Since you all love predictions, I built a trading algorithm that predicts the hourly price of Bitcoin, and places trades based on its predictions. I've open sourced it too.

The thought is to predict a new worth every hour, after which act on this prediction by putting a trade. In an effort to practice the model, I used a dataset with the hourly worth of Bitcoin from 2013 to 2022 included. I settled for an hour considering that 1 minute seemed too near matter and 1 day can be taking an excessive amount of of a chance.

I used historical Kline (candlestick) knowledge. Every complete candlestick has: Open, High, Low and Close prices while open candles solely have an Open and newest worth. The model was educated on the Open and Excessive costs.

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The way it works

At first of every new 1h candle, the prediction model will probably be given the current Open worth of the brand new open candle, and shall be tasked to predict the possible “Excessive” worth of this candle. Here is an example of a prediction made on 22/12/2022 at 12:28 GMT

22/12/2022 12:28:49 Shopping for BTCUSDT. Present worth is 16823.97, predicted High is 16961.639. Working...

Immediately after making the prediction, the algorithm will proceed to Buy BTC utilizing the Binance API.

For the subsequent hour, the algorithm will verify every second if the current worth of Bitcoin is the same as or larger than the prediction. If it is, the Algorithm will instantly close the order.

Nevertheless, if after one hour the anticipated worth shouldn't be reached, the algorithm will routinely promote the Bitcoin it purchased as a result of the model and the prediction may have lost their efficiency.

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Weak spots

I haven’t extensively examined the algorithm but, so the performance of this trading strategy continues to be unknown, nevertheless listed here are some things that may in all probability have an effect on its performance:

• It tends to all the time predict a better “high” in comparison with the open worth, which means that the algorithm seems to assume that even purple candles could have a wick (verify the candle anatomy above in case you don’t know that this implies).
• The algorithm is sort of simple and not very customizable, it might do with a cease loss / take revenue and different enhancements, however this only a proof of concept.

I'll continue to test this out in the next week or so and report back with results. For those who're fascinated with enjoying around with it, I've open sourced it here: https://github.com/CyberPunkMetalHead/cryptocurrency-machine-learning-prediction-algo-trading

By default, the bot will only place check orders so there's no danger to only letting it run and seeing the way it performs. For stay trading (which I don't advocate) see the GitHub repo or this article for step-by-step instructions. Lastly, this is only a easy proof of concept and the code can undoubtedly be improved, I will in all probability make more enhancements to the repo within the following days, however if you wish to contribute on GitHub, be happy to submit a pull request.

I'll report back in every week or so!