Bitcoin Trading Strategy – review of returns

Bitcoin is not as bullish as it used to be. May it be due to fundamental reasons like transaction cost and slow speed, or maybe the herd found a new playground, whatever it might be, it is a good time to have a look how my bitcoin trading strategy performed.

The bitcoin trading strategy uses two moving averages for the trend detection, and, when the averages say bullish, the strategy will buy if the market moves above it`s old swing high.

The position is protected with an exit at the last swing low and a 3% trailing stop.

But have a look how this simple strategy performed over the last two years:

Trading on a daily timeframe and investing 10000€ with each entry, the strategy managed to get more than a 100% return over the last 2 years.

You might say this is just due to the curve-fitted moving averages (calculated over 54 and 21 bars), but if you have a look at other timeframes, using the same parameters, you will see that trendfollowing has been a very stable approach.

The chart shows the returns (green lines) of the strategy running on an 4h, 8h, 12h and daily timeframe. All timeframes basically give the same return, which is a nice sign of strategy stability.

Here comes a look at some nice entries: See how the strategy waits for a new high and then protects the position with a trailing stop (green dots)

The bubble might be over for now, but make sure to go long if bitcoin makes a new high!

see also: http://www.quanttrader.com/index.php/bitcoin-handelsstrategie/KahlerPhilipp2015

I am using the Tradesignal Software, the code for the Bitcoin Trading Strategy is available for institutional clients only. Supported software packages: TradesignalTradeStation Easy Language and MultiCharts