V5.1 Update + Binance Support V4/V5

jason ย ยทย  2019 Jan 28

Things to be discussed

  • V5.1 Release
  • New pricing feedback
  • Binance support for V4 and V5

V5.1 Release

Once V5 was released last week, I started sharing detailed backtests online. This was mainly developed on BTC/EUR datasets as I happen to have more recent data from it. However when backtesting against the BTC/USD dataset results were much worse. Sometimes up to 3x. Taking a closer look revealed that the short term indicators used in V5 where hit more often. Resulting in more trades and higher fees. As USD data is leading over EUR (simply just more volume), EUR data tends to be "softer".

To fix these inconsistencies I did some updates and has now been live under V5.1 since 24 January. Consistency is important because results will be more predictable across different timeframes and datasets. Even though we had to give up some performance. The way it is now is that during the recovery period after a bottom has been found, V5 performs well and beats the market. This is based on 2015 data. However between 2016 to 2017, if I don't push any new updates, it's better to switch to V4.

V5 2015-2018

You can check the new backtests here

After the alt Pump monitor strategy is launched, I will focus on improving 2016-2017 performance for V5. You can also increase the net performance by 2-3x by switching to Binance with lower trading fees. More on that later.

I hope you can see that I put great care on each strategy and its performance. We don't need many strategies as this would only shift my focus away. It may not be the sexiest strategies, by not focusing on profit first and not doing many trades, but once we can let that go, you can see value is also provided in other ways (de-risking, portfolio protection, less drawdown, and headaches).

The strategies are continuously under development, the performance numbers now will very likely be different by the end of year, as I continue to test more ways to limit our risks and increase performance (ie. the lower time-frame supporting strategy aiming to prevent crashes happening within one hour).

New pricing feedback

I've received some feedback since switching the pricing model last week. Thank you for your support. This is only the beginning. We meet in the worst time of the market, and I'm looking forward in what we can achieve together once the bull market returns. I want to clarify that it may feel wasted money to pay for something when it doesn't make profit every month to cover the costs. I get it. However, if you take a step back and look at what the strategy is designed for, in periods of crisis or bear markets -> protect your portfolio, and in periods of prosperity or bull markets -> secure profits and increase your portfolio size.

We are currently in a period of crisis, in a long and volatile bear market. So the goal of the strategy is not to lock in profits but wait on the sidelines to protect your portfolio until things turn around. If we are securing your portfolio reasonably well, we are already beating the market and stand with a stronger portfolio for the next bull market. We will simply have more to work with instead of breaking even first. By securing 50% of your portfolio, the bot already secured 100% of profits if we went down with the market.

Successful long term strategies are all focused on risk-management, this is the most important period and goal of the strategy. If you think it did its job with the November 2018 crash, there's even more reason to pay for the value it provided during these times of crisis. If you are drowning, you don't think about how to spend your next day, but you fight for your life. So you can live another day.

Anyway, what I'm trying to tell is that value is not only provided during bull markets. To be successful in bull markets we need to be successful in bear markets. Often times those are the times that are neglected by other automated strategies, but it's the period that makes the biggest impact long term. There's two sides to every coin.

And that's what you should be focusing on when evaluating my strategies and decide if it's worth to pay for. Is the strategy doing its job as to the current long term market conditions?

Binance support for V4 and V5

Binance support will be released soon as I'm now testing trades and preparing all data. This is significant because if you are holding BNB, the trade fees will only be 0.075% (otherwise 0.1%). A fourth of CoinBases' 0.3%. I did some backtests based on CoinBase and Binance fees over a 4 year timespan. It's the difference between 1200% or 400% net profit.

V5 CoinBase vs Binance

The benefit applies more for V5 as it trades more often. So you can increase performance easily by using Binance.

Don't stare blindly on the market performance btw, it's a nice benchmark but not worth it if the risk is too high. V4 beats the market easier because we do less trades.

V4 CoinBase vs Binance

So if you care about that, V4 is a good option. Still, V4 is not easy to handle and I recommend starting out with V5. In a later update you can run both on one account have it run for example 50/50 of your portfolio.

Keep in mind that our portfolio's while using our strategies, are on an exchange at all times. This is a security risk so you have to determine yourself how credible and trustworthy those exchanges are. Additionally, using Binance will mean we will sell into a stable coin, which will carry another level of risk. I personally don't trust USDT so just be careful. However it is the biggest and most well known stable coin. I will support USDT on launch and USDC shortly after.

That's it for now, once Binance support launches, I'll send another update.

Jason