This 1 Method Increased Crypto Trend-Following Win Rate to 60% - Research Article #74
A method to increase binary trend-following closed trades win rate.
👋 Hey there, Pedma here! Welcome to the 🔒 exclusive subscriber edition 🔒 of Trading Research Hub’s Newsletter. Each week, I release a new research article with a trading strategy, its code, and much more.
If you’re not a subscriber, here’s what you missed this past month so far:
If you’re not yet a part of our community, subscribe to stay updated with these more of these posts, and to access all our content.
When I am researching new ideas, I don’t like to just work on theoretical concepts. Lately I’ve been spending a lot of time digging through quasi-systematic or even discretionary trader’s work, that they themselves haven’t properly tested, or that I can’t find any legitimate research on.
Despite many of these ideas having no scientific basis, there’s something to be said about the person in the arena, observing in real time different market behavior, rather than someone purely looking at data.
Today we have an example of this. I’ve discovered a way to that might make systematic crypto trend-following more consistent and increase closed trade win rate to as high as 55%-60%. This is a major increase considering that traditional binary trend-following models stay within the 25%-40% win rate range.
Below is the equity curve of today’s model.
I want to add the caveat that more sophisticated trend followers don’t care as much for win rate, as their exposures are what matters. But for traders using more simplistic approaches, they still care about the performance of a closed position, and that’s why I am doing this article.
The idea we will be discussing today is what happens when you sell portions of a position over the next few days, and then move the stop loss to breakeven.