3 Things You Need To Trade Crypto Systematically

So if you're going to be a systematic trader, which you know, I think is great for this market because it eliminates all of that emotion, it allows you to sort of cut through and actually have a profitable edge. So I think we're down with that concept. Right. So you need, you need a data source, you need software to design test your systems and you need to be able to execute the systems. Let's talk about data first. I trade on daily and weekly bars. I, I don't trade very short term.

And you know, the reason for that largely is, is lifestyle. I don't want to spend a whole lot of time doing this. I spend about three minutes actually it took two and minutes this morning to do my, my crypto trading. I ran six systems on daily bars this morning and, and that's all it took and I'm done for the day.

So you need data and if you look at each exchange, the problem with the data is that they typically they'll only publish the data that they have for the tokens that they've had while they've had them. So it's hard to get a long time series to design your systems with. And this is the first problem. When I first started looking at crypto what I found was that.

You couldn't really design a system adequately because you couldn't get a long enough history to get enough bull and bear cycles in your back test in order to design a system with credibility. So my first step was to piece together data from a range of different sources to get along the time series so I could really look at how the systems were performing, forming. But now thankfully you, you can get daily, daily bars for a very broad range of instruments all the way back until inception from an independent data provider. So if you go, if you look up brave new coin, great source of data, they, they pull data from a large number of exchanges globally. They clean it and aggregate it and publish as a complete database. You can get the brave new COIN data from, from NASDAQ data and it's, it's on daily bars so it's not for intraday trading but really good data set which we didn't have just a little while ago. So that's the first step, good data. Second step is software. And what I've noticed in the crypto space, much like Forex, is that there's a proliferation of, you know, trading robots and bots, you know, and algos and platforms that will allow you to auto trade and so on. Which sounds great in theory but the big challenge with almost all of them is that they're pretty simplistic. They allow you to trade one ticker at a time with one system. And what they miss is the ability to trade a portfolio of instruments with the one system. So in stocks, you know, I don't trade Amazon, I trade the entire US market and I apply my systematic rules to it. And what's missing in a lot of the crypto ecosystem now, at least the popularized space, is the ability to trade a portfolio system. And so what I've done is develop systems using this data set and I developed using amibroker, which, you know, there's multiple different trading software you can use, but it's a portfolio based backtesting engine. And so my systems allow me to trade the portfolio of tokens with a particular system and then I have a portfolio of those systems to trade. So a portfolio of systems, each trading portfolio of tokens gives you much better diversification. So what's the thing that's missing and what a lot of crypto traders doing wrong is trying to create a bot or an algo or whatever for just one ticker. And you know, there's not really enough data for that. Like, yes, it's possible, but I'd propose that most will have far more success in the long run by having a portfolio based approach to their crypto trading.