This is designed as a basic set of rules for trading Bitcoins . It is quite conservative for Bitcoin , but has been back tested to show that it's also historically highly profitable.
Chart Settings:
Set MA Cross at 9,21 on daily chart
Rules:
1) Always follow the rules
2) When MA crossover occurs trade in direction of crossover trend
3) When trading long have balance in Bitcoin
4) When trading short have balance in Fiat
5) When in doubt refer to rule 1
EDIT: Same strategy on Bitstamp starting on 2011-12-1 would give you a return of 1787%
https://www.tradingview.com/e/nFy07RhW/
Open Close Long/Short P/L %
1/12/2011 24/01/2012 Long 98%
24/01/2012 1/03/2012 Short 25%
1/03/2012 24/03/2012 Long -1%
24/03/2012 5/04/2012 Short -1%
5/04/2012 13/04/2012 Long 0%
13/04/2012 17/04/2012 Short -1%
17/04/2012 30/04/2012 Long 1%
30/04/2012 21/05/2012 Short 0%
21/05/2012 23/08/2012 Long 103%
23/08/2012 5/09/2012 Short -8%
5/09/2012 12/10/2012 Long 17%
12/10/2012 12/11/2012 Short 11%
12/11/2012 23/12/2012 Long 22%
23/12/2012 9/01/2013 Short 15%
9/01/2013 17/04/2013 Long 667%
17/04/2013 26/04/2013 Short -36%
26/04/2013 6/05/2013 Long 15%
6/05/2013 21/05/2013 Short 0%
21/05/2013 6/06/2013 Long 4%
6/06/2013 16/07/2013 Short 26%
16/07/2013 27/09/2013 Long 40%
27/09/2013 11/10/2013 Short -1%
11/10/2013 11/12/2013 Long 672%
11/12/2013 1/01/2014 Short 26%
1/01/2014 21/01/2014 Long 13%
21/01/2014 6/03/2014 Short 21%
6/03/2014 20/03/2014 Long -9%
20/03/2014 19/04/2014 Short 22%
19/04/2014 30/04/2014 Long 5%
30/04/2014 16/05/2014 Short 1%
16/05/2014 OPEN TRADE Long 39%
TOTAL TO DATE 1787%
Chart Settings:
Set MA Cross at 9,21 on daily chart
Rules:
1) Always follow the rules
2) When MA crossover occurs trade in direction of crossover trend
3) When trading long have balance in Bitcoin
4) When trading short have balance in Fiat
5) When in doubt refer to rule 1
EDIT: Same strategy on Bitstamp starting on 2011-12-1 would give you a return of 1787%
https://www.tradingview.com/e/nFy07RhW/
Open Close Long/Short P/L %
1/12/2011 24/01/2012 Long 98%
24/01/2012 1/03/2012 Short 25%
1/03/2012 24/03/2012 Long -1%
24/03/2012 5/04/2012 Short -1%
5/04/2012 13/04/2012 Long 0%
13/04/2012 17/04/2012 Short -1%
17/04/2012 30/04/2012 Long 1%
30/04/2012 21/05/2012 Short 0%
21/05/2012 23/08/2012 Long 103%
23/08/2012 5/09/2012 Short -8%
5/09/2012 12/10/2012 Long 17%
12/10/2012 12/11/2012 Short 11%
12/11/2012 23/12/2012 Long 22%
23/12/2012 9/01/2013 Short 15%
9/01/2013 17/04/2013 Long 667%
17/04/2013 26/04/2013 Short -36%
26/04/2013 6/05/2013 Long 15%
6/05/2013 21/05/2013 Short 0%
21/05/2013 6/06/2013 Long 4%
6/06/2013 16/07/2013 Short 26%
16/07/2013 27/09/2013 Long 40%
27/09/2013 11/10/2013 Short -1%
11/10/2013 11/12/2013 Long 672%
11/12/2013 1/01/2014 Short 26%
1/01/2014 21/01/2014 Long 13%
21/01/2014 6/03/2014 Short 21%
6/03/2014 20/03/2014 Long -9%
20/03/2014 19/04/2014 Short 22%
19/04/2014 30/04/2014 Long 5%
30/04/2014 16/05/2014 Short 1%
16/05/2014 OPEN TRADE Long 39%
TOTAL TO DATE 1787%
My only question is whether it can be optimised during stupid-bubble periods. Take the last bubble for example, because the initial crash was fairly quick, the EMAs correctly indicated to go short after significant value was lost. This would have proved to be profitable because there was a short recovery phase before a further crash. What if the initial crash had continued without a recovery phase? The trade might still have been profitable but there would have been a lot of "lost" opportunity, simply because of the speed of the dump.
My question is, could we add a third EMA or another indicator to apply during stupid-bubble phases to try to maximise return? This might necessarily add more risk of course.
Here is a nice script created by ninjabenja and LazyBear that you might like to try. You will just need to update the Fast and slow to 9 and 21 http://pastebin.com/unskFMn2
Can I ask, how did you choose 9 and 21 as the optimal ones?