Crypto is a financial revolution, but keen investors lack knowledge and experience, and often get involved without a strategy, leading to losses.
Crypto investing can be complex and confusing, especially for beginners
There is no easy way to get started with crypto investing
Digital assets are volatile, high-risk and difficult to trade profitably
Buy and hold doesn't work. Who can continue to hold through a +80% drawdown?
A strategy with a quantified edge can maximize the chances of success
Strategy
The investment objective is to extract profits from up and down trends. The strategy takes a medium-term approach to capturing trends in order to reduce the risk of being shaken out by short-term price fluctuations.
The strategy buys breakouts and shorts breakdowns. Positions are entered when trends have already been established which puts the probabilities of winning trades in our favour.
Trading is completely systematic, fully automated and driven by objective price data. All rebalances are done via API at scheduled times.
All entries and exits are rules-based and the strategy has a quantified, statistical edge in the markets. Therefore, the system leaves no room for emotional decisions such as fear and greed.
Risk is managed with position sizing, diversification and trailing stops to cut losses short and protect gains when trends reverse. Profit targets are also used to secure large gains.
Articles
Why Trend Following is the Optimal Risk Management Strategy for Extracting Superior Returns from Digital Assets
Risk Management and Preservation
Trend following aims to minimise risk and protect your investment. By actively monitoring and following the prevailing market trends, it strives to enter positions when the trends have already been established. This approach helps to reduce exposure to sudden price reversals and mitigates potential losses. Trend following employs systematic risk management techniques, such as trailing stop-losses, to limit downside risk.
Enhanced Profit Potential
Trend following allows you to capitalise on major price trends in cryptocurrencies. Unlike a buy and hold strategy, for example, which relies on the long-term appreciation of a specific asset, this approach focuses on identifying and participating in significant price movements, whether they are upward or downward. This flexibility enables the strategy to potentially capture opportunities in both bullish and bearish market conditions, maximising returns in various market environments.
Agility in a Dynamic Market
Cryptocurrency markets are known for their volatility and ever-changing nature. Trend following is designed to adapt to these market dynamics. By continuously monitoring and adjusting positions based on evolving trends, the aim is to stay ahead of market movements and capitalise on emerging opportunities. This agility allows the strategy to navigate volatile market conditions more effectively than a static buy and hold approach.
Diversification and Market Opportunities
A trend following strategy would typically diversify its portfolio across different cryptocurrencies. This diversification helps to spread risk and reduce the impact of individual asset volatility. Moreover, a trend following strategy that is systematically implemented based on predefined rules rather than discretionary decision-making eliminates human biases and emotions from the trading process, allowing objective and disciplined investment decisions to be made. A systematic approach ensures consistency in investment decisions and eliminates the potential for human errors or subjective judgments.
Trend following is a positively skewed strategy with a high proportion of relatively poor returns which are smaller in magnitude than the winning returns, due to cutting short the losses and letting the profits run on
It is important to note that investing in cryptocurrencies carries inherent risks, and past performance is not indicative of future results. A trend following approach aims to capitalise on market trends and minimise risk, but there can be no guarantee of profits or risk elimination. We encourage you to carefully consider your investment objectives, risk tolerance, and consult with a financial advisor before making any investment decisions.
If you are interested in learning more about trend following in the digital asset space, do not hesitate to get in touch for more information.
Q. What are the advantages of using your systems and why is it unfair?
A. Our approach to digital asset management is rooted in meticulously researched and fully systematic trend following strategies. What sets our systems apart can be broken down into several key points:
Our systems are designed with a quantified edge, which means that our strategies are backed by comprehensive research and data analysis. We use historical data and advanced algorithms to identify trends, giving our clients a well-researched and data-driven advantage in the market.
Our approach is entirely systematic, leaving no room for subjective decisions or human emotions. This ensures consistency in strategy execution and minimizes the risk of costly human errors.
We prioritize risk management and capital preservation. Our systems are designed to protect your investments by using trailing stops and employing dynamic risk management techniques.
We diversify to spread risk across different digital assets. This helps to mitigate the impact of adverse market movements in any one cryptocurrency on your portfolio.
Our trend following strategies allow us to capitalize on market trends, whether they are bullish or bearish. This adaptability means our clients can benefit in various market conditions.
In a market where competition is fierce, the unfair advantage comes from our rigorous research, systematic approach, and the ability to make data-driven decisions. This unfair advantage is not unethical but rather a commitment to providing our clients with the best strategies available in the digital asset management space.
