How to Trade Crypto With a Tested Strategy: Bitcoin and Ether Rules vs Holding
Michael Whitman
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Trading since 2017, full-time since 2020
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YouTube creator, 137K subscribers
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Published 2026-11-07
To trade crypto with a strategy, write the exact rule for entering, exiting and sizing, charge the exchange fee on every buy and sell, and test it on daily prices against simply holding. In our 2016 to 2026 test, holding bitcoin beat all three trend rules after fees, though every rule cut the worst fall.
Covered on this page, for traders outside the US: BYDFi and WEEX.
Most crypto strategy guides list styles and stop there. This one runs three simple, fully written rules on a decade of daily bitcoin and ether prices, charges a real exchange fee on every trade and compares the result with doing nothing. The comparison is the part that decides whether a rule is worth the effort.
Before you start
An exchange account in a country the venue accepts. Venues set their own residency rules in their terms. In the US, Kraken and Interactive Brokers (IBKR) offer crypto trading; on 7 Nov 2026 IBKR’s crypto page listed commissions of 0.12% to 0.18% of trade value, so the venue alone can change the fee a rule pays. Outside the US, BYDFi and WEEX run spot and futures markets. The guide to using a crypto exchange covers order types and custody.
The venue’s maker and taker fee for your volume tier. On 7 Nov 2026, Kraken Pro’s entry tier charged 0.40% for a resting limit order (maker) and 0.80% for an order that fills at once (taker). Those two numbers are this page’s main fee and its stress case.
Daily price history for the coin, weekends included. Crypto has no closing bell, so a daily “close” is a convention: the data here uses the UTC day.
A rule written in one sentence for entry, exit and size. If it needs a judgment call at any point, it cannot be tested.
The steps
1. Pick one coin and one chart timeframe before choosing any rule.
Testing many coins and keeping the best is a quiet way to fool yourself. We fixed bitcoin and ether on the daily chart first.
2. Write the entry, the exit and the position size as one sentence each.
Ours, for the 200-day rule: buy when the daily close is above the 200-day average, sell when it closes below, put the whole account in or out.
3. Look up your exchange fee and charge it on every buy and every sell.
Use the taker fee if you will trade with market orders. A rule tested without fees describes trades no exchange would have filled at that price.
4. Run the rule once over the full history and record four numbers.
End value, yearly rate, worst fall from a peak and the number of trades. Trade at the next day’s open, because a signal on today’s close cannot be filled at that same close.
5. Run buy-and-hold over the same dates with the same fee.
This is the bar. In crypto it is a high one, because the two largest coins rose so far.
6. Split the history in half and rerun each half from a fresh $10,000.
A rule that only wins in one half is a description of that half.
7. Write down which trade-off you accept before you fund the account.
Lower end value for a smaller worst fall is a legitimate choice. Not knowing that you made it is the mistake.
How to tell it worked
You have a finished table: four numbers for each rule and for holding, for the full period and for each half, so at least 12 cells per rule. You know how many trades the rule made, what the fee took, and whether it beat holding in both halves. Our bitcoin 200-day row, for example, reads 35 trades, a 24.16% fee drag and a worst fall of 70.4%. If any cell is blank, the test is not done.
A worked example: what one round trip costs
Take a $10,000 position at Kraken Pro’s entry-tier maker fee of 0.40%. The buy costs $40.00, which leaves $9,960 of coin. If the price is unchanged when you sell, the sell fee is 0.40% of $9,960, or $39.84. One round trip has cost $79.84. At the 0.80% taker fee, it costs $159.36.
Now repeat it. A rule that trades 35 times with an unchanged price keeps 75.54% of the money, because each fee is charged on what is left: 0.996 multiplied by itself 70 times. At 57 round trips, the number our breakout rule made on bitcoin, 63.32% is left.
That is why fees took more than the arithmetic of a single trade suggests. On bitcoin, the 200-day rule would have ended at $1,616,651 with no fees and ended at $1,226,057 at 0.40%, a loss of 24.16% to fees. The breakout rule lost 36.68% of its no-fee result. Before fees it actually finished $16,095 ahead of holding; after them it finished well behind.
The original data
The test ran on daily Yahoo Finance prices, bitcoin from 1 Jan 2016 and ether from 1 Jul 2018, to the 6 Nov 2026 close, with earlier days used only to warm up the 200-day average. Every rule was long or in cash, with no leverage and no shorting, trading at the next day’s open with the fee on both sides. The rules were written down before the first run:
- Hold: buy on the first day and keep it.
- 200-day: in when the close is above the 200-day average, out when it is below.
- Golden cross: in when the 50-day average crosses above the 200-day, out on the reverse cross.
