One of the simplest strategies for trading cryptocurrencies involves the application of moving averages . The basic premise is that if the price of an asset is above its moving average for a certain number of days, this is considered a buy signal. Once it falls below its moving average, the asset is sold, and a cash position is maintained until the price crosses the moving average again in the upper direction.
In general, it is not clear which type and length of moving average will yield the best results. As EMAs put higher weight on more recent market moves, they are more likely to provide a trading signal earlier, albeit at the cost of some signals being wrong.Some of the strategies described above appear to be successful. However, beating the market is more difficult than following simple timing strategies.
The chart below shows what returns could have been made by applying a given strategy for one year — i.e. the return displayed for Jan. 1, 2017, is the result of a strategy that started on Jan. 1, 2016.
Small governments passed and large governments came in.