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QuantCheck’s goal is to provide an edge to cryptocurrency traders. We do this by designing proprietary trading models. As of today, our high-timeframe (HTF) cryptocurrency trend model is available to the public. To see how this model has performed on ETHUSDT, click here. Other trading pairs will be available in the future, as an additional offering.

We don't try to buy the bottom and sell the top. We aim to capture the bulk of a move, both to the upside and downside to maximize the effect of compounding. We provide instant email notifications upon model signal changes, with the goal of increasing your risk-adjusted returns.

The model's recent trades on $ETH

ETHUSDT Chart Preview June 2023.png

About the Model

The model is an automated trading system providing both long and short signals using a medium-high timeframe. To simplify, think of the model as a robot that says when to buy or sell cryptocurrencies.

There are periods in the market where the model works well and there are periods where it does not. However overall, following the model and accepting its temporary losses, leads to outsized gains in the longer term. For beginning traders and non-active market participants, following the model’s signals exactly will likely work best.

 

Institutions and sophisticated traders use the model as confluence — adjusting take profit and stop loss according to a particular strategy.

Signal Generation

The long and short signals are triggered based on changes in momentum, trend, volatility, volume, and price. It is purely a quantitative model. Every asset class has a different market structure; one of the beautiful properties of cryptocurrencies is the magnitude of price change realized. The model is able to ride the majority of trend length and compound returns.

There are dozens of variables that go into producing these long and short signals in an effort to be in the right direction of the trade and not get shaken out of the trade, despite tremendous volatility. It is important to review the prior trades executed by the model to fully understand in which situations the model takes trades. Click here to see a list of all trades.

Below is an annotated chart showcasing the model’s trades during Ethereum’s peak in 2022. Note, that the model does not catch pico tops and bottoms; it waits for a trend to begin to form or weaken. The model works best during trending markets and suffers during choppy markets. This is by design. Capturing the meat of the move and bleeding through the choppy markets has been more profitable than any other strategy. 

QuantCheck Labs Trading Signals for ETHUSDT April 2021 - July 2022.png
Note: blue arrows from the bottom are long (buy) signals, and red arrows at the top are short (sell) signals. Open the image in a new tab to see a larger version. 
Timeframe

Trades are executed on a medium-high timeframe. There can be a maximum of one trade per day and there could be no trades for weeks. Expect to get a trade signal around 10 times in a bullish year and around 30 times in a bearish year. 

Trade Invalidation

The model will either go to cash, or switch trade directions upon trade invalidation. An email will be sent to premium subscribers immediately upon signal change. Note that the model's invalidation point waits for confirmation upon daily candle close.

Trade Sizing

We use a 100% equity assumption for each trade. That means if we start off with $10,000 and make a trade that nets a profit of $2,000, the next trade would use $12,000 of capital. If we start with $10,000 and make a trade that ends up being a $2,000 loss, then the next trade would use $8,000. 

Leverage

Backtests do not incorporate leverage. While using 2-3x leverage may increase returns, we do not recommend it due to the potential for increased risk.

FAQ

When is the model most effective?

The model can be used in all market conditions. More specifically it works best in trending markets as seen in the purple box below.

QuantCheck Labs: ETHUSDT example of trending market.png

In a ranging/choppy market as shown in the purple box below, the model doesn’t perform well. However, the areas around it make up for the loss and more. The most profitable approach we have discovered is to aim for the bulk of the movement and endure the choppy markets, rather than trying to catch every small fluctuation. As the saying goes, "A person who chases two rabbits catches neither.”

QuantCheck Labs: ETHUSDT example of ranging market.png

How do I read the charts? When are the trades executed?

On the charts the blue arrow below represent longs (buys) and the red arrow from above represent shorts (sells). The arrows are placed on the open of the next bar. For example, if today is March 2nd the model will analyze data as per 11:59 UTC on March 2nd and if a long signal is triggered, it will be placed on the open of March 3rd. If a purple arrow appears without a blue or red arrow, that signals the model went to cash.

Have commission and slippage been accounted for in the backtests?

In the backtests we use a commission of 0.04%, which should be a sufficient cushion to account for slippage for liquid assets when trading with sufficient volume.

The model makes about 10-30 signals a year. It is too small of a number for commission to make a meaningful impact. So even if you’re not trading with sufficient volume and do not have preferred commission rates, it should not be a concern. 

Does the model only work on ETH?

The model works well for the majority of cryptocurrencies. However, during the beta phase, only the ETHUSDT results will be available.

Does the model scale entries and exits?

The model does not scale into and out of positions. Performance results assume 100% position size immediately at each entry and exit signal. We do not provide guidance on position sizing as that may constitute financial advice. 

Does QuantCheck Labs have a discord or telegram group?

No communication channels via Discord or Telegram are currently available. All interactions and correspondences are exclusively conducted through the official website or via email.

Can I invest my funds with QuantCheck Labs?

We do not invest funds for subscribers. QuantCheck Labs is not registered with any financial regulatory agencies. QuantCheck Labs is purely a research publishing firm and does not provide any financial advice.

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To get general updates from QuantCheck Labs such as new product offerings, add your email to the mailing list below. 

For instant email notifications upon model signal changes subscribe now.

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