 | Here I demonstrate why its important to have at least 2 year horizon when investing and being mindful of ATH. 2 years is really the bare minimum - 3-4 is better. My analysis. - I downloaded data for BTC.
- I only use data ranging from 2017-11-10 to 2022-08-27
- I'm purposely choosing one of the most tremulous times to get in the market because anything before 2017 is sort of cheating. The last date is because that will simulate buying the very latest 2 years ago.
- I then randomly purchase 200 times within this date. Each time is a different date, randomly chosen.
- I then ranked the table by max drawdown. Max drawdown is how much your portfolio can drop. For example -60% means that your portfolio has dropped 60% max.
Here I demonstrate two things: 1) why its a good time to invest and 2) why its important to purchase with at least 2yrs in mind. Below are the results for the worse and top 10 performers. Worse | invest | bought | total_return_percent | maxdraw | max | net_USD | BTC_close | ATH | relativeATH | | 5000 | 2017-12-18 | 4.12 | -83.1 | 253.5 | 205.90 | 19114.20 | 19497.4 | 0.0 | | 5000 | 2017-12-20 | 19.71 | -80.5 | 306.4 | 985.50 | 16624.60 | 19497.4 | -0.1 | | 5000 | 2017-12-13 | 21.29 | -80.3 | 311.8 | 1,064.40 | 16408.20 | 17899.7 | -0.1 | | 5000 | 2018-01-12 | 42.35 | -76.8 | 383.3 | 2,117.40 | 13980.60 | 19497.4 | -0.3 | | 5000 | 2018-01-15 | 44.01 | -76.6 | 388.9 | 2,200.30 | 13819.80 | 19497.4 | -0.3 | | 5000 | 2017-12-30 | 53.65 | -75.0 | 421.7 | 2,682.60 | 12952.20 | 19497.4 | -0.3 | | 5000 | 2018-01-20 | 54.28 | -74.9 | 423.8 | 2,714.10 | 12899.20 | 19497.4 | -0.3 | | 5000 | 2019-07-08 | 61.98 | -59.5 | 450.0 | 3,099.20 | 12285.96 | 19497.4 | -0.4 | | 5000 | 2020-08-17 | 62.40 | -17.3 | 451.4 | 3,120.00 | 12254.40 | 19497.4 | -0.4 | | 5000 | 2017-12-05 | 67.00 | -72.8 | 467.0 | 3,350.10 | 11916.70 | 11657.2 | 0.0 | Best | invest | bought | total_return_percent | maxdraw | max | net_USD | BTC_close | ATH | relativeATH | | 5000 | 2019-03-14 | 407.12 | 0.0 | 1621.7 | 20,355.90 | 3924.369 | 19497.4 | -0.8 | | 5000 | 2019-03-07 | 408.79 | -0.3 | 1627.4 | 20,439.50 | 3911.484 | 19497.4 | -0.8 | | 5000 | 2019-03-01 | 415.63 | -2.5 | 1650.6 | 20,781.50 | 3859.584 | 19497.4 | -0.8 | | 5000 | 2018-12-29 | 420.92 | -11.0 | 1668.6 | 21,045.90 | 3820.409 | 19497.4 | -0.8 | | 5000 | 2019-03-04 | 429.07 | 0.0 | 1696.2 | 21,453.40 | 3761.557 | 19497.4 | -0.8 | | 5000 | 2018-12-05 | 430.13 | -13.8 | 1699.9 | 21,506.70 | 3753.995 | 19497.4 | -0.8 | | 5000 | 2019-01-14 | 436.99 | -8.3 | 1723.1 | 21,849.60 | 3706.052 | 19497.4 | -0.8 | | 5000 | 2019-02-08 | 442.74 | -1.4 | 1742.7 | 22,137.20 | 3666.780 | 19497.4 | -0.8 | | 5000 | 2019-02-15 | 449.63 | 0.0 | 1766.1 | 22,481.70 | 3620.811 | 19497.4 | -0.8 | | 5000 | 2019-02-07 | 485.42 | 0.0 | 1887.6 | 24,271.00 | 3399.472 | 19497.4 | -0.8 | Here are plots. Worse worse performer Best https://preview.redd.it/n7in52x5kak91.png?1247&format=png&auto=webp&s=b9c3be5b34f782c2c3a1d6bce54c7578856c4014 conclusion - worse performance was when it was in 2017 when it was it was very close or at ATH.
- Best performance when it was bought in 2019 when ATH was below -80%
- even the worse performer was still in the green ( this is why its so important to hold for at least 2 years)
- even more importantly is the drawdown. The best performer had a draw down of 0 while worse performers had drawdown of up to loss of 83% yikes. Why this is important? because that means had you need to cash out, the worse during the best performer was that you break even.
I don't have the entire table here due to space but comment below and I will provide the link if you want.
[link] [comments] |
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