MOVING AVERAGES TRADING METHOD APPLIED TO CRYPTOCURRENCIES

Economics, Commerce and Trade Management: An International Journal  (ECTIJ)

MOVING AVERAGES TRADING METHOD APPLIED TO CRYPTOCURRENCIES

Economics, Commerce and Trade Management: An International Journal (ECTIJ)

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Abstract

This research uses a popular investment technique called Moving Averages on crypto currencies. The 40 largest crypto currencies measured by market capitalization were evaluated. The research compares the returns of the crypto currencies using 5 of the commonly used parameter settings for the Moving Averages technique and compares these results to a buy-and-hold strategy. For some crypto currencies the Moving Averages technique outperformed the buy-and-hold technique. For others the buy-and-hold technique was the best.

Figures (11)

Fig. | Moving Averages Example Economics, Commerce and Trade Management: An International Journal (ECTIJ) Vol. 2, No.1, January 2019

Certainly there is more research being conducting on stock investment strategies than what is being published. Many institutions keep their investment strategies carefully guarded secrets. They certainly would not publish their strategies and methods for a greater audience to learn. Most methods currently be researched are older methods that were originally published years ago. Compared to other stock investing strategies much research has been done on the Moving Averages technique. There is still debate as to the effectiveness of this method. Early research consists of [6] which concluded that the method did not outperform just buying the underlining stock and holding it. Little was published about the method until [7] found that the method could beat the approach of just buying the underlining stock. Researchers and investors still debate the effectiveness of the method. Table 1. Dow Jones Average with 15 day and 50 day moving averages.

Table 2. Crytocurrencies Used in this Research

4.RESULTS Table 3. Variable Moving Average Parameters Values

Table 5. Crytocurrencies in which there is not enough data for the Moving Average Method. Table 4. Crytocurrencies in which there is not enough data for the Moving Average Method.

Tables 6 and 7 show the Crypto currencies for which the moving-average method generally outperformed the buy-and-hold method. In some cases, small moving-average parameter beat buy-and-hold, but not larger ones. Bit Shares beat its buy-and-hold return for 1-50, 1-150 and 5- 150, but did not for 1-200 and 2-200. In other case, like Lisk, all parameter values beat the buy- and-hold method.

Table 6. Cryptocurrencies in which Moving Average Method beats the buy-and-hold Method. Table 7. Cryptocurrencies in which Moving Average Method beats the buy-and-hold Method.

Table 8 and 9 shows the Cryptocurrencies in which the buy-and-hold method generally beat the moving-average method. In some cases, the difference between the methods was large. The buy- and-hold method for Ethereum produced an 18,845.5% return, but the best moving-average method only produced a 6,570.9% return. DASH’s buy-and-hold produced a return of 113,732.4% return compared to the best moving-average method of 5,355.6% return. Other Cryptocurrencies were closer. Dogecoin’s buy-and-hold method produced a 1,716.1% return while it is best moving-average return was 1,646.5% return.

Table 9. Cryptocurrencies in which the buy-and-hold Method beats the Moving Average Method. Table 8. Cryptocurrencies in which the buy-and-hold Method beats the Moving Average Method.

5.CONCLUSIONS Economics, Commerce and Trade Management: An International Journal (ECTIJ) Vol. 2, No.1, January 2019

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