Trading The Bitcoin Halving
Cryptohopper Newsletter
Market Analysis
After failing to break the resistance around $10,000, Bitcoin is closing in on the support level at $8,000. Bitcoin has had a correction after the last halving, so a short bear market scenario is not out of the question. The first and second halving overall provided some excellent opportunities for position traders. Today we will look at a strategy that would have increased your account by 3,500% if you had used it during the last halving!
If you had bought $1,000 Bitcoin in September 2016 at $600 and held it to the top in December 2017 at $19,600, you would have made about 3,150%, and your account value would be 31,150$. Most people will call this utterly unrealistic, as it is almost impossible to buy something at the bottom and hold it all the way to the top. However, what if we told you that there is a strategy that would have increased your account even more during this period?
Position Trading
A position trader is an individual who holds an investment for weeks or even months at a time. They are not concerned with the short term fluctuation and aim to catch the more significant swings in the market. According to Investopedia, most position traders place less than ten trades a year. So how can someone who barely trades beat a very bullish market? That’s what we are going to find out int he next section.
Position Trading Strategy
Our goal with position trading is to catch the bigger trends. Therefore trend-following indicators are the most appropriate to use in this case. In our case, we will use the crossover of the 5 and 25 Exponential Moving Average (EMA). When the 5 EMA crosses over the 25 EMA upwards, we will take a long position, and when it crosses it downwards, we will close our position. This trading method will allow you to ride each swing almost to the top.
Then, if you have 1,000$ and you made the following 5 trades with these gains: 58%, 36%, 132%, 90%, 270% then your account will look like this:
1000$ * 1.58 * 1.36 * 2.32 * 1.9 * 3.7 = 35,046$.
This strategy provides an even greater reward than if you would have bought at the bottom and held all the way to the top. Simultaneously, it is a lot more realistic as it is a simple trading strategy based on the EMA crossovers.
Other trend-following indicators that you can use are the SMA, DEMA, TEMA, KAMA, MESA, Parabolic SAR, Ichimoku Cloud, T3, WMA, etc. All of these indicators are available at Cryptohoper, along with many more.
Market Analysis
After failing to break the resistance around $10,000, Bitcoin is closing in on the support level at $8,000. Bitcoin has had a correction after the last halving, so a short bear market scenario is not out of the question. The first and second halving overall provided some excellent opportunities for position traders. Today we will look at a strategy that would have increased your account by 3,500% if you had used it during the last halving!
If you had bought $1,000 Bitcoin in September 2016 at $600 and held it to the top in December 2017 at $19,600, you would have made about 3,150%, and your account value would be 31,150$. Most people will call this utterly unrealistic, as it is almost impossible to buy something at the bottom and hold it all the way to the top. However, what if we told you that there is a strategy that would have increased your account even more during this period?
Position Trading
A position trader is an individual who holds an investment for weeks or even months at a time. They are not concerned with the short term fluctuation and aim to catch the more significant swings in the market. According to Investopedia, most position traders place less than ten trades a year. So how can someone who barely trades beat a very bullish market? That’s what we are going to find out int he next section.
Position Trading Strategy
Our goal with position trading is to catch the bigger trends. Therefore trend-following indicators are the most appropriate to use in this case. In our case, we will use the crossover of the 5 and 25 Exponential Moving Average (EMA). When the 5 EMA crosses over the 25 EMA upwards, we will take a long position, and when it crosses it downwards, we will close our position. This trading method will allow you to ride each swing almost to the top.
Then, if you have 1,000$ and you made the following 5 trades with these gains: 58%, 36%, 132%, 90%, 270% then your account will look like this:
1000$ * 1.58 * 1.36 * 2.32 * 1.9 * 3.7 = 35,046$.
This strategy provides an even greater reward than if you would have bought at the bottom and held all the way to the top. Simultaneously, it is a lot more realistic as it is a simple trading strategy based on the EMA crossovers.
Other trend-following indicators that you can use are the SMA, DEMA, TEMA, KAMA, MESA, Parabolic SAR, Ichimoku Cloud, T3, WMA, etc. All of these indicators are available at Cryptohoper, along with many more.
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