Smart Arbitrage

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Enjoy. 🥇 [6/6]

We have improved this idea a bit by applying a trailing order, so if the upward trend on Gold persists, we let it ride. [5/6]

Crypto exchanges provide exposure to gold through PAXG or XAU. Buy it on Friday evening, sell it on Monday after markets open. [4/6]

Buy Gold on Friday, sell on Monday. That's it. [3/6]

We have found a solution to how to hedge/profit from this persistent pattern. It is a simple strategy, which has been thriving since Trump came back to office. [2/6]

Traders are obviously exhausted by market swings caused by news. Trump tries to make controversial announcements during weekends, hoping that the initial shock will be reduced by Monday's market open. 🧵 [1/6]

You can try to minimise it through multiplier increase, not just double down, but multiply it by 2.5 or more. But max losses increase as well.We developed a few upgrades which helped increase profitability. We'll post them if this tweet reaches 50 likes. [12/12]

But these returns are from perfect world, in real life there are transaction fees. It means in this case that your average position cost will slide from 50 cents to 52–60 cents, depending on the amount you bet. [11/12]

Now lets estimate profitability. For simplicity, our bankroll should cover 2 losing streaks: 7+: 1.525% 8+: 3.237% 9+: 2.794% 10+: 1.421% Here is simulated 10+ Martingale version [10/12]

Then we calculate a potential profit = number of candles minus number of losing streaks × total loss of the streak: 6: 70080−1276×64 = −$11,584 7: 70080−517×128 = +$3,904 8: 70080−209×256 = +$16,576 9: 70080−81×512 = +$28,608 10: 70080−40×1024 = +$29,120 [9/12]

If we target a max sequence of 6 bets, it means that the 6th bet would be 32$, and if lost the total loss would be 64$. Less than a 1 day profit. If we target 10 bets it means that the 10th bet would be 512$ or 1024$ total loss, which is more than 10 days profit. [8/12]

We calculated consecutive red or green 15 min candles in a row (up / down): 6+ in a row: 633 / 643 (total 1,276) 7+ in a row: 260 / 257 (total 517) 8+ in a row: 103 / 106 (total 209) 9+ in a row: 34 / 47 (total 81) 10+ in a row: 12 / 28 (total 40) [7/12]

The challenge is finding out how large a max losing streak should be. Lets take the last 24 months as a backtest data (more than 70k 15min candles, a decent sample). [6/12]

If we assume there are no losing sequences, and our bet size is 1$, we win 1$ every 15 min, or 96$ a day. Of course in a perfect world when we buy each outcome for 50 cents and there are no exchange fees. [5/12]

If any side incurred a loss, we double a bet for that side in the next round. In this scenario, a sequence of x number of consecutive red or green 15 min candles is a risk. [4/12]

When applying martingale, you have to estimate the max number of bets you can do. It should be rare enough, and not ruin your stack when reached. So we came up with the idea of betting simultaneously on ups and downs.. [3/12]

Martingale is a simple betting strategy, initially applied in gambling. Double down on losses until you win. With the unlimited stack and absence of a max bet limit theoretically there is no chance to lose. But the stack is limited, and there are bet size limits.. [2/12]

We applied a Martingale strategy to Polymarket's BTC 15-min candle markets. Here's how it works, what the data shows, and whether it's actually profitable. 🧵 [1/12]