How exactly does this work i don't know code can you explain it in layman's terms
jacdr
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@cryptikk, it is a lagging indicator telling the relative risk of buying bitcoin at the current time. for example, buying at 20k in 2017 is riskier than buying nowadays in 2023 based on average historical prices. Meaning, if risk indicator is too "hot" because based on average prices before, it hasn't reached a certain price yet, it maybe best to wait for that price to normalize (in a few years) before buying. Works best in my opinion if you use weekly chart. Hope this helps.
Thanks for sharing, I've probably seen it in a bunch of his videos so appreciate being able to try it.
jacdr
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@AtomOfScent, this is a simpler version of what he uses. But if you study the historical performance, it's good enough to measure where we are in a cycle.
MMTraderX
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Hi. I'm glad I found your indicator, but I notice that score is very different from Ben's. His was 0.736 on March 11, 2024, and yours was 0.50. Are there any options to “calibrate” it? Thanks.
jacdr
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@MMTraderX, yes you are absolutely right. This is not 1:1 with Ben’s current risk metric. This is an old version of that from also an old video where he described a lower resolution version of his metric. I’m currently looking into incorporate some better way of flattening this SMA based metric. Although if you look at it, there looks to be linear relation via the tops of risk per cycle. You can still sort of derive your risk management from that perspective.