Wouldn't it be nice... (the LazyWhale algorithm)

[600watt]

nice work, ty

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[sumantso]

Will you posting your buy or sell signals here? I don't understand all those chart thingies, and its tempting to see Bitcoin at $1200, and then at $275, and wonder why couldn't I profit from it.

A thread which just tells me to buy or sell a few times a year is ideal for me.

[mmitech]

Great post, This is exactly what I was looking for, although I started doing this very late... the only difference for my method is I take profits and only try to keep the initial investment (BTC term), for example if I invested $3000 @ $10 and sold all when the price went to $200 and bought back only 300BTC @ $90, basically the result would be the same like holding the 300 BTC and on top of it profits from selling high and buying low.

mid-term trades are the best

[BldSwtTrs]

Very interesting, thanks for sharing
Looking forward to see when the signal will shift

[oda.krell]

Will you posting your buy or sell signals here? I don't understand all those chart thingies, and its tempting to see Bitcoin at $1200, and then at $275, and wonder why couldn't I profit from it.

A thread which just tells me to buy or sell a few times a year is ideal for me.

Yes. That was the plan of this "public experiment". I'll post about a new signal once it comes in (chance for that to happen in principle: every 6h. Right now, there's a good chance a 'buy' will be signaled within a week or two.)

Keep in mind though the critical remark by Ryn above: while the backtest might look promising, there is also only a small number of total signals (by design), which means future profitability of the parameters is less certain than in a method that has more data points.

That said, while I posted about other experimental methods before, this is one where I'm inclined to put some money on the signals myself, because of what seems to be a pretty good risk/reward ratio (I would probably set a stop loss in addition to the signals, however).

[btc6000]

...That said, while I posted about other experimental methods before, this is one where I'm inclined to put some money on the signals myself, because of what seems to be a pretty good risk/reward ratio (I would probably set a stop loss in addition to the signals, however).

Looks good, will have some of that.

How tight a stop? What has the maximum drawdown been over the test timeframe?

[Bitcopia]

Interesting experiment! I'm going to stick around for this.

[piramida]

mid-term trades are the best

Oh yes; although I use like 20% of my stash for that still gives enough profit to have a coffee.. or two.. or a car. But you do need lots of patience. Some kind of robot to tell you what to do may help discipline, so GJ oda, interesting what your robowhale has to say (although if I were it I'd be screaming buy buy since last week).

[inca]

Excellent thread. Well done. Like others, I shall follow it with interest as you post your first buy signal

[lebing]

Hodling is still better for whales because whales cannot avoid paying taxes. Short term capital gains tax is not nice in most countries and would drastically reduce the gains you project here.

[windpath]

Great thread, will definitely keep an eye on it

In fact, over the entire history of Bitcoin on-exchange trading, this method would have only given signals for 6 (!) trading pairs.

Right now, there's a good chance a 'buy' will be signaled within a week or two.

Can you elaborate?

[windjc]

Oda,

If your signal indicator is going to have a buy in a week or two, its pretty obvious that you (or the indicator) believes the bottom is in, that we will retrace off local highs, consolidate, and then start making a move up.

Its not rocket science to eyeball your chart.

Or are you leaving the possibility that the indicator will not offer a buy signal and we will go to new lower lows.

[Dalmar]

This algorithm's buy/sell signals look fairly similar to those on the daily ichimoku cloud.

[Wary]

Nice find, oda!

Is this something that can be scaled down to a shorter time frame, if only to have a larger testing sample for sustainability? I'm curious to see how this works out. Watching closely!

There are chances that it won't scale down. While charts are fractal, bitcoin long-term has some special features that IMO are not present at shorter time-frames: exponential growth, orders-of-magnitude runs, 8-month cycles. If the method relies on them, it won't scale.

[Morecoin Freeman]

I used to trade every other day. Couple months ago I switched to trading every once in a while. Works better for me.
Day trading is fun with a small stack but once your stack gets bigger it is hard to move your coins quick at one price.

