Topic: What is the Best Trading Strategy You Use for Cryptocurrency? - page 5. (Read 7567 times)

All technical indicators are NONSENSE. They work because people AND bots are using them. If the first book about technical analysis would have sad that when the sky turns red sell sell sell then that would be technical analysis. If enough people start using an indicator it will work. That's all.
Using that logic use the indicators that are most popular. Support and resistance come to mind right away and seems to work everywhere.
The usefulness of the other indicators depends on the market, but once again only because people are using them more in those markets.
The best strategy is to wait until the price drops. Wait some more until it stabilizes on a certain level. Then buy, but use only a part of your capital and add more as the price moves favorably.
At least this worked for me before.

My trading strategies are, follow the particular coin in twitter and other forum and media sites, check their latest development, check the background of the developers, check the opinions of the known reviewers, aearch trending coins at the moment ans tap a little bit on charts, this is not a giarantee but i made profits because of this as a short/trend trader,
You just gotta spend sometime in front of you pc

Have a look at japanese candlestics analysis and their basic patterns. thats something i can tell is somewhat useful. + learn about support and resistance (including channels, fibonacci retracement, also some longer term moving averages can serve as minor support/res)
 forget about fancy indicators they are mostly results of various formulas based on past prices.

i think its depend on what you trade, bitcoin pair fiat or bitcoin pair altcoin. if bitcoin pair fiat, then i think you can not use RSI, MACD, or else and maybe you can use forex signals because when i see on my friends setting, he uses forex signals and i think he can make predictions on when the price is up or down.

but for bitcoin pair altcoin, i think RSI, MACD is useful for you but you need to learn to make prediction because its need some skills to understand the charts.

Sure, here is the proof. I'm with you, I couldn't believe these figures either, what is your opinion on them?

bloomberg.com/news/articles/2016-11-21/how-renaissance-s-medallion-fund-became-finance-s-blackest-box



No no, but I didn't mentioned anything about ETF, I was talking only about hedge funds. Why are you trying to compare them? ETFs are used to gain exposure on certain markets, while hedge funds are a different beast, they are active players.


"...I don't believe that they outperform people analyzing fundamental data on any time scale longer than a few days... and the most successful inve..."

I agree with you, using quantitative methods to do long term predictions is... a little bit tricky.
But we are not forced to do long term prediction. This is why when using quant models, the prediction should be made on shorter time frames and taking advantage of smaller market movements. The biggest great side effect of this would be an increased Sharpe ratio(at the expense of higher trading cost).

And regarding inefficient markets: I stick to my view. The more the price is above/below the right price, the more trading opportunities.


The thing is that there is no correct answer, some can make money using fundamentals, others using systematic algos while others use both. So getting back to your initial claim "fundamental information about the asset is much more important/valuable than mathematical models" is wrong because it depends on who you ask: a systematic or a fundamental/value trader? As I showed you above, the mathematical models can generate huge profits.

Let us forget all the indicators we know about trading, the best trading tool is the fibonacci and elliot wave because they capture the thread when it begins and tell you when it ends.

You can also do well with candle stick patterns.

Sorry but I don't believe this for a second. Please show a link with proof. The very best ETFs over the past 20 years average barely over 20% return, and those are the ones in tech... they still didn't really outperform the tech industry by all that much. I would be more inclined to believe that some smaller hedge funds in the tens or hundreds of millions may have gotten a 45% or 80% return a few years, but certainly not average over a long period of time. The best average return I've heard of for hedge funds is around 30%. I would be curious to know what the average deviation from that number is though, because that can affect overall return greatly. If you lose 50% and then gain 50%, your average return is 0% but you're overall change is -25% over those two years.

As someone who has done a lot of work with very complicated mathematical/AI models for price forecasting, I don't believe that they outperform people analyzing fundamental data on any time scale longer than a few days... and the most successful investors make money over months or years, not days.

And no, we don't want inefficient markets. We want markets that are relatively efficient but not 100%... enough that there will be disparities between price and value, but we can rely on them disappearing quickly.

There might be some people who are talking nonsense and just hyping some coins with no actual reasons but this forum has members who have years of experience and trustworthy. You just need to be wise what to listen and not that is by examining their post and their supporting details as to why should and why not.

