Quant Strategy
Let me explain the key quant indicators and their applications used in HypurrQuant.
Cryptocurrencies have less data available compared to traditional financial markets, making it challenging to devise quant strategies. We aim to address this issue by leveraging AI and Big Data technologies. In this section, we will explain the key indicators used in our analysis and discuss the strategies that can be applied through the Telegram bot.
Key Indicators
Price
Price is the most fundamental indicator, and we process it to create various indices. Key examples include Rate of Change (ROC), Moving Average (MA), Bollinger Bands, Moving Average Convergence Divergence (MACD), and Relative Strength Index (RSI). These indices help identify trends, momentum, and potential market reversals, forming the foundation for effective quant strategies.
Market Capitalization
Market capitalization is a key indicator that represents the total value of an asset, calculated as the product of circulating supply and current price. In quant strategies, assets are classified into large-cap, mid-cap, and small-cap categories to establish investment strategies.
Large Cap: Large-cap assets often have strong performance, significant interest in the cryptocurrency market, solid financial structures, and high credibility (e.g., backed by prominent VCs). They exhibit relatively low volatility, making them suitable for long-term investment approaches.
Mid Cap: Mid-cap assets have a moderate level of market capitalization. Investors holding these assets can expect both growth potential and stability. Mid-caps also have higher liquidity compared to small-caps, resulting in lower transaction costs and reduced susceptibility to market shocks. Unlike large-caps or small-caps, they tend to receive less attention from investors, creating opportunities for stable investment returns.
Small Cap: Small-cap assets have low market capitalization. They possess high growth potential but are often in the early stages of development, with lower prices and less market attention. While they offer high potential returns due to their early growth phase, they also come with significant risks, such as low liquidity and increased vulnerability to market volatility. Additionally, small-caps are harder to research compared to large-caps and mid-caps. However, by diversifying investments in small-caps, it is possible to achieve high returns.
Volume
Trading volume is an indicator that measures the liquidity of an asset in the market. In quant strategies, trading volume is used to assess the level of interest in an asset, market trends, and short-term supply and demand dynamics.
High trading volume indicates that the asset is attracting significant attention from investors. When trading volume increases, price volatility tends to rise, creating greater opportunities for high returns.
Low trading volume represents assets that receive less market attention. If an asset with low trading volume is purchased before it gains market interest, it may offer high investment returns when its volatility increases.
Quant Strategy
AI Quant Strategy
HypurrQuant utilizes deep learning-based prediction models. Unlike traditional financial markets, the cryptocurrency market lacks sufficient financial indicators, making it challenging to apply conventional quant strategies. Through deep learning-based prediction models, we forecast prices for the next 1, 3, 5, and 7 days. Based on these predictions, we provide users with information about assets that have a high likelihood of price increases. When integrated with traditional quant strategies, this approach can lead to higher investment returns.
Below are the algorithms used in AI Quant. BDO (Black Drop Optimization) and PSO (Particle Swarm Optimization) are optimization algorithms that enhance the accuracy of our deep learning models.
DBO-LSTM
PSO-LSTM
Hybrid ARIMA-LSTM
BDO-GRU
PSO-GRU
Transformer
RealTime Quant Strategy
The RealTime Quant strategy relies on current market data rather than historical data, making it one of the most fundamental quant strategies. It allows for the use of all key indicators or a selected subset to tailor the approach. By holding a broader range of assets, it reduces risk while enhancing diversification. Below are detailed strategies that can be applied within this framework:
Large Cap Strategy
Description: Focuses on selecting assets with high market capitalization that exhibit stability and low volatility.
Objective: Helps identify assets suitable for long-term investments due to their reliability and lower risk.
Mid Cap Strategy
Description: Targets assets with moderate market capitalization, balancing stability and growth potential.
Objective: Aims to achieve steady returns while benefiting from the potential upside of mid-cap assets.
Small Cap Strategy
Description: Seeks out assets with high growth potential but higher risk and volatility.
Objective: Pursues high returns by investing in early-stage or undervalued assets.
Risk Management: Requires diversification and asset allocation to mitigate risks.
High Volume Strategy
Description: Identifies assets with surging trading volume, indicating increased market interest.
Objective: Captures short-term momentum and price action driven by heightened activity.
Low Volume Strategy
Description: Focuses on assets with low trading volume, which are often undervalued or overlooked by the market.
Objective: Identifies long-term growth opportunities by investing before these assets gain market attention.
High Rate of Change Strategy
Description: Enters assets with strong price momentum and rapid increases over short periods.
Objective: Pursues high returns through short-term momentum-driven trades.
Low Rate of Change Strategy
Description: Selects assets in oversold conditions with a high likelihood of recovery.
Objective: Targets undervalued assets with strong fundamentals to capitalize on rebound opportunities.
Integrated Strategy Approach
These strategies are filtered using real-time market data for optimal execution. Combining multiple strategies typically yields better results than relying on a single approach. Examples include:
Large Cap + Low Rate of Change Strategy: Selecting large-cap assets in oversold conditions for long-term stability and potential recovery.
