Exactly one year ago, on January 9, 2021, Cointelegraph launched its subscription-based data intelligence service, Markets Pro. Bitcoin (BTC) was trading at around $ 40,200 that day, and the current price of $ 41,800 marks a 4% increase year over year. An automated testing strategy based on Markets Pro’s key indicator, the VORTECS ™ score, generated a return on investment of 20,573% over the same period. Here’s what that means for retail traders like you and me.
How can I get my 20,000% per year?
The short answer is – you can’t. Nor any other human. But that doesn’t mean crypto investors can’t massively improve their altcoin trading game using the same principles that underpin this mind-boggling ROI.
The figure in the title comes from live testing of various trading strategies based on VORTECS ™ which started on the day of the platform’s launch. Here is how it works.
The VORTECS ™ Score is an AI-powered trading indicator whose job is to sift through the past performance of each digital asset and identify multidimensional combinations of trading metrics and social sentiment that are historically bullish or bearish. For example, consider a hypothetical situation where every time Solana (SOL) sees 150% more positive mentions combined with 20% to 30% trading volume from a fixed price, its price climbs massively over the two to four. next three days. .
When detecting a historically bullish arrangement like this in, say, realtime SOL data, the algorithm will give the asset a strong VORTECS ™ score. The conventional uptrend threshold is 80, and the more confident the model is that the outlook is favorable, the higher the score.
In order to get a feel for the model’s performance, from day one the Markets Pro team live tested a number of hypothetical trading strategies based on “buying” all assets that cross a certain VORTECS score. ™ and then “sell” them after a fixed period of time.
These trades were executed in a spreadsheet rather than a trade (so no fees to eat the winnings), 24/7, and involved complex algorithmic rebalancing to ensure that at all times all assets that achieve a benchmark score are owned equally. in the wallet. In short, following these strategies was something only a computer could do.
The winning strategy, “Buy 80, Sell 24 Hours” was to buy each asset that reached a score of 80 and sell it exactly 24 hours later. This algorithm gave a hypothetical 20.573% earnings over one year. Even among other humanly impossible strategies, this is an outlier: the second best, “Buy 80, sell 12 hours”, generated 13,137%, and the third, “Buy 80, sell 48 hours” , gave “only” 5,747%.
Down to earth
What these insane numbers show is that the returns generated by the high VORTECS ™ assets have compounded well over time. But what’s the use if real traders couldn’t duplicate the dialing strategy? A more practical way to examine the performance of the VORTECS ™ model is to use average returns after high scores. No fancy rebalancing, just a simple change in average price that all high-scoring tokens have demonstrated X hours after reaching the score of Y. Here are the numbers:
These look a lot more modest, don’t they? However, if you think about it, the picture these averages paint is no less powerful than the jaw-dropping hypothetical annual returns. The table shows robust positive price dynamics after high scores, averaged across all types of assets and across all market situations that have occurred throughout the year.
The trend is unmistakable: Tokens that achieve VORTECS ™ scores of 80, 85 and 90 tend to appreciate within 168 hours. Higher scores are associated with larger gains: the stronger confidence of the algorithm in the bullishness of the observed conditions is indeed accompanied by higher returns (although higher scores are also rarer). Another important factor is time: the longer the wait after a benchmark is reached, the higher the average ROI.
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In this sense, rather than trying to follow the complex “Buy 80, Sell 24 Hour” algorithmic strategy (which is, again, a futile exercise), real traders could maximize their fortunes by buying at higher scores. high and keeping longer. .
A separate stream of internal research from Markets Pro examined whether certain coins are more likely than others to display historically bullish trading conditions ahead of dramatic price increases. This turned out to be the case, with tokens like AXS, MATIC, AAVE and LUNA leading the pack in terms of the most reliable positive price dynamics after historically favorable setups. Overall, the majority of frequent high VORTECS ™ performers generated robust positive returns.
After a full year of operation, this disparate quantitative evidence – the mind-boggling returns on investment of live algorithmic testing strategies, the solid average earnings of high VORTECS ™ assets, and the consistent average returns of individual coins after high scores – present a case in point. the usefulness of the “story rhyme” approach to crypto trading.
Clearly, a favorable historical outlook, captured by a strong VORTECS ™ score, is never a guarantee of an impending rally. Yet an additional pair of algorithmic eyes capable of seeing through and comparing billions of historical data points to alert you to bullish patterns in digital assets. before they materialize can be an incredibly powerful addition to any trader’s toolbox.
Cointelegraph is a publisher of financial information, not an investment advisor. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk, including the risk of permanent and total loss. Past performance does not represent future results. Figures and graphics are correct at time of writing or as otherwise specified. Strategies tested live are not recommendations. Consult your financial advisor before making any financial decisions.