How to get SuperForecasters’ Alpha: trading with Cindicator’s top 0.02% analysts

How to get SuperForecasters’ Alpha: trading with Cindicator’s top 0.02% analysts

In this post, we’re presenting a new experimental product: ready-to-use trading signals from individual top analysts – the ‘superforecasters’ – who have been hand-picked after years of successful forecasting on the Cindicator platform.

First, let’s take a look at the history of how Cindicator arrived at this point.

Experiments with exchanges and hedge funds

It all started with a simple idea: to let anyone make forecasts, not just a few ‘experts’.

Since then, 140,000 people have signed up to make financial predictions in the Cindicator app.

Intuitively, we knew these forecasts were valuable based on the ideas of the ‘wisdom of the crowd’ and ‘superforecasters’ (which is the idea that 2% of people have superior ability to predict future events).

The feedback from professional market participants proved this.

Over the past five years, the Cindicator team has tested hundreds of trading strategies, both manual and algorithmic, simple and highly complex, with equities, options, crypto and even prediction markets. All these strategies used collective forecasts from thousands of analysts registered on the Cindicator platform.

In 2016, the team launched a pilot study with private traders. About 20 traders participated, trading for two weeks based on Cindicator’s min and max indicators for stocks and currencies. The resulting average return of +4.55% (or over +118% annualised) led to a series of other experiments.

In 2017, Cindicator hosted a public forecasting competition with MOEX, one of the world's top 20 stock exchanges by total capitalisation. For the weeks, participants made forecasts for futures contracts for currencies, oil, gold and silver. Aggregating these forecasts generated a +47% annualised return.

Pilots with several hedge funds including Data Capital Management and top Tier 1 investment banks were the next step. Strong results led to continued work with a number of hedge funds and DCM’s co-founder even joined Cindicator as an adviser.

In January 2017, the Cindicator team launched its first questions and indicators for Bitcoin as part of a series of pilot projects with several early crypto funds that have since grown into industry leaders. By May, cumulative returns reached +29.89% (or +87% annualised). Importantly, indicators correctly predicted sell-offs, so shorting Bitcoin during these periods would have generated a double-digit return in BTC.

Today, tens of millions of forecasts later, we are presenting the essence of these years of experiments.

Trading with indicators

Since Cindicator’s token sale, thousands of CND holders use Hybrid Intelligence indicators to trade profitably (e.g. trading options with +84% gains in 11 weeks).

Yet not everybody can use indicators – you need experience and skills to make the right decisions at the right time.

Based on the millions of forecasts carried out, we came up with a consistent strategy for using two-price forecasts from the top analysts. Backtests showed up to a 76.7% profit over the past 17 months.

To illustrate the strategy, here is a question:

[#WEEKLY] The cryptocurrency Bitcoin settled at 9046.51 USDT at 12:00 PM UTC on the Binance exchange on Sunday 3 May. What will be the minimum and the maximum price of BTC/USDT from 12:00 AM UTC on Monday 4 May until 11:59 PM UTC on Monday 11 May?

The analyst gave two answers: the minimum price at 8350 USDT and the maximum price at 9925 USDT for the next week.

If BTC/USDT hits any of these levels in the next 7 days, we should start the trade. In this example, the pair hit the max price on 7 May at 19:00 and we opened a short position.

The stop-loss level is calculated as (max price - min price) * 0.25; the take profit level is calculated as (max price - min price) * 0.5. In this case, the stop-loss for the short position is set at 10318.75 and the take profit at 9137.5. The short position was closed on 10 May at 00:00 with a 7.9% profit.

At that time, BTC/USDT reached the min price and we opened a long position. The next day, the price recovered and hit the take-profit point for the long position at about 12:00 with a 9.4% profit.

To recap, the strategy is straightforward:

  1. Buy at the minimum forecast price and short at the maximum price;
  2. Set the stop-loss order at the entry price: (maximum - minimum) * 0.25;
  3. Set the take profit order so that the risk/reward ratio is 1:2;
  4. If you have an open position and the stop-loss and take profit levels weren’t activated, close the trade at the end of the week in question.

Introducing Cindicator’s superforecasters

Cindicator has created a unique funnel for identifying talented analysts.

Traditional finance is very exclusive: to break into the top Wall Street funds you generally need prestigious degrees and work experience at bulge bracket investment banks.

Clearly, this locks out a lot of talent. It’s as if LA Lakers or FC Barcelona focused on recruiting players with Oxbridge/Ivy League degrees and experience as their team support staff.

With Cindicator, performance is all that matters.

From over 140,000 people who’ve signed up to make forecasts in the Cindiator app, we’ve selected the top 0.02% analysts with long track records (no less than 17 months) of making accurate forecasts for cryptocurrency prices.

For every superforecaster, the Cindicator team examined the front-tested P&L (as if we created a trade based on each weekly forecast) and selected the analysts with consistently positive performances for the past 17 months.

The best P&L for the BTC/USDT pair from a single analyst was +63.6% and a Sharpe ratio of 1.92. The chart below shows the P&L for the top analysts.

Essentially, every superforecaster becomes a portfolio manager, making weekly recommendations for Bitcoin’s price to maximise capital in the base currency of choice (either BTC or USD).

It’s extremely hard to correctly forecast Bitcoin’s price even for a few weeks, let alone 17 months, so we’ve called this the Superforecasters Alpha.

Sign up to get free access to Superforecasters Alpha

We are inviting you to sign up for free early bird access to signals from Cindicator’s top analysts.

We created a special Telegram channel where we will share weekly signals as well as other valuable information about how to use this product in trading. For the next month, access to this channel will be free.

Join the channel now to get the first signals next week.

Unlike Hybrid Intelligence indicators, these are ready-to-use signals with:

  • Entry prices for long and short positions;
  • Stop-loss and take profit targets.

You’ll get recommendations once a week with exact instructions on how to implement it.

You can further adapt the strategy to fit your style and increase or decrease the risk/reward ratio by adjusting stop-loss and take profit orders or taking on additional leverage.

Explore analysts’ individual P&L and Sharpe ratio figures to select the one that fits your preferences – every single one of them is a star performer.