I have been trading Bitcoin for a little while now. I keep getting closed out of trades pretty well every week. I am getting the Bitcoin Blues.
Trading has been profitable. I would have had great returns by buying one Bitcoin in February and holding it all the way through. Why is that you might ask?
Well I am trading using leverage. That means I borrow the money to buy more Bitcoin than I could reasonably afford. I buy 10 at a time. Because of this I could lose 10 times more than I could reasonably afford. So I put stop losses on the trades that I place. If price drops below the stop loss level the trade is closed out. This protects me from 10 times losses I could reasonably afford. It also means I am out of the trade and need to find another point to re-enter.
What I have been noticing is I am getting stopped out quite often in Friday trade. I am getting Friday Bitcoin Blues.
I love data. Time to dig into the data to see if the evidence supports the observation. So I opened up a chart and drew in lines for every Friday and drew arrows to every Friday. Then I took out the lines so I could see what happened each Friday. Then I took out the arrows for the days when price went up. And I marked all the up days with ticks and all the down days with crosses. I did make one adjustment for Easter - the arrow went to Thursday.
Guess what?
9 Fridays DOWN out of the last 15 - down quite a bit too each time - anything from 3 to 5%. That is not a coincidence. Why does that happen? Two theories.
- Traders close out their positions before the weekend to take their profits and trade again on Monday.
- Bitcoin miners pay their bills once a week. They sell on Friday to pay their staff and for their electricity costs.
Here is the evidence
Lesson. I sell on Friday and buy again on Monday. And if you are new to Bitcoin buying - buy on Monday and avoid Thursday afternoon.
Images: MaxPixel for free use - thanks. http://maxpixel.freegreatpicture.com/Acrylic-Abstract-The-Blues-Art-Fantasy-256826
This is very interesting and helpful. Thank you @carrinm!
Thanks
:)
Thank you.
Hey there I do a bit of trading to have a few questions
Do you trade any Altcoins?
Do you use any trading tools like coindata
Do watch the coin.igy podcast they do great brake downs to limit risk
I trade all sorts of things but only Bitcoin of the crypto currencies. The only tool I use is price charts. They tell me everything that is happening