Long before we opened Blockforce to outside investors in March 2019, we were already deep in the development of our Alpha Predator System (APS). We unveiled the first iteration of the APS back in October 2018 when it was a single algorithmic model. Over the past few years, we have expanded upon and refined the Alpha Predator System to not only include multiple complementary trading algorithms, but also our framework for adding new assets and algorithms to the system, as we outlined in Blockforce’s Investment Strategy post.
Another piece of the evolution was the addition of our naming convention for the various algorithms we have developed. We devised a naming convention based on the team’s affection for national parks in an attempt to better communicate the various strategies we run simultaneously. We named our first set of algorithms the Denali Series and more recently, we added the Yosemite Series of trading strategies. These two series are based on very different market signals and each is optimized to perform best in different types of market conditions. Thus, the two series complement each other and increase the robustness of the overall portfolio when run together.
It’s also worth noting that each series refers to the type of trading strategy so it’s possible to run multiple algorithms within a single series for multiple crypto assets. In fact, that’s exactly what we do. Take, for example, the Denali series. We have several Denali algorithms tuned specifically for ETH over different time frames, take profit rates, and other variables. This approach affords us the opportunity to create strategies for the fund that are based on the same trading principles, but with different levels of turnover, volatility and or target returns. Currently, with our Yosemite series the algorithms are primarily tuned for BTC and ETH but based on some initial backtesting, the systems appear to perform very well with other assets as well. For our Denali Series, we have already put BNB into production and are currently working on incorporating SOL to increase the diversification of our portfolio and protect against the downside risk of our largest positions. As markets continue to grow and liquidity increases for more assets, there is no reason we couldn’t incorporate other assets into each series of algorithms.
So what exactly are the Denali and Yosemite series? Let’s pull back the curtain a bit.
Denali National Park encompasses 6 million acres of Alaskan wilderness including North America’s tallest peak, Denali (formerly Mount McKinley). We figured this was an appropriate name for a series of algorithms designed to capture the large price movements we so often see in the crypto markets. The Denali Series is a trend following strategy based on simple moving averages (SMA) and exponential moving averages (EMA). As momentum builds in the market in either direction, our Denali algorithms look to capitalize on that momentum by going long or short. The system also has an added feature of mean reversion at the extremes so that if the market gets too far ahead of itself to the upside or downside, the algorithm will start to wind down the trade after capturing significant gains.
Yosemite National Park is famous for its Tunnel View, the iconic vista of towering Bridalveil Falls and the granite cliffs of El Capitan and Half Dome. The peaks and valleys from that viewpoint are a perfect visual representation for a strategy that does well in volatile markets. Our Yosemite Series identifies reversals in price using probabilities based on market deviations. As a result, it attempts to predict when markets are likely to get more volatile and then enters the trade based on those probabilities.
The crypto industry is constantly evolving which means we are constantly testing various parameters within the algorithms and working on new series all together. For example, we may backtest an existing model but vary the interval range between 1 hour to 8 hours for Yosemite and 1 hour to 24 hours for Denali which produce wildly different results. We may also increase or decrease the point at which the algorithm takes profits depending on how aggressive or conservative we want to tune the algorithm to be. This is just two of many variables we can tinker with as we look to improve our existing models. In addition, we are also exploring incorporating more assets into each of these series and are constantly looking to build more series to further improve the overall performance of the portfolio.
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Our team has invested through multiple crypto market cycles – giving us experience, insight, and perspective that few crypto fund managers can match. We’d love to connect with you on how to invest in our Strategies, email firstname.lastname@example.org or call us at 619-340-0660, or CLICK HERE to request more information.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital or Onramp Invest.
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