Strategy update, 15th November 2019.

Napoleon Group™
Nov 15, 2019 · 3 min read

Dear Napoleonians,

Crypto markets have been quite frustrating over the last few months with few trends that could be used by our algos. So we wanted to take some time to discuss and share our analysis on recent performance and put them in perspective with a longer time frame analysis.

To start our analysis, we have drawn BTC and ETH price charts over the last 12 months. We can clearly see the end of the bear market in December 2018, the big rebound in prices starting April 2019 until July and a negative/sideway market since then.

BTC.USD, source Crypto Compare

Unlike BTC, a first rebound was first observed on ETH in December / January of almost 100% magnitude.

ETH.USD, source Crypto Compare
ETH.USD, source Crypto Compare
ETH.USD, source Crypto Compare
Strategy BTC Long Only

For this strategy that seeks to capture upward medium-term trends (weekly horizon), it basically did the job quite well by avoiding the end of the 2018 bear market and entering into the trend quite early on. It closed its position next to the top and avoided a large part of the following market just getting two false buy signal—quickly closed.

It is currently in position today following recent price action. So although this is not a very active model, it has proven to be quite surgical in its position monitoring over the last 12 months. For the record, it is our oldest model for which we have been pushing the trading signal on our NapoleonX platform, following its launch in April 2018.

Strategy ETH BTC USD Absolute Return

This strategy which combines both the previous one and a more reactive AR model on ETH has been quite good until July this year. Indeed, it managed to capture the initial ETH rebound and the other big rebound over the April-July. We had two negative periods, the first one between January and March when both markets went sideways and the current period where the markets have been going sideways to negative.

Clearly, these kinds of markets are adversely affecting our strategy as anytime there is an up or down movement, the models jump in position and then get stopped in its wrong positioning. As in other traditional markets, sideways markets are the most difficult ones to trade, and we have not yet found the martingale.

That is the reason why we are currently trying to improve our approach and developing a strategy over a shorter time horizon (4h). So far developments are promising on both BTC and ETH, and we will live test these signals on our prop trading account for a while. In the case of a positive conclusion, we would release this upgrade.

Hopefully, these sideways markets should come to an end as has always happened, which should boost our performance as it has a proven track record in these cases.

Let’s trade wisely in these uncertain times and wait for a clearer trend in the near future. It might just be around the corner.

Yours sincerely,

Stephane IFRAH, Napoleon CEO

Napoleon Group™

Written by

Fully algorithmic, scalable & decentralized crypto asset manager piloting trading bots, founded by former multibillion-dollar managers.

Fully algorithmic, scalable & decentralized crypto asset manager piloting trading bots, founded by former multibillion-dollar managers.

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