CML-A Trading Strategy
This post will introduce you to Crypto-ML’s CML-A trading strategy, which issues trades by finding anomalies in our neural network price predictions. This ideally allows us to identify and trade with unexpected events, market manipulation, and other exceptional scenarios.
Crypto-ML Trade Strategies
With Auto Trade, you can select from multiple trading strategies. Here, we’ll focus on CML-A but you can also learn more about Crypto-ML Trading Strategies.
|Hold||Keeps a designated percentage of your portfolio held in cryptocurrency.|
|CML-A||Anomaly Detection: Measures the predictions from our neural networks to find anomalies in the market that indicate market manipulation that should be followed.|
|CML-I||Investment: This strategy utilizes the CML-A machine learning foundation, but targets longer-term positions rather than swing trades.|
|CML-T||Technical: Applies deep learning to technical analysis data in order to generate a high-probability rules-based system. Learn more.|
|CML-X||Experimental: Leading-edge strategies still in the research-and-development phase. Learn more.|
Choosing your strategies from your Auto Trade Dashboard:
This video walks through everything you need to know about CML-A. It includes a primer on how our neural networks make predictions as well as how we identify anomalies and market manipulation.
Learn more about this approach in our Machine Learning Technology Guide.
CML-A is designed to trade based on the exceptions to our neural network predictions. The reality is machine learning will likely never predict 100% of market movements. There is always going to be a certain amount of chaos, market manipulation, and unexpected events.
CML-A exploits the known limitations of machine learning and statistics to identify unusual price movements as they are unfolding.
The name “Anomaly Detection” comes from an understanding of the way patterns work. For example:
- When the market patterns look like they do now, 97% of the time, price goes up by a small amount. However, now it is going up by a large amount. Current behavior does not match past patterns. This is a bullish anomaly. Something unusual is causing the market to go up.
- Likewise, if the market normally would go down but instead goes up, this is a bullish anomaly as well. Instead of pulling back like normal, some unusual force is pushing price up.
- These situations can also be viewed through a bearish anomaly lens. When the market patterns look normally result in a sideways price movement, but instead price is dropping quickly, there must be something causing this unusual movement.
As you can see in these examples, the market is behaving abnormally. It is likely being manipulated by some unusual activity or force. It is this force we want to identify and follow.
Read more about our manipulation detection.
Note: CML-A is an enhanced version of our legacy “Manipulation Detection” model, which you may find references to.
Many of the biggest movements in crypto happen in a fast, unexpected manner. CML-A targets these moves specifically. It is designed to identify and act on non-standard behavior.
Under choppy, sideways markets, CML-A may deliver choppy trades that result in losses.
CML-A adds a unique perspective to our platform on machine learning trading strategies. It leverages the realities of dealing with probabilities to capitalize on the large, unexpected movements in the crypto markets.