Create Your Own Custom Calculation for Trading Crypto like a Pro [feat. the Crypto-Exchange I Built]

November 11th 2019 1,058 reads

@binaryoverdoseAlan

Custom calculations have just arrived in the latest update of Binary Overdose the realtime cryptocurrency analysis software, let's take a look.

Custom calculations are simple yet very powerful. Essentially it’s the ability to create brand new columns based on data from other columns.

A simple example would be if we loaded “Volume USD”, a column that shows data in full units, we could then create a custom column called “Volume Millions USD”, divide the previous column by 1 million and hide the original.

Of course there are many more advanced use cases than this and we’ll get into some later in this article.

Volume Weighted Market Cap

To weigh volume as a metric we can multiply it by the market cap. The lower the volume, the lower the overall score.

1. Open the binaryoverdose.com website and click on “Edit”.
   
2. On the bottom right of the dialogue click “Clear Selections”.
   
3. Now open the CryptoCompare menu item in the left panel and select both “Volume 24h $” and “Market Cap $”.
   
4. On the right panel at the bottom click “Add Custom”.
   
5. Give the custom column a name, let’s say “Volume Weighted MC”.
   
6. There should only be 2 available options in the columns selector marked “step 2”. Select both of them. Note that the order you select them in will define which variable name they get assigned, either 

   c0

    or 

   c1

   .
   
7. Now in the calculation text box (step 4 in the graphic) write the following 

   c0*c1

    and click the “OK” button.

We could clean this up a little as the number is really quite big. Change the calculation to 

(c0*c1)/1000000

Here’s one I made earlier:
Volume Weighted MC Live Example

And here’s a quick YouTube example:

Code repo points to market cap ratio (RPMC Ratio)

Let’s do another simple one before we work on a more complex example. To create this new ratio we need to divide code repo points by market cap.

Follow the previous steps again but select the “code repo points” and “market cap” columns instead, you can search for them if you don’t want to navigate the menu tree.

Now instead of multiplying the values just divide them. Make sure you divide Market cap by Code Repo Points though as this time the order does matter.

In the example I sorted by the new “RPMC Ratio” field in ascending order as lower numbers are better. I also added a couple of filters, “Market Cap > 100000000” and “RPMC Ratio > 0” just to filter out some junk.

Here’s an example: BinaryOverdose Code Repo Points Market Cap Ratio.

A complex Custom Ranking System

For the next example we’re going to create a custom ranking system. Let's say we’re trying to value cryptocurrencies based on our own criteria. To do so we’ll pick a number of metrics that were interested in and assign them points between 0 and 2.

We’ll then add up the points and sort the column in descending order.

At the risk of not overly complicating this example we’ll only pick 3 data points, “Number Of Exchanges”, “Sharpe Ratio 30 Day” and “7 Day Change Against BTC”.

Here’s the calculation. It may look complicated at first but there is only one thing you need to know and its repeated 6 times.

(
  c0 == 0
    ? 0
    : c0 < 5
      ? 1
      : 2
)
+
(
c1 > 5
    ? 2
    : c1 > -1
      ? 1
      : 0
)
+
(
  c2 > 0
    ? 0
    : c2 > -2
      ? 1
      : 2
)

Firstly, the 

c0

c1

c2

c0 = Exchanges
c1 = Sharpe Ratio
c2 = 7 Day Change

The “c” stands for column if you were wondering.

Anyway, there are a maximum of 2 points assigned for each metric so a grand total of 6 max per result. A breakdown of how they are assigned is below but if you don’t care you can just go to the live example here (I added a few more columns at the end so our calculation wasn’t lonely).

A note on the syntax (skip if you know what a ternary operator is)

In order to write the calculation we’ll use a JavaScript conditional operator called the ternary operator. It works as follows: 

condition
  ? expression if condition is true
  : expression if condition is false

So if the number of exchanges, lets call that 

c0

c0 < 3 ? 0 : 1 

Because we require multiple conditions we will use a nested ternary operator for each calculation. It may look a little complicated but it should be no worse than an excel function (I know that’s not saying much).

Number of Exchanges Calculation

The Number of Exchanges metric is the total number of exchanges that a cryptocurrency is listed on, in this example it will be assigned the variable 

c0

c0 == 0              // if c0 equals 0
  ? 0                // then 0 points
  : c0 < 5           // else if c0 is between 1 and 4
    ? 1              // then 1 point
    : 2              // otherwise 2 points

Sharpe Ratio Calculation

For Sharpe ratio generally the greater the value of the Sharpe ratio, the more attractive the risk-adjusted return.

So let's say over 5 gets 2 points, between 0 and 4 gets 1 point and under 0 gets 0 points.

Sharpe Ratio will be assigned the variable 

c1

c1 > 5               // if c1 is greater than 5
    ? 2              // then 2 points
    : c1 > -1        // else if c1 is greater than -1
      ? 1            // then 1 point
      : 0            // otherwise 0 points

7 Day change against Bitcoin

For this metric we are looking for projects that have recently pulled back so we’ll assign more points if there has been a larger drawdown.

7 day change will be assigned the variable 

c2

c2 > 0              // if c2 is greater than 0
  ? 0               // then 0 points
  : c2 > -2         // else if c2 is greater than -2
    ? 1             // then 1 point
    : 2             // otherwise 2 points

Don’t forget to check out the BinaryOverdose website and follow us on Twitter for updates. Leave a comment to let us know your experiences with custom calculations or if you need any help making your own. You can also check out this full feature screencast.

Full Disclosure

I (Alan), am the founder of Binary Overdose so am obviously biased as to how great it is. Stay tuned for even more powerful custom calculations coming real soon.