Prediction is an index from -100% to +100%. It shows the strength and stability of the trend. 0% is no trend, positive values - uptrend, negative - downtrend. Values above 50% indicate strong trends or panic sales.

Let's look at the chart. It's history of bitcoin rates 2015-2019 with marked uptrend and downtrend predictions. You can estimate accuracy of predictions by yourself.

History of ethereum rates looks even more interesting.

How to Use Predictions?

You can apply signals to your own trading system, or use our signals for several simple trading systems.

Simple Trading System

Buy if prediction changes to positive. Sell if it changes to negative. Close all positions at zero. It's very simple and very profitable system. Let's compare results of Simple Trading with popular strategy Buy&Hold.

Buy&Hold slightly outperform at first, but it loses in 2018-2019. Simple Trading strategy successfully survives in the unpredictable market 2018, and it starts to take profits from the second half of 2018. Finally, profits of Simple Trading overperform Buy&Hold by 4 times.

Let's look at something more impressive. It's backtesting results of ETH/USD Simple Trading 2017-2019.

Simple Trading takes profit again and again, while holders loose almost all to the zero. It's even impossible to compare.

Lazy Trading System

Buy if prediction > +50%. Sell if it < -50%. Close all positions at zero or opposite prediction. It’s almost the same as simple trading, but with a starting threshold 50%.

Lazy Trading captures powerful trends only. Compare with the first charts. Here, we can see significantly less changes in direction of trend.

Therefore, Lazy Trading generates much less signals (up to 10 times less). It makes this trading system convenient for beginners and really lazy traders. This greatly reduces number of transactions and trade costs. But what about profits?

Profits have decreased, but it’s still considerably higher than passive investment. So we can recommend this system as comfortable and profitable.

You can experiment with threshold from 10% to 90% to find ratio of profits and signal frequency convenient for you.

Proportional Trading System

It's trading system for professionals. Use predictions as position size for long and short trading.

Examples:
Prediction = 30%. Use 30% of trading balance to buy coins.
Prediction = -50%. Use 50% of trading balance to short position.
Prediction = 0%. Close all positions.

Proportional Trading is inconvenient for manual trade, because it requires rebalancing positions every 4 hours. Profit is not as impressive as for simpler trading systems. But this system uses only part of your capital. So there is ability to trade multiple assets at once, multiplying their profits. Now look at the sharpe ratio. It is impressively high. Method has a good risk/return ratio. So Proportional Trading is suitable for margin trading.