The answer to the ETHBTC cryptocurrency pop-quiz is ... simple.
you: "Why does geophf always say that?" 🙄
me: "Cuz it tru?" 🤔
1. download the chart-data to spreadsheetszorxen:
You see I've added 4 fields of meta-data:
- inverted close,
- average,
- 1 stddev +,
- 1 stddev -
to test strategies.
2. come up with strategies to back-test against the data. I came up with three:
- HODL: do nothing
- AVG: buy/sell when ratio above/below 1-year average
- STDDEV: buy/sell when ratio above 1 σ+ or below 1 σ- based on 1-year's worth of data
I provide 1 $BTC and 12 $ETH seed.
This is what MY BTC/ETH chart looks like with AVG and +1 / -1 STDDEV lines.
3. Now I run the strategies and plot the dollar value (caveat: based on TODAY's $BTC and $ETH prices) of the strategies to see how they compare to each other.
- HODL: baseline
- AVG: changes daily, best result
- STDDEV: invests rarely, better than HODL result.
AVG wins.
CAVEATS
- This is a model, it DOES NOT reflect dynamic real-world markets, specifically, frozen $BTC and $ETH prices are unrealistic.
- This is a BACK-TESTED model, it IN NO WAY predicts future prices, profits, or losses.
- This is LAST YEAR. YOU have to update for THIS YEAR
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