...That said, while I posted about other experimental methods before, this is one where I'm inclined to put some money on the signals myself, because of what seems to be a pretty good risk/reward ratio (I would probably set a stop loss in addition to the signals, however).
Looks good, will have some of that.
How tight a stop? What has the maximum drawdown been over the test timeframe?
From the top of the April 2013 bubble: about 50%. From the 2011 bubble: about 60% even. Not that great if dollar preservation is your highest ranked goal, but like I wrote above, there are 3 ranked goals I had in mind, and riding out a rally for the most part before selling is at the top of that list.
I would probably only set a stop for a buy signal that looks a bit dubious to me (like the one I expect now
). The buy signal come in a bit easier than the sell signals, so it makes sense perhaps to reign them in a bit. How tight depends, again, on your preference for USD preservation vs BTC accumulation, but I'd say at least 5%, up to 10% - tighter than that, and it probably won't work well with the comparably large moves this method seems to accept as "noise" between the tradeable swings.