The LANA/USDT Trading Competition: A Case Study of Doubleup
Most people trade their time for money while traders trade risk for money. The aim of trading is taking a risk on an asset with the view to sell it for more in the future. Even though it has been more than 10 years since the birth of Bitcoin, crypto is still in the early phase of adoption and the prices are still (luckily) very volatile.
Because of the high volatility of crypto assets, there are a lot of trading opportunities. Traders need to buy an asset and sell it at a higher price. The bigger the swing the better and more frequent the better. With this in mind, the DoubleUp trading strategy was developed and it is currently being used in the trading competitions at Tokens.net.
DoubleUp trading strategy
The details of the strategy are described at https://ssrn.com/abstract=3436041. DoubleUp trading strategy splits the assets in two with 50% initial allocation to each selected currency, ie. LANA and USDT. We chose 50% because there is a 50% chance that the next move of the coin price will be up and 50% chance that it will be down. Also, we need one asset to sell and one asset to buy. If the price of LANA goes up, the strategy will sell some LANA and get more USDT and vice versa. If the price goes further up, the strategy will sell more LANA until it runs out.
The orders further away from the starting point have higher quantities than the ones closer to the starting price. When the LANA drops again to about where the strategy started, it will buy back more LANA. This way you will end up with more of both currencies than you had at the beginning.
When asset prices are volatile, this can happen often, and you don’t have to wait too long for the trend to reverse and to restart the cycle again.
This, however, is not a free lunch and as we mentioned at the beginning that traders trade risk, the strategy can end up selling out LANA if LANA keeps going up. In this case, you will end up with more USDT. If LANA keeps going down, you will end up with a lot more LANA which will be worth less.
Results from SOLO/USDT trading competition
The strategy yielded excellent results during the past trading competition on Tokens.net even though we didn’t win the trading competition. While the winner was the one with the highest volume, we were aiming for the return. The return and the increase in the number of currencies can only be achieved if the prices are volatile and are not going only in one direction.
The first trade on SOLO/USDT was a good start, and it yielded 24% in less than a day. The trading pair from the past trading competition (SOLO/USDT) was the most profitable currency pair for users of DoubleUp.
LANA trading competition on Tokens.net started recently, and we are looking forward to the results from this competition. Don’t forget that you typically don’t pay commission on Tokens.net as with www.DoubleUp.pro you are typically a market maker. This additionally boosts your trading results.