- Breakout 20/10: in on a close above the prior 20-day high, out on a close below the prior 10-day low.
| $10,000 at 0.40% a side | End value | Yearly rate | Worst fall | Buys | Time in market |
|---|---|---|---|---|---|
| Bitcoin, hold | $1,751,573 | 61.0% | 83.4% | 1 | 100% |
| Bitcoin, 200-day | $1,226,057 | 55.8% | 70.4% | 35 | 62.1% |
| Bitcoin, golden cross | $69,475 | 19.6% | 63.6% | 9 | 41.3% |
| Bitcoin, breakout 20/10 | $1,123,803 | 54.5% | 57.6% | 57 | 47.0% |
| Ether, hold | $48,899 | 20.9% | 83.2% | 1 | 100% |
| Ether, 200-day | $153,549 | 38.7% | 71.8% | 23 | 51.9% |
| Ether, golden cross | $60,870 | 24.1% | 78.2% | 9 | 51.9% |
| Ether, breakout 20/10 | $71,559 | 26.6% | 65.8% | 44 | 38.3% |
The halves change the story for ether. From a fresh $10,000 on 3 Sep 2022 to 6 Nov 2026, the 200-day rule ended at $19,384 against $14,114 for holding, but the breakout rule fell to $4,634 and the golden cross to $9,285. For bitcoin from 4 Jun 2021, holding ended at $19,225 and the three rules at $18,551, $15,505 and $18,104, so no rule beat holding in either half. This is the split from step 6 doing its job: a full-period win can hide a half that lost.
At the 0.80% taker fee the ranking holds: bitcoin’s 200-day rule ends at $928,799 and its breakout at $710,324, while holding barely moves, to $1,744,539. Holding pays the fee once, so a higher rate hardly touches it.
The daily values for every rule are in the bitcoin and ether rule file.
| Dataset | Covers | Pages citing it | Download |
|---|---|---|---|
| Daily account value of four bitcoin and ether rules, 2016-2026 | BTC-USD from 1 Jan 2016 and ETH-USD from 1 Jul 2018, to 6 Nov 2026, at a 0.40% fee per side | 1 | Daily account values (CSV) |
What makes crypto different to trade
It trades every day of the year. There is no weekend gap to plan around, but there is also no pause, so a stop or alert has to be live on Saturday night. Bitcoin’s biggest days were less likely on weekends in this sample: 12 of its 90 moves of 10% or more since 2016 came on a Saturday or Sunday, 13.3%, against weekends making up 28.6% of all days. Ether showed the same tilt from mid-2018, 18 of 108, or 16.7%.
The swings are larger than in stocks. Over the 365 days to 6 Nov 2026, bitcoin’s daily moves came to a volatility of 44.4% a year and ether’s 60.3%. Position size has to shrink to match, or one normal week can do the damage of a bad year in a stock index.
Futures add costs a spot account does not have. Perpetual futures charge or pay a funding rate between longs and shorts at set intervals, and leverage brings the risk of liquidation before a stop is reached. Every result on this page is spot, unleveraged.
Each exit is a taxable event in the US. The IRS treats digital assets as property and says transactions must be reported whether or not they produce a gain. A rule that sells 34 times creates 34 sales to report, which the crypto tax page walks through.
When it fails
One price history is one path. Bitcoin and ether each give a single run of about a decade, and two coins are not a sample of crypto. Ether’s 200-day result rests mostly on its first four years, and a rule that wins on one coin and loses on the other has not shown an edge.
Whipsaws are where trend rules bleed. In a sideways market the close crosses its average again and again, and each crossing pays two fees. The bitcoin breakout rule made 57 round trips in under 11 years, and the fee table above is what that costs.
The fill is not the test’s fill. The test buys at the next day’s open on a composite Yahoo price. A real order fills on one venue, possibly at a worse price, and a weekend gap or an outage can make the exit later than the rule says.
Holding is also a strategy, and it failed hard twice. It fell 83.4% on bitcoin from 16 Dec 2017 to 15 Dec 2018 and 83.2% on ether in 2018. Someone who would sell in a fall like that does not get the holding result either, which is the honest case for a rule that cuts the worst fall.
None of this predicts the next decade. Both coins rose by large multiples in the window, which flatters holding. A long falling market would rank these rules differently, and nothing here says which kind of market comes next.
Questions people ask
What is the best crypto trading strategy? No rule we tested beat holding bitcoin after fees. On ether, the 200-day rule did, mostly before 2022.
Is crypto trading profitable? Some rules made money on these dates; none is shown to keep doing so. Fees took between 6.59% and 36.68% of the no-fee results.
How much does it cost to trade crypto? At Kraken Pro’s entry tier on 7 Nov 2026, a $10,000 round trip cost $79.84 with limit orders and $159.36 with market orders at an unchanged price.
Should I day trade crypto? The channel’s intraday stock tests mostly lost after costs, and crypto fees per trade are higher than those tests assumed.
Related
The concept pages explain the assets themselves: bitcoin and crypto cover what you are buying, and trend-following explains why the three rules here exist. To see what a regular buying plan would have done instead of a rule, the crypto DCA calculator runs it on your own amounts, and the crypto profit calculator shows what a single trade returns after fees. Before holding anything for long, how to store crypto safely covers keeping coins off the exchange, and trading strategies, tested shows the same method on 41 stock rules.
This page is educational, not financial advice. Test every idea on your own charts before risking money. Some links on this page earn a commission if you buy through them. It costs you nothing and it does not decide what appears here or in what order — how these pages are made is set out in our methodology.