All analytical projects start with data. In our case it will
be crypto-currency prices. I need a source of daily price files that I can
access and download. Yahoo Finance is a convenient source. I have a program
that accesses this data and updates my files. I maintain data on about the top
two dozen coins.
The first issue faced is deciding on what period of time to
include. I have decided to start my analysis using the 6 quarters beginning in
2018. In some of these periods coin prices were increasing, some decreasing,
and others flat. By including each separately, we will get 6 results allowing
us to see if any conclusions stand the test of time and in varying market
conditions.
To measure market conditions for a period, we’ll use the
average closing price change. I don’t like simply taking the last price minus
the first price divided by the number of days. This only includes 2 days in the
calculations. Instead, I use linear regression to get the best fit for all the
days. The resulting slope will be used as the average daily change. It will
define the market condition for that period.
Next up, an attempt to answer the question. Should I only
trade bitcoins or should I consider other coins? You can follow me on Twitter,
@billlanke, to know when I post again. Or you can Email me at bill.lanke@gmail.com.
No comments:
Post a Comment