My last trades by the way are:
Sell at 480$, Buy at 300$.

I'm all-in again since that huge sell wall on Stamp at $300,- I took a good chunk out of.

[Wary]

[bassclef]

Good post as usual oda.

Beginner traders should not be trading frequently. Taking a longer-term view and developing a strategy around it (i.e. this one) is far more effective than day trading, or worse yet, day trading on margin.

[oda.krell]

Oda,

If your signal indicator is going to have a buy in a week or two, its pretty obvious that you (or the indicator) believes the bottom is in, that we will retrace off local highs, consolidate, and then start making a move up.

Its not rocket science to eyeball your chart.

Or are you leaving the possibility that the indicator will not offer a buy signal and we will go to new lower lows.

I understand where you're coming from, but "the bottom is in" and "lazywhale signals buy soon" are two not necessarily related statements.

Like I said in the OP, unless we see a major, continuous drop in price, the method will most likely signal 'buy' in about the next week. I can say that because I can look at the internal variables, and see how far they are towards a buy signal. I can also approximate how far price would need to drop before there will be no buy signal in the short term - that's why I said what I said: barring a drastic price drop, it will signal buy soon.
(EDIT: to be more precise, price would need to fall to a level of 330/340, and stay there for a while, before a buy signal becomes unlikely)

So, 'bottom is in' and 'buy signal coming in' are not necessarily linked because:

a) there is a chance (even if small), that the bottom isn't in, the method will signal buy, and it will be a *profitable* signal nonetheless. That would happen if there is a second bottom after the buy signal, that price immediately recovers from before the method signals sell. Like I said in my OP, this method isn't built to catch the absolute bottom, it aims to capture large swings, so in that case, the signal would work just as intended.

b) the more likely scenario if the bottom *isn't* in: the method will yield an unprofitable signal.

I hope it won't do that, but that's why I can say 'method is close to a buy signal' without committing to anything about the market. I just describe ... okay, admittedly: tease a bit, about what the algorithm is about to signal Maybe that's what you dislike? I was trying to gather a bit of interest by doing that, but it's a bit sleazy perhaps to do so.

[oda.krell]

...That said, while I posted about other experimental methods before, this is one where I'm inclined to put some money on the signals myself, because of what seems to be a pretty good risk/reward ratio (I would probably set a stop loss in addition to the signals, however).

Looks good, will have some of that.

How tight a stop? What has the maximum drawdown been over the test timeframe?

From the top of the April 2013 bubble: about 50%. From the 2011 bubble: about 60% even. Not that great if dollar preservation is your highest ranked goal, but like I wrote above, there are 3 ranked goals I had in mind, and riding out a rally for the most part before selling is at the top of that list.

I would probably only set a stop for a buy signal that looks a bit dubious to me (like the one I expect now ). The buy signal come in a bit easier than the sell signals, so it makes sense perhaps to reign them in a bit. How tight depends, again, on your preference for USD preservation vs BTC accumulation, but I'd say at least 5%, up to 10% - tighter than that, and it probably won't work well with the comparably large moves this method seems to accept as "noise" between the tradeable swings.

[oda.krell]

mid-term trades are the best

Oh yes; although I use like 20% of my stash for that still gives enough profit to have a coffee.. or two.. or a car. But you do need lots of patience. Some kind of robot to tell you what to do may help discipline, so GJ oda, interesting what your robowhale has to say (although if I were it I'd be screaming buy buy since last week).

Hey, I said that much in my OP's Q&A part A good trader will almost certainly outperform this method. It's a (hopefully smart) combination of momentum signals, while a good trader will have seen the 275 drop as an excellent entry point for a mean reversion trading pair, which is probably a lot more profitable.

My algorithm can't do that. It looks at the big swings, and half-way through a  bear market basically says "fuck it, I had enough" That's what I was aiming for, and that's what the algorithm seems to signal quite well, so far. Not that many data points because little trades, so take it with a grain of salt.