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!
Bình luận
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The idea has been a spectacular failure and I'm clad I didn't invest any money in it lol
i believe that low on your chart on 12/24 was due to the ignis airdrop. once that was over, NXT price dropped significantly. Do you believe that NXT price will rise even without such airdrops?
Trader_Afro
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Hi Adam - firstly, thanks for sharing this - as someone with a non-Forex background (and relatively new to trading) this was eye opening. So for those of us with no Forex backgrounds can you just confirm I'm interpreting this correctly - it seems so simple, yet so elegant that I can't help feel I'm missing something. So if my understanding is correct, we'd be currently holding XLM and awaiting for a confirmation of a trend reversal (which may be happening soon looking at the chart), at which point we'd sell XLM and immediately buy into NXT which we would then hold for X weeks/months on the way down until we get confirmation of a price reversal and do the opposite and ride the wave back up with XLM. And then repeat? Thanks again for raising this - something I've not seen before on the crypto trading view and a whole new way of trading for me.
kcg111
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Adam, really like the look of this chart. Thanks for posting. I'm long XLM right now. I'll be following this chart closely and may just go for a ride with you! Beautiful, just beautiful!
Indiobear
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really? I just bought XLM
jxltogo
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Hi Adam, in general a good idea, but this chart would suggest to sell XLM for NXT now, which I don#t think would be a good idea looking at the upcoming event to be expected by XLM the coming month...
Trader_Afro
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@jxltogo, I think that's why you need to wait for a confirmation of a reversal - one red candle doesn't necessarily mean sell. E.g. the squeeze momentum in his chart absolutely doesn't suggest you should sell.
espenespen
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Thank you for your gem. Very interesting indeed! So is your plan to buy on the swing low and swing high of each, every week or so? Or are you planning on doing the trade on the larger degree, every month or two?
cthorpe2468
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I am curious as to how you determine your buy and sell targets for xlm/nxt for consistent gains?
AdamHyperbolic
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@cthorpe2468, Perhaps you need to do some more research on trend following and/or trade setups, if you cant determine entries and exits by glancing quickly at the chart above then you might not be experienced enough to take this trade.
PatrickvanDijk
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This sounds very interessting! I would very gladly like to know more.
How do you actually trade one and other for eachother? Buy XLM, wait for profit to come + wait for loss to come for NXT, sell XLM for BTC and buy NXT, and vice versa?
If this is it... how can one easily determin what the best time is?