrationality of the users fueling the crypto bubble to get rich into the statistical model, any statistical analysis of those prices will be misleading. Traditional historical trend analyses of stock prices assume the market is somewhat rational. (but not 100% efficient, which is where money can be made)

if Gold can be irrational for 2k years, I don't see why not bitcoin can't, the only think gold has going for "longer history", yet HN folk love to say "past performance are not an...bla bla", yes it also has the 5% - 10% industrial use, but bitcoin has that too by being able to transfer it without third party, so will also not go to zero because will be useful as transfer of value.

Aren't 'miners' the third party?

Re: Cryptocurrency Analysis with Python – Buy and Hold

#38

Post by diogofranco »

pertsix wrote: post #22
thisisit wrote: post #20

Earlier quoted context omitted.

> Just avoid hodling the bag when the music stops... and how do you know exactly when the music has stopped?

a lot more people sell than buy cryptocurrency

How would that work? Any coin that is bought is also sold, so you're saying that the buys come from a few people buying big amounts? But all those sellers were buyers at some point...

Re: Cryptocurrency Analysis with Python – Buy and Hold

#39

Post by davewritescode »

down wrote: post #24
minimaxir wrote: post #5

Unless you can include the complete irrationality of the users fueling the crypto bubble to get rich into the statistical model, any statistical analysis of those prices will be misleading. Traditional historical trend analyses of stock prices assume the market is somewhat rational. (but not 100% efficient, which is where money can be made)

if Gold can be irrational for 2k years, I don't see why not bitcoin can't, the only think gold has going for "longer history", yet HN folk love to say "past performance are not an...bla bla", yes it also has the 5% - 10% industrial use, but bitcoin has that too by being able to transfer it without third party, so will also not go to zero because will be useful as transfer of value.

Gold has a price floor because it has some industrial utility and is useful for making jewelry.

All that has to happen to destroy bitcoin is a flaw in the implementation.

Seriously, look at OpenSSL and tell me the same issues aren’t possible in bitcoin.

When did we get so trusting of software that we decided it’d be a good idea to base currency on a distributed algorithm?

Re: Cryptocurrency Analysis with Python – Buy and Hold

#40

Post by lr4444lr »

jcoffland wrote: post #26
thisisit wrote: post #20

Earlier quoted context omitted.

> Just avoid hodling the bag when the music stops... and how do you know exactly when the music has stopped?

It's easy to tell when the music has stopped. The hard part is anticipating the stopping.

What do you think of the "buy low, sell high" strategy? ;-)
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