Bitcoin Has Upside Potential: Building Successful Investing Strategy
Korbinian Koller | May 25, 2020 05:47AM ET
This isn’t just a catchy phrase. It is the only way to riches. It is statistically proven that most market speculators, that try to blindly follow a trading recommendation fail to produce consistent results. Why? The most difficult part of trading is execution. No matter if you trade on a neighbors hunch or a computerized trading system, it is sheer impossible to execute a foreigner’s system. You might spend thousands of dollars on a sophisticated black box software and will find yourself turning it off at exactly the worst moment. Trading is psychology! When a stranger’s advice hits a series of losses you simply can’t stand the heat anymore. Right at that point though, the winning trades might follow. Consequently you underperform the system since you skipped the execution of those vital winners. Built not bought.
BTC-USDT, Monthly Chart, Mandatory Large Time Frame Overview:/h3
One core component for ending up in the green is a roadmap. A high time frame overview of what your trading instrument is doing from a larger perspective. In the case of Bitcoin we are finding ourselves at exciting times of a possible triangle breakout to the upside. A strong supply zone right below the actual price supports the general tone to be bullish.
BTC-USDT, Daily Chart, Aggressive Early Entry:/h3
With the principles of our quad exit strategy minimizing risk, we already took an aggressive weekly long entry based on the above daily 40 simple moving average support and other key factors.
Weekly Chart, Built Not Bought, BTC-USDT versus XMR-USDT, Bitcoin Leading:/h3
Get The News You Want
To further reduce risk we use an inter-market relationship we recently extracted. The above weekly chart depicts the relationship between Bitcoin (white line) and Monero (dark blue line).
Points 1,2 and 3 are time starting points where you can make out that Bitcoin has found its recent absolute low within that week.
From those points on Bitcoin prices advanced and built over the next weeks double or triple bottoms. Illustrated by rising green lines. Most likely these price advances created in most trading systems confirmed long entries.
While Bitcoin at the starting points had its recent lows, Monero actually continued each time trading lower in the weeks to follow. Indicated by falling orange lines.
One way of taking advantage of this market relationship between those two trading vehicles would be of taking a confirmed Bitcoin long entry signal and rather trade the still suppressed Monero prices. Risk is smaller due to the tighter stop and better risk-reward ratio. Consequently one could potentially get more bang for the buck.
In a way Bitcoin can be used as a leading indicator for a Monero trade.
BTC-USDT versus XMR-USDT, Weekly Chart, Built Not Bought, Good Exit Timing:/h3
Let us now look at exits. We find a similar relationship to be mutually beneficial to time exits well on Monero through Bitcoin price observation.
We would like to encourage the reader to find very similar relationships extended through our whole portfolio. This way feeling more familiar with our entry and exit timing. As a result making principles and market relationships that we observed your own as well.
Built not bought
/h3
It is the series of trades that make a long term winner, not an individual trade. Since we do not have an intuitive aspect as humans for thinking in probabilities we need to gain psychological strength elsewhere for proper execution. Only in-depth knowledge of a trading system paired with the repetition of reinforced positive results can lead to execution confidence. We are aware that not everybody can master all aspects of becoming a successful investor in creating their own systems from scratch. There are no free lunches though and as such we encourage to take our trading principles, stack them and make them at least partially your own. You can’t just buy a Ferrari and immediately expect to win the race. Looking under the hood and being aware of the core components, in addition to taking at least a few driving lessons, is part of becoming a winner.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.