BLUF: I wrote an indicator to btfd and I’m explaining how best to use it.
Bitcoin has moments of high volatility that create powerful BTFD opportunities (Dalai lama pattern) but I never knew when to start buying or not, so i figured using basic statistics we could farm some alpha.
How it works: The mean
crypto caught a ‘return to the mean’ meme at some point so I looked into it and that’s the one of the legs for the algo, the other is variance.
essentially I calculate the standard deviation of the last 60 candles and when a candle excessively increases this variance and the price is far from the mean the BFTD signal is fired.
these two presets can be changed.
How to use it: It could go lower
When the cascade of red candles begin no one knows when it will end, this is the major drawback of this indicator, it’s can’t predict the bottom, all it can do is suggest that we’re probably oversold.
so I suggest 3 strategies for entering positions.
1: Spot buy some coins and hold
2: Low leverage snipe longs in 3–5 tranches as it goes lower. for example, you could 3x leverage long bitcoin 1/3th of your portfolio every 5% lower it goes. this could be best achieved with FTX’s bear tokens for zero risk of liquidation.
3: Call options on Deribit, this strategy is similar to the leverage one, buy 1/3th (or whatever) of your position as it goes down 5%(or whatever).
the script also comes with STFR signal but i’ve found it to be less effective as we’re in a growing asset class.
exiting the positions is up to you.
C-Trade is a next-generation Cryptocurrency derivatives trading platform established in 2019, offering 150x leverage and a wide range of Crypto instruments.
Script: It’s free if you sign up here!
Free Signals: Join both channels (i’ll be publishing the signals here)
Twitter: (after you signup for the script dm me here so i can add you)