AI Crypto Trading vs Buy & Hold
Can machine learning models beat a buy and hold strategy while trading cryptocurrencies?
Machine learning models are powerful applications that can be used for nearly anything you want. Personally, I have used many different types of machine learning models to predict financial outcomes of stocks and crypto. What I have yet to do is compare these outcomes to a simple buy and hold strategy. In the following experiment or project, I will train a classification ML model on technical analysis indicators in order to see if it can successfully determine if a cryptocurrency will be a buy or sell the next day.
I am aware of the mixed reception technical indicators and analysis have in the trading community. But in order to capture more data from cryptocurrency price movements for a classification model, I had to use them. Perhaps a ML model will be able to see a pattern in the technical indicators that a human could not.
Why classification and not time-series?
Usually when trying to predict or forecast price movements, you would use a time-series model. However, I decided to use classification models instead. Besides being a different approach to forecasting price movements, it also serves as a good way to see if certain changes in…
