[usgroup]

OP is referring to “Chartists” and technical analysis. If you google about for Bitcoin analysis this is unfortunately the sort of stuff that still comes up, sometimes even on Bloomberg . Your Bloomberg terminal will happily draw RSI, MACD, Bollinger bands and the rest of it in 2019 so that you can feel that you’re “adding alpha” as stated in another post.

[mruts]

While charting is stupid (that is, looking at one security time-series for patterns), I don’t believe stuff like RSI, MACD, or Bollinger bands are worthless. Many successful quant models have been built using certain technical indicators (or the extrapolation thereof).

The problem is that these indicators have low IV (information value) and so to produce alpha you need to layer them on top of each other and make a large number of independent bets.

A simple quant bollinger and MVA band strategy could be:

1) set your bollinger bands at, say, +/-1.5sigma apart with a lookback of 2 months, also your MVA with 2 months.

2) long 50 equities in the S&P500 that are between the MVA and the lower band, and short 50 equities above the MVA and below the top band. This is a mean reversion strategy.

3) short 50 equities that broke through the lower band, long 50 that broke above the top band. This is momentum or “breakout” strategy.

[agumonkey]

First I'm quite biased against trading (feels a lot like gambling) also, a lot of the crypto crowd is new to trading and are constantly throwing prediction .. or even prophecies .. based on a few chart rules. None of them ever did math in the lives, they barely know about quant but when high emotions are involved you can say whatever confirms the bias.

[mruts]

No, you’re totally right. I’ve made a fortune and lost it (like 200k) and there was no skill on my part in either direction.

I work in finance for a hedge fund as a quant, and really hope I’m adding some alpha.

Though, sometimes I think all of our profits are due to luck.

[agumonkey]

What annoyed me is that is was waste heat, you win, they lose, capital flows somewhere else. On bitcoin platform you could see millions of dollars shift hands in a second. I was nauseous.. a pinch of that could solve so much things. It's a separate world.