Starting a trading system? Here is some basic backtested bitcoin statistics.

Fellow bitcoiners:

Today, I will be covering a post on basic statistics about bitcoin performance. Historical bitcoin price is a good starting point for building your own system. It’s kind of like knowing the historical return for the stock market (8%). The expectation is that your system need to outperform this number. So today, I will be covering a few statistics including percentage of green/red day, average daily gain for green/red. More advanced stuff, expectancy, profit/loss ratio and so forth.

Backtest specs:

Assume every trade is 100 BTC, buy at everyday’s open, sell at everyday’s close. This starts on 8/14/2011 -> 6/3/2014; I simulated late last night haha. Green day is defined by close greater than open. Red day is defined by close less than open.

Total days: 1023
Green days: 574 (56.61%)
Red days: 440 (43.39%)
Breakeven days: 9
Average gain per green day: 7.0685 usd/btc
Average loss per red day: -7.5835 usd/btc
Average percent gain for green day: 3.679% (not in the picture)
Average percent loss for red day: -3.455% (not in the picture)

Building your system:
Whether your trading system is trend following or mean reversal, you need the basic statistics to compare against. The underyling idea is that your system must be able to beat a buy-and-hold strategy. If you held on to bitcoin for the last 1000 days, your daily return is approximately 0.4% per day compounding. IE: 1.004^1000.

If you like what you see here on my blog, feel free to leave a feedback on what you want to see next or any questions.