Volatility Breakout is a strategy that follows the short-term upward momentum, entering the market when there is an upward momentum but quickly locking in profits during the day. This strategy mirrors legendary trader Larry Williams' successful strategy in futures.
Volatility Breakout has resulted in outsized returns in highly volatile markets as volatility usually leads to a greater short-term momentum. While cryptocurrency is a very volatile asset, volatility also represents an attractive opportunity for our strategy.
· All values are the result of Binance backtest from 2019.12.31 ~ 2020.09.30.
Cryptocurrencies tend to have high risk in long-term investment due to their ambiguous intrinsic value and high volatility. However, you can manage the risk through technical investment based on quantitative analysis and automated algorithm trading. How you invest is more important than what you invest in.
Q.How did HEYBIT come up with its investment strategy?
We researched numerous trading techniques with the characteristics which are suitable for the crypto market from the papers and theories published in the past. Then, we applied them to market data to verify the core fundamentals and refined them in a way that avoids overfitting. Finally, we checked the safety(risk management) aspect of the strategy by actually reiterating the transactions to the level of sufficiency with our own internal account before providing it to the users.
Q.Can we trust the backtest results?
Values obtained from past data may not be accurately reproduced in the future. Because the market is constantly changing. Therefore, it is important to identify patterns rather than numbers and to continuously monitor the validity of the patterns. Our quant researchers and analysts are constantly monitoring the results of the trades and improving the algorithm.
Q.Does HEYBIT guarantee profit?
No, there is no guarantee that HEYBIT's systems, indicators, or signals will result in profits or that they will not result in a full loss or losses. All investors are advised to fully understand all risks associated with any kind of investing they choose to do.
Q.How long should I invest?
The results of our backtests and actual tradings (with HEYBIT's internal account) have shown bands of loss between 5~10% in HEYBIT's strategy. It took maximum six months to recover from the loss and turn into profit. In other words, the probability of loss decreases significantly when invested over six months. Therefore, we advise you to invest long-term, at least for the period longer than six months. But please keep in mind that past performance is not necessarily indicative of future results.