Before we get into how one simple rule creates the insane kind of return on investment that’s anchored in the title, let’s get one thing straight.
You can’t copy that.
Actually, no one can do that. Not even a trading bot can replicate this particular strategy in real life because it is a thought experiment, a proof of concept, not a real way of making money in real life. The exchange fee alone nullifies this particular strategy for most traders.
But that doesn’t mean it’s useless – in fact, it’s the perfect way to illustrate how a simple strategy can work for real traders in real life.
So let’s find out. What can you do with this algorithm now and today?
What does 80 buy, sell 12 hours mean?
This is the basic requirement. In collaboration with the data company TIE, Cointelegraph Markets Pro developed the VORTECS ™ Score, an algorithm that determines whether the current trading conditions for a particular crypto asset are bullish or bearish.
The rating is based on historical data and essentially searches the entire history of a coin or token looking for conditions similar to what it is currently observing.
It looks for various similarities and outliers – for example, trading volume, recent price movements, social sentiment (a basis that is itself the result of years of development), and even the number of tweets about that trait.
If it finds similarities, it looks to see what happened next. Increase or decrease content? How consistent is this movement? How much is the increase or decrease?
The combination of all these data points creates the VORTECS ™ Score, a dynamic and constantly evolving assessment of the current trading conditions for each supported asset. The higher the score, the more optimistic the outlook – and the more reliable the algorithm. Conversely, a very low score is bearish (and equally confident). A neutral value of 50 means that the algorithm does not see any significant correlation between the current conditions and the past price development.
The Markets Pro team started testing a variety of strategies the day the algorithm was released.
The Buy 80, Sell 12 Hour Strategy is intended as a test of the “buy” of any asset that exceeds the 80 point, which is considered strongly bullish. And then it “sells” the property back after exactly 12 hours.
Of course, this does not happen on a stock exchange, but on a spreadsheet. And since the test aims to keep all assets in its range the same, it is rebalanced every hour.
For example, if SOL exceeds 80 and is the only asset with that high score, the test places 100% of its current portfolio in SOL. If the BNB then also exceeds 80, the test will assign half of its position to the BNB during the next hourly rebalancing.
Why can’t you do this
First, let’s say you are human when you read this. When you are human you need sleep. The test works 24 hours a day, every day and has been for more than ten months. Even new parents occasionally have time off from work.
Second, the algorithm does not take into account liquidity or order depth for a particular asset on a particular exchange. It “buys” at the current price and “sells” at the current price, which, as we all know, is not necessarily realistic.
And third, the hourly rebalancing exchange fee will be banned, no matter how much BNB or FTT you are hoarding.
Why is this a valuable test?
Here it is important to assess whether the VORTECS ™ algorithm is doing its job well.
When it sees bullish conditions, does it * correct * itself more often? Does the total price increase as the number of points increases? Obviously, the answer to this test is yes.
And while Buy 80, Sell 12 are the exceptions, there are other strategies that have generated great hypothetical ROIs.
Example: Buy 80, sell in 24 hours. That’s one of those 13.099% “gains”. Other effective strategies are:
Buy 90, sell 168 hours | + 4.544%
Buy 80, sell 80 | + 14.862%
In fact, Bitcoin is down 49.5% since testing started on January 5, 2021. every single strategy beat the ROI by just holding BTC.
And that signals that VORTECS ™ is working properly. All in all, over time – shows that historical trading conditions for a digital asset can be a useful measure of the asset’s current state.
In other words, a high VORTECS ™ Score has a proven correlation with the price increase. Not in all cases, not in all assets … but all in all, this ten month trial has produced compelling evidence.
Warren Buffett (perhaps paraphrasing Hegel) once said: “What we learn from history is that people do not learn from history”.
(As a crypto skeptic, he may want to reconsider his stance.)
This is what VORTECS ™ Score is all about. Learn from history. And that’s why the assumed return of 36.205% is important.
It tells us that we are looking at the correct history.
Cointelegraph Markets Pro is only available to monthly members for $ 99 per month or annually with two free months. It implements a 14-day money-back policy to ensure it is suitable for its subscribers’ crypto trading and investment research, and members can cancel at any time.
Cointelegraph is a financial information publisher, not an investment advisor. We do not offer personal or personalized investment advice. Cryptocurrencies are volatile investments and carry significant risks, including the risk of permanent loss and total loss. Past performance is no indication of future results. Figures and diagrams are correct at the time of preparation or in accordance with other regulations. Directly tested strategies are not recommendations. Consult your financial advisor before making any financial decisions.