Suppose there’s a person named Xiaopai who runs a copy shop in a university town. On August 17, $APT opened at 0.519. Lao Meng, who runs the milk tea shop across the street, said to buy and just leave it alone—don’t change your mind every day while staring at the candlesticks. Xiaopai set another rule for himself: whenever the closing price is above the previous day’s high for 2 consecutive days, he buys 1000 USDT worth at the close of the 2nd day, then counts 3 more daily candles that have closed and sells at that day’s close. If the previous trade hasn’t been sold yet, he skips any new signal.
I ran these rules on Binance spot APT/USDT daily candles, all closed, from August 17 to November 14 (UTC, 90 candles in total). The November 15 candle hadn’t closed yet, so it wasn’t included. The first 2 candles weren’t enough to determine whether the price had closed above the previous high for 2 consecutive days, leaving 88 days that could be evaluated.
There were 8 instances of consecutive closes above the previous highs in those 88 days. In 3 cases, the previous trade hadn’t been sold yet (August 21, September 3, and October 11), so they were skipped as the rules required. That left 5 trades: 4 winners and 1 loser, with no trades handed off on the same day. After 5 round trips, the 1000 USDT had become 1277.44, a compounded gain of +27.74%, averaging +5.14% per trade. The first 4 trades all gained, compounding to +32.64%, and the account reached 1326.44; the 5th trade lost 3.69%. The best trade was buying at the August 20 close of 0.576 and selling at 0.638 on August 23, for +10.76%; the worst was buying at the October 10 close of 0.869 and selling at 0.8369 on October 13, for -3.69%. Xiaopai had just sold the third trade on September 21, then got another signal the next day, September 22, and bought back in as the rules required. That trade also made a profit.
If Lao Meng had bought at the open on August 17 and held until the November 14 close of 0.4496, his 1000 USDT would have become 866.28, a loss of -13.37%. Over the same period, $BTC was up +1.99%, from the August 17 open to the November 14 close.
The turning point came with the final trade. On October 11, the intraday high reached 0.9655, and the close of 0.9012 was also the highest close in those 90 days. Xiaopai was still holding the position—he had just bought on October 10 and wouldn’t sell until October 13. Another signal appeared on October 11, but because the previous trade hadn’t been sold yet, the rules required him to skip it; he was still in the market, though. Lao Meng’s account could have reached 1860.31 intraday on October 11 (+86.03%), and still stood at 1736.42 at the close (+73.64%). Xiaopai’s position, based on an entry price of 0.869, had reached 1473.73 intraday (an unrealized gain of 11.10% relative to the purchase price) and stood at 1375.59 at the close (+3.71%). By the time he sold on October 13, it had fallen 13.32% from that day’s high. The trade ultimately lost 3.69%, leaving him with 1277.44 after all 5 trades. From that high to the November 14 close, the price fell 53.43%; it would have to rise another 114.75% to recover, and 34 days had passed in between.
The intraday low on November 14 was 0.4283, also the lowest in those 90 days. The close was 0.4496, down 16.10% from the November 13 close of 0.5359. That day’s close was not above the previous day’s high of 0.5598, so Xiaopai didn’t buy.
Lao Meng’s account was higher in mid-October, but later gave back its gains and fell below the initial investment. Xiaopai won 4 of his 5 trades and, thanks to the profits he’d made earlier, didn’t give them all back on the final trade. These are historical data from closed candles; they don’t indicate what happens next and are not investment advice. If you could buy whenever the close is above the previous high for 2 consecutive days and hold for 3 days, or hold all the way through to now, which side would you take?
I ran these rules on Binance spot APT/USDT daily candles, all closed, from August 17 to November 14 (UTC, 90 candles in total). The November 15 candle hadn’t closed yet, so it wasn’t included. The first 2 candles weren’t enough to determine whether the price had closed above the previous high for 2 consecutive days, leaving 88 days that could be evaluated.
There were 8 instances of consecutive closes above the previous highs in those 88 days. In 3 cases, the previous trade hadn’t been sold yet (August 21, September 3, and October 11), so they were skipped as the rules required. That left 5 trades: 4 winners and 1 loser, with no trades handed off on the same day. After 5 round trips, the 1000 USDT had become 1277.44, a compounded gain of +27.74%, averaging +5.14% per trade. The first 4 trades all gained, compounding to +32.64%, and the account reached 1326.44; the 5th trade lost 3.69%. The best trade was buying at the August 20 close of 0.576 and selling at 0.638 on August 23, for +10.76%; the worst was buying at the October 10 close of 0.869 and selling at 0.8369 on October 13, for -3.69%. Xiaopai had just sold the third trade on September 21, then got another signal the next day, September 22, and bought back in as the rules required. That trade also made a profit.
If Lao Meng had bought at the open on August 17 and held until the November 14 close of 0.4496, his 1000 USDT would have become 866.28, a loss of -13.37%. Over the same period, $BTC was up +1.99%, from the August 17 open to the November 14 close.
The turning point came with the final trade. On October 11, the intraday high reached 0.9655, and the close of 0.9012 was also the highest close in those 90 days. Xiaopai was still holding the position—he had just bought on October 10 and wouldn’t sell until October 13. Another signal appeared on October 11, but because the previous trade hadn’t been sold yet, the rules required him to skip it; he was still in the market, though. Lao Meng’s account could have reached 1860.31 intraday on October 11 (+86.03%), and still stood at 1736.42 at the close (+73.64%). Xiaopai’s position, based on an entry price of 0.869, had reached 1473.73 intraday (an unrealized gain of 11.10% relative to the purchase price) and stood at 1375.59 at the close (+3.71%). By the time he sold on October 13, it had fallen 13.32% from that day’s high. The trade ultimately lost 3.69%, leaving him with 1277.44 after all 5 trades. From that high to the November 14 close, the price fell 53.43%; it would have to rise another 114.75% to recover, and 34 days had passed in between.
The intraday low on November 14 was 0.4283, also the lowest in those 90 days. The close was 0.4496, down 16.10% from the November 13 close of 0.5359. That day’s close was not above the previous day’s high of 0.5598, so Xiaopai didn’t buy.
Lao Meng’s account was higher in mid-October, but later gave back its gains and fell below the initial investment. Xiaopai won 4 of his 5 trades and, thanks to the profits he’d made earlier, didn’t give them all back on the final trade. These are historical data from closed candles; they don’t indicate what happens next and are not investment advice. If you could buy whenever the close is above the previous high for 2 consecutive days and hold for 3 days, or hold all the way through to now, which side would you take?