Mid Cap + Low Volume Strategy: Investing in mid-cap assets with low trading volume, holding until the price appreciates as market interest grows.
LongTerm Quant Strategy
LongTerm strategies are backtested using 1D candles and are designed to generate consistent returns in the cryptocurrency market. Each strategy can be used independently or combined with others for enhanced results. HypurrQuant continuously updates its quant strategies to adapt to market dynamics. Below are the detailed strategies:
Momentum Strategy
Description: Invests in assets that have shown an upward trend over a recent period (e.g., 7 or 14 days), assuming the trend will continue.
Objective: Capture short- to mid-term momentum for high returns.
Low Volatility Strategy
Description: Focuses on assets with low volatility to reduce portfolio risk, especially in bearish markets.
Objective: Achieve stability and preserve capital during periods of high market uncertainty.
High Rate of Change Strategy
Description: Targets assets with significant price movements over a recent period (e.g., 7 or 14 days) to take advantage of short-term opportunities.
Objective: Generate quick returns from high volatility.
Liquidity-Based Strategy
Description: Invests in highly liquid assets, which are actively traded and less prone to market impact.
Objective: Ensure stability and minimize slippage during trades.
Mean Reversion Strategy
Description: Based on the tendency of asset prices to revert to their mean after deviating. Uses RSI and Bollinger Bands to identify oversold conditions.
Objective: Capitalize on price corrections for undervalued assets.
Value Strategy
Description: Focuses on assets with low market capitalization relative to their trading volume over a given period.
Objective: Identify undervalued assets with potential for long-term growth.
Volume Growth Strategy
Description: Invests in assets with increasing trading volume over recent periods (e.g., 7 or 14 days).
Objective: Leverage growing market interest to achieve gains.
Sector Rotation Strategy
Description: HypurrQuant categorizes assets into sectors such as
{"Meme", "Utility", "Gaming", "AI", "L1", "DeFi"}. This strategy focuses on buying assets within sectors that show significant trading volume and price increases.Objective: Concentrate investments in high-performing sectors for maximum returns.
Usage and Customization
Independent Use: Each strategy can be applied on its own to align with specific investment goals.
Combination: Strategies can be combined for a diversified and balanced portfolio. For example:
Momentum + Volume Growth Strategy: Capture trending assets with increasing trading activity.
Mean Reversion + Value Strategy: Invest in undervalued assets expected to recover.
These strategies are designed to generate long-term returns while managing risk effectively. HypurrQuant continuously enhances its strategies to align with the evolving cryptocurrency market.
ShortTerm Quant Strategy
ShortTerm strategies are backtested using 1H candles, making them well-suited for short-term approaches. Unlike LongTerm strategies, these include market timing strategies, allowing precise entry and exit points. Below are the detailed ShortTerm strategies offered by HypurrQuant:
Momentum Strategy
Description: Invests in assets that have shown upward trends over a recent period (e.g., 7 or 14 days), assuming the trend will persist.
Objective: Capture short-term momentum for rapid returns.
Low Volatility Strategy
Description: Targets assets with low volatility to reduce risk in bearish or high-volatility markets.
Objective: Preserve capital while achieving stable short-term gains.
High Rate of Change Strategy
Description: Focuses on assets that have experienced significant price movements over recent periods (e.g., 7 or 14 days), aiming to profit from short-term volatility.
Objective: Generate quick returns by leveraging sharp price changes.
Liquidity-Based Strategy
Description: Invests in highly liquid assets that are actively traded and less prone to market impact.
Objective: Ensure smooth transactions and reduce slippage during short-term trades.
Mean Reversion Strategy
Description: Assumes that prices tend to revert to their mean after deviating significantly. Identifies oversold assets using RSI and Bollinger Bands.
Objective: Profit from price corrections in the short term.
Value Strategy
Description: Selects assets with low market capitalization relative to trading volume over a specific period.
Objective: Identify undervalued assets with short-term growth potential.
Volume Growth Strategy
Description: Invests in assets with increasing trading volume over recent periods (e.g., 7 or 14 days), indicating rising market interest.
Objective: Benefit from growing activity and price appreciation.
Sector Rotation Strategy
Description: HypurrQuant classifies assets into sectors such as
{"Meme", "Utility", "Gaming", "AI", "L1", "DeFi"}. This strategy focuses on sectors showing increased trading volume and price performance.Objective: Concentrate on high-performing sectors for better short-term returns.
Technical Analysis
Description: Uses technical indicators (e.g., RSI, MACD, Bollinger Bands) to identify optimal market entry and exit points.
Objective: Enhance precision in short-term trades and maximize profit opportunities.
Key Benefits and Considerations
Usage: ShortTerm strategies are designed for investors seeking immediate profits within a short timeframe.
Technical Analysis Advantage: Using tools like RSI and MACD can improve entry timing and increase the likelihood of success.
Risk Management: Due to the inherently higher risk of short-term trading, disciplined risk management is essential to minimize potential losses.
ShortTerm strategies, when combined with effective technical analysis, can unlock profitable opportunities in volatile markets. However, careful monitoring and risk controls are crucial for sustained success.
white paper : https://docs.hypurrquant.com/whitepaper
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