On the other hand, speculation is another thing but if you say it has some logical back ups then we can say it as prediction rather than speculation. Prediction has more solid ground than speculation.

Again, be wise what you will listen and not to.

Why never read posts here? There are a lot of trading experts here and is giving free signals to what crypto currency is going to pump and has the potential to generate profit. Just read those helpful and factual posts and ignore those posts that are just giving traders fear. Because there are times that most of their speculations are good.

Best strategy to use = never read bitcointalk posts , buy low seel high ,is it clear enough for you ?

I must admit I have no experience in forex trading and have only been learning to trade cryptos since last year. I started with a trading class and following some mentors, till I finally stepped into active trading. Untill now I'm really doing very well and I've never had a serious losing period. So I can only say which strategy for identifying a trade worked for me so far:

Look for coins that are already in a longer consolidation period after the last pump and get in at the first sign of a serious breakout. Otherwise you could also wait another weeks till something happens. Additionally some positive news about the coin are of course ideal. This strategy worked very well for me so far.

The indicators I use in combination are
- Fibs
- resistance/support levels
- Ichimoku cloud
- trendlines
- higher timeframe picture
- As it's hard to have an eye on all possible coins, collaborations with other people are crucial

I started a forex course for a couple of hours because I was thinking I need to learn the basics of trading generally, but also had the impression that you can't compare those markets so much.. Still I found it very interesting.

* Research
* Find valuable coins
* Buy Low
* Sell high
OR
* Research for Coins that are about to be pumped.
* Check the volume to confirm it will be pumped
* Buy and Sell high

No, it really depends. Outside crypto markets, for big quantitative hedge funds(Renaissance technologies for example), mathematical models are actually their thing, they don't rely too much on macro/fundamental data and let's not forget that in the last decade or so they managed to gain in average around 45% after fees every year using mathematical models. They also had 3 different years with over +80% rate of return! This is huge, given that other funds are really happy with a +25% YoY. I don't know exactly how much risk did the Ren Tec took to get this returns, but given that they are managing billions of dollars, I would say that they know how to do proper risk management.
So no, neither one is more important than the other.

The funny thing is that outside crypto market I'm also a fundamental trader beside a systematic trader.

In my opinion, the so called "fundamental" data in crypto market is still at the beginning. Almost everything is centered around hype news and other exaggerated information. That's why I'm approaching the crypto market more from a systematic point of view(I'm programming my algorithms to take into account only time series prices).

Regarding "With bitcoin, however, the market is extremely inefficient so both methods really aren't very reliable."
actually we the traders want inefficient markets, don't we?

All the best.

I mostly agree with this but in most types of trading (outside of crypto currency) fundamental information about the asset is much more important/valuable than mathematical models or technical analysis. With bitcoin, however, the market is extremely inefficient so both methods really aren't very reliable. The best way to trade bitcoin is to look at its fundamental value and decide whether or not you think it will rise or fall long term (like 10+ years out), and make decisions based on that. You can trade around your position using technical info, but your best bet is to hold long term if you are bullish.

Almost nobody is going to beat the crypto market over a long period of time by making frequent trades based on either technical or fundamental data.

Yes that's what I noticed. Some old and standard trading strategies are not working good in cryptocurrency trading they are still good in forex and stocks trading.

agree, volatility its xtreme in this market, many trading tools i was using in forex are not making sense anymore for this thing lol

as low sigma, i think experience and "gut",

so to speak: skills to smell the good cup of coffee

.

I used all my forex trading strategy that I have been using for about five years now in crypto currencies trading.I think there is much different between forex trading and crypto currencies except intelligence and volatility. I still use pin bar, fundamental analysis and bolligoband.

Forget about RSI, MACD, candlestick patterns, etc, these are nonsense. Professional traders use advanced mathematical models: stochastic or deterministic models. You can have a look at how derivatives(like options instruments) are priced under market neutral idea and you will get a feeling about them.

Trust me, I have about 9 years years of experience in trading and like you, I went through that nonsense like RSI and other known technical analysis indicators but they couldn't provide me a real edge.

What do you think is the best strategy in identifying the trade in cryptocurrency world. RSI is not that very effective. I also use MACD for normal trading studies. The morning and evening star is a good indicator too.