Hey guys. Just made a pretty insane discovery for all those looking to do more trading over investing. Just as a disclaimer I don't personally trade much but I do incorporate aspects of trade timing in with my investing.
So, trading lives and dies on volatility, therefore to find the best (largest short term) trading opportunities we must find volatility. I have found through a bit of research, this website that compiles coin volatility over varying periods of time. A quick look shows XLM and NXT as having the highest rolling 180 and 365 day volatility measures.
Why do we need two? Well since all assets are traded via a base currency (Stocks: ***/USD, Fiat Currency: ***/USD, ***/AUD, Cryptos: ***/BTC, ***/ETH) by comparing two currencies denominated in BTC we essentially cancel out the effect of Bitcoins volatility and view the relative performance of two coins versus each other. In this case that becomes (XLM/BTC)/(NXT/BTC).
I have been performing arbitrage experiments on stocks for the best part of 2017 and I have never seen a potential trading opportunity as easy and as profitable as this potential trade we could exploit. The aim is to trade the relative performance of these two coins against each other for a relatively predictable split of 800-1000% every couple of months.
If you understood everything up to this point and believe you would like to trade this, I will post links in the comments below to the volatility charts and the price charts. Please feel free to ask questions below in case I missed something. Thanks!
So, trading lives and dies on volatility, therefore to find the best (largest short term) trading opportunities we must find volatility. I have found through a bit of research, this website that compiles coin volatility over varying periods of time. A quick look shows XLM and NXT as having the highest rolling 180 and 365 day volatility measures.
Why do we need two? Well since all assets are traded via a base currency (Stocks: ***/USD, Fiat Currency: ***/USD, ***/AUD, Cryptos: ***/BTC, ***/ETH) by comparing two currencies denominated in BTC we essentially cancel out the effect of Bitcoins volatility and view the relative performance of two coins versus each other. In this case that becomes (XLM/BTC)/(NXT/BTC).
I have been performing arbitrage experiments on stocks for the best part of 2017 and I have never seen a potential trading opportunity as easy and as profitable as this potential trade we could exploit. The aim is to trade the relative performance of these two coins against each other for a relatively predictable split of 800-1000% every couple of months.
If you understood everything up to this point and believe you would like to trade this, I will post links in the comments below to the volatility charts and the price charts. Please feel free to ask questions below in case I missed something. Thanks!
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The idea has been a spectacular failure and I'm clad I didn't invest any money in it lol