Key Features
1.5A-level trading signals
A-level high winning rate: 8.5-year historical backtest winning rate as high as 100%;
Grade A high profit-loss ratio: 8.5-year historical backtest profit-loss ratio as high as 500;
Grade A low risk: 8.5-year historical backtest maximum drawdown ratio as low as 11%;
A-level high-yield: 8.5-year historical backtest cumulative return rate is as high as 1349 times, and the annualized rate of return is 1.33 times;
A-level quick push: Push trading signals arrive within seconds.
2. High correlation
The correlation coefficient between the number of Bitcoin blocks and the price of Bitcoin is as high as 0.93.
3. High accuracy
Use the linear regression model in artificial intelligence machine learning to establish the prediction accuracy of the Bitcoin price logarithmic model Up to 83%.
Strategy logic
A fundamental factor of Bitcoin is super correlated with its price!
This factor is the number of Bitcoin blocks. Its correlation with the price of Bitcoin is as high as 0.93, which is simply too strong!
1. Find the key points
Previously, we have done research on the price of Bitcoin and its number of blocks. It was found that the change directions of the two were basically the same. This shows that the number of Bitcoin blocks actually affects its price. This discovery is very important!
4. Predict the price
The price prediction of Bitcoin should not be underestimated. Calculated based on the data on March 10, 2023 (if you want to see the latest data, please subscribe to the gold or platinum membership), the upper limit of the Bitcoin price is $132,453, which is the price ceiling of this bull market. The peak of the last bull market was on November 9, 2021, when the price reached $68,664. The cycle of bull and bear markets is 4 years, so the highest point of this bull market is expected to be in 2025, when the upper limit of Bitcoin price will exceed $130,000. The closing price of Bitcoin on March 10, 2023 is $20,220, which is expected to increase by 5.6 times.
5.建立策略
有了这个指标，我们就可以制定交易策略啦！当预警指标比特币价格偏差低于-0.9时买入，高于1时卖出。分批交易天数设为25天，总资金在25天内平均地买入，每天买一次，总仓位在25天内平均地卖出，每天卖一次，设置止损线为5%。
Strategic Assessment
On February 5, 2024, using data from the past 10 years, we can see that the logarithm of the Bitcoin price and the number of blocks has a correlation coefficient very close to 1, reaching 0.93. This means there is a very strong correlation between the two data.
The correlation coefficient is an indicator that, simply put, is used to measure how close the relationship between two data is. The closer the value is to 1, the stronger the relationship; the closer the value is to 0, the weaker the relationship.
Next, let’s evaluate the accuracy of this model. Here we use an indicator called the coefficient of determination, referred to as R-squared. This metric tells us how accurate the model’s predictions are. The highest value is 1, indicating that all predictions are accurate. Judging from the results, the R-squared during the training period from 2011 to 2015 was as high as 0.81, indicating that the prediction of this model is quite accurate.
Then, we used the data from the verification period to actually verify it. It was found that the R-squared during the validation period also reached 0.83, which is very close to the training period, indicating that this model still performs very well in actual use.
In the strategy tester performance summary we can see that the backtest performance of this strategy is excellent.
The winning rate is 100%;
The win-loss ratio is 500;
The net profit margin of the closed transaction is 474 times, which is far greater than the 181 times Bitcoin buy-and-hold return rate and the 1.84 times position profit and loss rate. Combined with the net profit margin of closed transactions of 474 times, the total return rate is 1349 times, and the annualized return rate is 1.33 times .
The maximum drawdown rate is 11%;
The basic attributes of this strategy are as follows, initial capital: 1000USD, order size: 1 contract, pyramid: 50 order, commission rate: 0.2%, slippage: 20 ticks.
Overall, this model performs very well and is worth a try!
This strategy is suitable for ordinary investors.
实盘业绩
2020年6月我完成上述比特币5A策略的开发和回测以后，2020年7月开始根据上述策略实盘投资比特币。
从2020年7月25日至2024年2月8日，我实盘投资比特币的累计收益率为1160%。比特币的累计收益率只有360%。
从2020年7月25日至2021年1月20日我的实盘累计收益率为76%。
From January 21, 2021 to June 30, 2021, my cumulative return on real trading is 89%.
从2021年7月1日至2021年11月17日我的实盘累计收益率为-17%。
From November 17, 2021 to December 19, 2022, I invested in Bitcoin put options, and the cumulative return was 71%, while Bitcoin’s cumulative return was -79%.
2022年12月19日，根据比特币5A策略，我对比特币的行情看多并买入。
I still hold a position. From December 19, 2022 to February 8, 2024, I invested in Bitcoin spot, with a cumulative return of 168%.
In terms of strategy settings, you can adjust them according to your own needs:
Language;
Display indicators;
Display strategy;
Display performance;
Display optimization results;
Sell alert;
Buy tip;
Number of days to open a position;
Verification model start year ;
Starting month;
Starting day;
The number of years for calculating the correlation coefficient.
In addition, according to the chart information, there is an opportunity on February 8, 2024. The Bitcoin price deviation indicator value is -0.45, which is greater than -0.9. You can seize this opportunity!
Finally, when using this strategy, you only need to change the code in the main chart, then select the BTCUSD and BITSTAMP exchanges, daily periods and logarithms to start trading. But remember, this strategy can only be used for Bitcoin investment!
Free trial
You can try the Bitcoin 5A strategy - Price Upper & Lower Limits for free first, and click "Add to My Favorites". Or click on the indicator on the main chart of TradingView, search for "Bitcoin 5A Strategy - Price Upper & Lower@Lilibtc", click on the star in front to collect it, and then you can click to use it.
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