LUCRE Product Development
LUCRE trading algorithm is in Alpha stage. Testing for a core functionality of the product had been done over the period of 365 days from April 1, 2017 to March 31, 2018.
Currently LUCRE Trading Algo only trades BTCUSD (Bitcoin) derivative (CFD). Other Cryptocurrencies will be added in due course. Performance of just HODLing was great only in good times when market kept going up but it turned sour after peaking on Dec 18th 2017. However the Algo trading performance was unmatched.
The chart below gives a comparison of hypothetical trading performance of $10,000 contributed on April 1st 2017 in both systems. One being an account holding BTC (in red) for the whole duration and the other contributed in LUCRE Algo trading (in blue). The Algo trading performance was trailing up until Jan 4th 2018 and then it overtook BTC HODL performance.
There is a distinction between ’high risk’ and ’unacceptable risk’ in the minds of many participants — cryptocurrencies have traditionally been seen as the latter. LUCRE aims to bring the risk to an acceptable level for allocation to retail participants.
The maximum drawdown of LUCRE Algo trading was 30% in the 1 year of trading test results. In comparison BTCUSD has been down 70% from the peak in December.
Backtest Conditions
Back-tests of Algo trading were carried out for 365-days over the period 1st April, 2017–31st March, 2018 on the MetaTrader’s Strategy Tester using high-quality tick data. The line graphs are used for clarity.
Trade related expenses are calculated as 1% over-market for every trade executed as spread and any swap (overnight interest) charged if the trade is kept open after 5:00PM EST.
The optimization feature of MetaTrader is used to test thousands of combinations of Algo settings to find the most profitable settings for maximum profitability.
Backtest results were then also analyzed using the StrategyQuant Analyzer. Some results are shown below.
Currently LUCRE Trading Algo only trades BTCUSD (Bitcoin) derivative (CFD). Other Cryptocurrencies will be added in due course. Performance of just HODLing was great only in good times when market kept going up but it turned sour after peaking on Dec 18th 2017. However the Algo trading performance was unmatched.
The chart above gives a comparison of hypothetical trading performance of $10,000 contributed on April 1st 2017 in both systems. One being an account holding BTC (in red) for the whole duration and the other contributed in LUCRE Algo trading (in blue). The Algo trading performance was trailing up until Jan 4th 2018 and then it overtook BTC HODL performance.
Conclusion
LUCRE is poised to set a new standard for cryptocurrency participation. It aims to alter the tendency to HODL the crypto assets which doesn’t always give high returns as we have seen since the peak in December 2017. Holding the LCR tokens gives access to the high performing trading Algo which takes aims to better perform than just HODLing it and hoping it will keep going up.
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