Topic: Can cryptocurrencies be made into an INDEX? Diary of an experiment. (Read 106 times)

An experiment about trading: Diary


I have to confess: This forum has been one of my main sources of information about the world of cryptocurrency for some time now, and as time goes by i have felt a little selfish... I was giving nothing back. That, and my curiosity is what got me started in this idea and motivated me to experiment with it. I'm just an small time crypto trader. On the other hand, i have a decade of experience in conventional and CFD trading, and I want to prove (or disprove) if some of the trading strategies that would work in a standar market would work here.

Taking all that into account, i have come to the decission of starting a experiment treating cryptocurrency the same way I would treat Index Trading in a standar market, and experiment with the differents kinds of crypto groups i can create.

One of the main problems of crypto trade is the volatility of individual currencies, a problem that makes it difficult to predict. I expect that the creation of a general index would stabilize a more predictable market to make  more steady porfit and a more controled loss. There is not going to be a big ammount of BTC invested in this, because i am not quite sure if this is going to work, or how the increase on operational time would affect this kind of mevements. Do not try to extrapolate to bigger currency movements, please.


The plataform we are going to use is going to be bittrex, as i like this one when small crypto invesments are the objective... and the simple layout is going to be a great help to cut operation times.

What currencies are going to make our Index?

This time i am not going to use general market data but an Index formed by the twenty biggest currencies by volume of operations inside of the exchange.

Yesterday: After making that selecction, I started my trades (very small ones) from 18.30h to 19h at market value, the exact same ammount of BTC on evey one of them. This is important, as we want to act as if all of them formed a unified invesment and not twenty individual ones. After that i did nothing else until today, even if i saw some movements that could make a good benefit, i didn't act... this has to be done as a single invesment.


Today: The closing of the first day of operations has already been done and the data recorded. From 6.30h to 7h I completly colsed every operation (and opened the next batch), slightly under market value to increase the speed of all the operations and reduce the blind spot that the half an hour could create.

This are the currencies and results for the day:


                        
BTC-ADA 57.3%   
BTC-ETC 21.2%   
BTC-BCC -9.1%   
BTC-ETH -4.7%   
BTC-XLM 30.8%   
BTC-XRP 3.9%   
BTC-BTG -12.3%   
BTC-PIVX 12.7%   
BTC-MONA    -11.4%   
BTC-EMC2 -4.4%   
BTC-POWR -11.2%   
BTC-NEO -6.5%   
BTC-TRIG -25.1%   
BTC-STRAT 16.9%   
BTC-MEME    28.0%   
BTC-NXT -13.5%   
BTC-OMG 2.1%   
BTC-LTC -0.0%   
BTC-QTUM  -3.7%   
BTC-XEM 10.4%

                                

That number was not the exact ammount that the closed operations left me. It doesn't take into account the bittrex fee, nor does it takes into account the blind spot. It also doesn't count the sell under market value of the assets.


The new investments for the second day are exactly the same amount of BTC, the porfit of the first day will not  be involved in the operation. We need a homogeneous result on all operational days.


I hope that this information will be of use to anyone with interest in theorical  trading practices. If anyone has a suggestion tell me. From now one i will try to keep an update of every day of operations (not on weekends) with the complete amount of porfit/loss (if you want to i can post all movements, but i think the total will do) of the day and any idea or thought that i may have about everything.



Bye Bye, have fun.

EDIT. I will be posting the week results every weekend ^^