Backtests - Memecoin strategy

A lot of effort has gone into backtesting strategies for automatically trading memecoins based on social attention. This process has been particularly challenging due to the high volatility of these tokens, making risk management a complex task. If the downside risk per trade is too large, the strategy may face significant losses due to frequent stop-loss triggers, even though it might capture larger price movements when they occur. On the other hand, if risk management is too tight, the strategy could miss out on valuable opportunities.

Our approach balances this trade-off by maintaining acceptable downside risk while maximizing potential upside. The system uses a combination of social metrics, including social mentions, dominance, and sentiment, along with market traits like momentum and safeguards to avoid entering during unfavorable conditions. This strategy has helped maintain small downside risks while achieving significant returns.

Ethereum mainnet memecoin strategy

Equity Curve

Equity curve of eth memecoin strategy

Performance Summary

Metric	Strategy	ETH
Start Period	2023-01-01	2023-01-01
End Period	2024-10-27	2024-10-27
Risk-Free Rate	0.0%	0.0%
Cumulative Return	13,421.61%	108.81%
CAGR%	1377.96%	49.8%
Sharpe	3.3	1.01
Sortino	9.75	1.56
Max Drawdown	-25.83%	-45.27%
Longest DD Days	125	229
Gain/Pain Ratio	1.48	0.16
Profit Factor	2.48	1.16

Performance Metrics

Trading period length	659 days 0 hours
Trading start	2023-01-01
Trading end	2024-10-27
Return %	13421.61%
Annualised return %	7433.82%
Cash at start	$10,000.00
Value at end	$1,352,161.24
Time in market	55.08%
Trade volume	$16,819,822.62
Position win percent	30.74%
Total positions	244
Won positions	75
Lost positions	169
Stop losses triggered	244
Stop loss % of all	100.00%
Winning stop losses	75
Winning stop losses percent	30.74%
Losing stop losses	169
Losing stop losses percent	69.26%
Realised profit and loss	$1,340,605.99
Unrealised profit and loss	$1,555.25
Portfolio unrealised value	$18,642.74
Cash left at the end	$1,333,518.51
Average winning position profit %	218.63%
Average losing position loss %	-13.92%
Biggest winning position %	6675.03%
Biggest losing position %	-51.99%
Average duration of winning positions	9 days 15 hours
Average duration of losing positions	2 days 6 hours
Average duration between position openings	2 days 16 hours
Average positions per day	0.37

DISCLAIMER: The following results are based on backtests using historical data. Past performance does not guarantee future results, and real-world outcomes may differ.