Year-end Sale % OFF 
Abstract
This research is the first attempt to customize a trading system that is based on second order stochastic dominance (SSD) to five known cryptocurrencies’ daily data: Bitcoin, Ethereum, XRP, Binance Coin, and Cardano. Results show that our system can predict price trends of cryptocurrencies, trade them profitably, and in most cases outperform the buy and hold (B&H) simple strategy. Our system’s best performance was achieved trading XRP, Binance Coin, Ethereum, and Bitcoin. Although our system has also generated a positive net profit (NP) for Cardano, it failed to outperform the B&H strategy. For all currencies, the system better predicted long trends than short trends.
Highlights
We found that the system can predict price trends of cryptocurrencies, trade them profitably, and in most cases outperform the buy and hold (B&H) simple strategy
Researchers have documented that the cryptocurrency market is largely affected by herding behavior (Vidal Tomas et al [1]; Gama Silva et al [2]); techniques such as machine learning and technical analysis improve price forecasting when they integrate additional variables related to sentiment
We altered the number of days systematically starting with one day until the number of recorded trades dropped to zero
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. Different processes were used to identify and forecasts cryptocurrencies’ price behaviors, including linear and nonlinear and other technical tools. This research makes the first attempt to predict price trends of major cryptocurrencies using second order stochastic dominance (SSD) conditions. Our aim is to detect stochastic dominance superiority changes and exploit them for profitable trading. We tested our system for five major cryptocurrencies: Bitcoin, Ethereum, XRP (Ripple), Binance Coin, and Cardano. Cryptocurrency such as Bitcoin is traded on special exchanges including Etoro and CoinBase. We found that the system can predict price trends of cryptocurrencies, trade them profitably, and in most cases outperform the buy and hold (B&H) simple strategy
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
