An introduction to a work data file

Moving on to the 1^st alternate scenario has proven a bit more complex than I anticipated. I elected to structure the code so that future scenarios can be tested more quickly. Meanwhile I used the buy and hold scenario to test the code. Instead of running 2 sets of 3 coins each, I ran all 5 together. Following is a summary chart.

Period	Ending Balance	Starting Balance	Gain/Loss	Num Trades	Fees	Period Slope	Period Trend
2018-Q1	$4,178.84	$10,000.00	-$5,821.16	10	$21.28	-44.20	0.68
2018-Q2	$8,803.21	$10,000.00	-$1,196.79	10	$28.22	-14.13	-0.74
2018-Q3	$8,067.18	$10,000.00	-$1,932.82	10	$27.12	-4.71	-0.10
2018-Q4	$5,273.96	$10,000.00	-$4,726.04	10	$22.92	-27.35	-0.05
2019-Q1	$11,597.15	$10,000.00	$1,597.15	10	$32.42	2.48	0.12
2019-Q2	$20,509.78	$10,000.00	$10,509.78	10	$45.81	43.90	0.33

A few observations are appropriate. First the total net is different from adding the 2 nets in the previous post because BTC was included in both 3 coin runs and therefore influenced the results twice. I also added trading fees to the simulations. They had minor impact on buy and hold but may be significant in scenarios with more active trading. I’ve also added “Period Trend” to the chart. It has no meaning here but might be useful in the future.

A by-product of the revised code is a work spreadsheet that includes details of trades and balances. You can access this file at http://bit.ly/2GDNlPv.  It can be downloaded by clicking on the 3 dots in the upper right-hand corner. This work spreadsheet will be used to analyze the results for future scenarios. If you access it and have questions you can add it as a comment or Email me at bill.lanke@gmail.com.

I still intend to look at a 1^st alternate trading strategy that involves making trades daily. I’ll tweet on Twitter @billlanke when I post.

Scenario 1 - Buy and Hold

I started my trading strategies with the simplest of all, buy and hold (Scenario 1). I started with $10,000 divided between 3 coins, BTC, ETH, and LTC. I purchased the maximum of each coin on the first day of each of the last 6 quarters. Then all were sold on the last day of the quarter. The following table summarizes the results.

Scenerio	2018-Q1	2018-Q2	2018-Q3	2018-Q4	2019-Q1	2019-Q2
Direction	Down	Down	Flat	Down	Flat	Up
Index Slope	-44.20	-14.13	-4.71	-27.35	2.48	43.90
1-BuyAndHold	-$4,813	-$1,552	-$2,712	-$4,419	$3,168	$12,174	BTC ETH LTC
1a-BuyAndHold	-$6,480	-$890	-$480	-$4,850	-$248	$10,759	BTC BCH XRP

Direction is an arbitrary description I assigned to each quarter based on the Index Slope. Originally, I used 3 coins, BTC, ETH, and LTC. Then I decided to run the program again with BTC, BCH, and XRP (Scenario 1a).  There was a big difference in the results. I looked at the individual coins for quarter 1 of 2019.

2019-Q1	BTC	ETH	LTC	BCH	XRP
Original coins	0.8591	23.3656	103.7775	20.1996	8,987.1484
Original price	$3,880.15	$142.66	$32.12	$165.02	$0.37
Final price	$4,112.69	$142.40	$60.78	$169.54	$0.31
Original Value	$3,333	$3,333	$3,333	$3,333	$3,333
Final value	$3,533	$3,327	$6,308	$3,425	$2,794
Net gain/lost	$200	-$6	$2,974	$91	-$539

Clearly LTC was a significant factor in the overall results. It basically doubled during the period. The message here is this buy and hold approach is great if you pick the right coin. But it’s also boring if you want to be a trader. It also may be the best strategy and will be used as a baseline to compare other strategies to.

Next I’ll look at a 1^st alternate trading strategy that involves making trades daily. I’ll post on Twitter @billlanke when I post.