How did a crypto algorithm turned $100 into $36,205 in 10 months?
“What we learn from history is that people don’t learn from history,” Warren Buffett stated. Crypto traders have the power to change that.
Let’s be clear about one thing before we go into the nitty-gritty of how one basic rule resulted in the type of ridiculous return on investment mentioned in the title.
This isn’t something you can imitate.
In fact, no human being is capable of doing so. Even a trading bot wouldn’t be able to reproduce this technique in real life since it’s more of a thought experiment, a proof-of-concept, than a viable way to profit from crypto trading. For most traders, the exchange costs alone would be enough to put this technique to the test.
But it doesn’t imply it’s pointless; in fact, it’s an excellent example of how a simple technique can work for actual traders in the real world.
So, let’s get started. What could you accomplish with this algorithm right now, today?
What does “Buy 80, Sell 12 hours” mean?
Here’s the gist of it. Cointelegraph Markets Pro has created the VORTECSTM Score, an algorithmic estimate of how bullish or bearish current trading conditions are for a certain crypto asset, in collaboration with data business The TIE.
The score is based on historical data, and it basically sifts through a coin’s or token’s whole history seeking for situations that are comparable to what it is seeing right now.
It looks for a number of commonalities and outliers, such as trade volume, recent price action, social mood, and even the number of tweets regarding that asset.
If there are any similarities, it investigates what occurred next. Has the value of the asset increased or decreased? What was the consistency of that movement? What was the significance of the rise or fall?
It develops the VORTECSTM Score by combining all of these data points, which is a dynamic and continually updating appraisal of the current trading circumstances for each supported asset. The higher the score, the more optimistic the forecast is – and the more certain the algorithm is. A extremely low score, on the other hand, is bearish (and equally confident). The program detects no substantial association between present conditions and prior price performance with a neutral score of 50.
On the day the algorithm became online, the Markets Pro team began testing a variety of methods.
The test “buys” every asset that crosses the 80 score, which is regarded very bullish. After precisely 12 hours, it “sells” the asset again.
Of course, this isn’t taking place on a stock exchange; it’s taking place on a spreadsheet. The test rebalances every hour because it seeks to maintain equal ownership of all assets within its range.
For example, if Solana’s SOL currency scored 80 and was the only asset with that score, the test would invest 100% of the present portfolio in SOL. However, if Binance Coin (BNB) crosses 80 at the same time, the test will assign half of its position to BNB in the following hourly rebalancing.
Why couldn’t you do it?
Let’s start by assuming you’re reading this as a human. You need sleep if you’re a person. For almost ten months, the test has been running 24 hours a day, every day. Even new parents need a vacation from their child now and again.
Second, the algorithm ignores the liquidity and order depth of any given asset on any given exchange. It “buys” at the current price and “sells” at the same price, which we all know isn’t always the case.
Third, no matter how much BNB or FTX Token (FTT) you had, the exchange costs for a rebalancing every hour would be exorbitant.
So, why is a crypto algorithm test useful in the first place?
The goal here is to see if the VORTECSTM algorithm is up to the task.
Is it more often than not correct when it senses bullish conditions? Is it true that as a score rises, prices rise as well? Obviously, the answer to this exam is yes.
While the Buy 80, Sell 12 strategy is an exception, other techniques have generated large potential returns on investment.
For example, if you buy 80 and sell it in 24 hours, you’ll make a profit. That one has a profit margin of 13,099 percent. Other effective tactics are:
Buy 90, Sell 168 hours | +4,544%
Buy 80, Sell 80 hours | +14,862%
In fact, since the experiments began on Jan. 5, 2021, Bitcoin (BTC) has returned 49.5 percent, and every approach has outperformed merely keeping BTC.
This indicates that VORTECSTM is functioning properly. It is proven that, in general, previous trading conditions for digital assets may be a helpful barometer for the asset’s present health over time.
In other words, a high VORTECSTM Score has been linked to price increases. Not in all cases, and not for every asset… However, this 10-month trial has presented a convincing argument in general.
“What we learn from history is that people don’t learn from history,” Warren Buffett famously observed (possibly citing Georg Wilhelm Friedrich Hegel).
(As a crypto skeptic, he should reconsider his position.)
The VORTECSTM Score is all about that. History can teach us a lot. That’s why a 36,205 percent potential return is significant.
It confirms that we’re looking at the correct timeline.
CryptoNewsPipe is a financial information publication, not a financial advisor. We do not offer specialized or customised investment advice. Cryptocurrencies are volatile investments that come with a lot of risk, including the possibility of entire and irreversible loss. Past performance does not guarantee future outcomes. Figures and charts are accurate as of the date of publication or as otherwise stated. Strategies that have been put to the test in real life are not recommendations. Before making any financial decisions, consult with your financial advisor.
All ROIs are current as of 4:00 p.m. UTC on October 23, 2021.