The machine learning model for Bitcoin Short Selling has now been upgraded to the 3.0 series. This upgrade brings several important changes, including intelligent stop losses, Trade Meter integration, and a change in Trade Alert status. This post will discuss the updates.
Short selling Bitcoin gives traders an opportunity to make higher-probability trades during bear markets.
We recommend “swimming with the current,” which means to take long trades when the Market Index is positive and taking short trades when negative. Since the Market Index has been positive, we have focused our efforts more on the long trading side. However, given the indications of an extended market slowdown, we are preparing by bringing our Short Signals up to the latest technology.
Short Selling With 3.0 Model
In July of 2019, Crypto-ML rolled out version 3.0 of the machine learning models for our long trading signals. To recap, the models can be summarized as:
- Crypto-ML 1.0 models brought intelligent oscillating technology that consumes large amounts of data to dynamically update based on market condition.
- Crypto-ML 2.0 added a separate mechanism to determine profit capture level. Rather than waiting to close profitable positions, it independently and dynamically seeks when to exit profitable positions.
- Crypto-ML 3.0 adds an independent, dynamic stop loss mechanism to exit positions before they move too far against the traders.
As of today, our BTC Short model has now upgraded from version 2.0 to 3.0. Fundamentally, this means losses will be minimized more than in the past.
Losing trades are a reality of any system. The effectiveness of that system comes more from the management of capturing gains and limiting losses.
Intelligent Stop Losses
As of this writing, the stop loss is set at -1.35%, which is very tight. This typically indicates the signal is cautious, which we’d expect of a short signal during a bull market.
Interestingly, both the “BTC Long” and “BTC Short” stop losses are extremely tight. The conclusion we draw is that we are in an uncertain, pivotal point in the markets.
Addition to Trade Meter
- The higher the value, the stronger an open trade is.
- The lower the value, the less likely a trade is to open.
The BTC Short signal should generally move opposite of the BTC Long signal. However, these values come from completely independent models and may conflict.
Trade Alert Status Change
As a final note, we normally only deploy changes when the Trade Alert status matches before and after. However, given the slowness of the previous version, the importance of this change, and the fact that we are not in a bear market according to the Market Index, we have decided to roll out the 3.0 model even though this will cause a change in the BTC Short Signal status.
Accordingly, the BTC Short will be switched from a “CLOSE” to a “SHORT” position. To maintain our ethics and transparency, this trade will not be reflected in our Trade History because it was not issued publicly end-to-end.
Please let us know if you have any questions about this change.
Do you want to learn more about short selling Bitcoin and the new changes?