How to Understand Current Market Conditions Using a Simple Trading Model

Pavel Kycek

October 23, 2024

Let’s take a straightforward look at the current crypto market using basic trading models. No fancy conditions, just a simple assessment of how two core approaches are performing.

Basic Portfolio Overview

We used a simple portfolio with two strategies:

Short-Term Momentum Long: Buy coins that have shown recent price gains, expecting the trend to continue.
Mean Reversion Long: Buy coins that have moved away from their mean price, expecting they will revert to the mean.

Top 20 Coins by Volume

Entire Crypto Futures Market

Basic Observations

Short-term momentum has had a hard time on small coins this year.
Mean reversion is doing quite well on both small and large coins.
Momentum is far more stable on bigger coins.

Note: No fees or slippage are included in these models. It doesn’t matter in this case at all.

We trade a wider universe, and as you all know, we can make more money on the wider universe as it provides more volatility (see this section of our last market update), but we need to be patient.

Disclaimer: All information provided by Robuxio.com is intended solely for the purpose of studying topics related to crypto trading and is in no way intended as a specific investment or trading recommendation. We are not a registered broker or investment advisor. I mention specific financial products, especially cryptocurrencies, always and only for the purpose of studying crypto trading. We are not responsible for the specific decisions of individual readers of this presentation. Trading and investing in financial instruments (and cryptocurrencies in particular) is high risk. The decision to trade cryptocurrencies is the responsibility of each individual and only they are fully responsible for their decisions. Never engage in trades that you do not fully understand the merits of. Remember, the crypto exchange has rules that you need to understand before risking your own money!

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