Bitcoin Trading Case Study #3: 69% Profit in 31 Days

How I Made 69% Profit in 31 Days by Trading Bitcoin

The crypto markets have been on a roller coaster over the past month as Bitcoin, Ether, Dash, Zcash and others have hit a number of new all time highs against the US dollar. With each new article that gets published about blockchain, more investors are getting on board the crypto train and the price of alt coins is showing it. Let’s take a look at how I managed to generate a 69% profit in 31 days and how I could have made more if I had also been trading BTC against USDT.

Case Study Parameters

Exchange: Poloniex

Case Study Term: May 16th – May 22nd 2017 (1 Week) buy period and then hold for about 1 month. I liquidated all positions that were at least 40% profitable on June 20th 2017.

Entry Strategy: Buy .01 BTC every single time I receive a buy signal.

Click Here for Buy Signals

Exit Strategy: For this particular case study, my target was to realize at least a 40% gain on a position before I liquidated it. Since the price of bitcoin shot upward in the month of May, I was forced to adjust my exit strategy. I decided to hold for about 30 days from the purchase date before I sold off any positions.

Total Buy Orders: In one week, I received a total of 110 buy signals and bought .01 BTC at each one for a total of 1.10 BTC invested.

Gross Return: 97/110 positions were profitable. My gross return on investment was 1.96 BTC on an initial investment of 1.10 BTC. That’s a gross return of .86 BTC / 77% in about 31 days.

Costs & Overhead: I paid .1 BTC for a 60 day membership to get the buy signals.

Net Profit: My gross return of .86 BTC – .1 BTC for the buy signals = a net profit of .76 Bitcoins for this study. That’s a net profit of 69.09% in 31 days!

Moving Forward

As I have taken yet another crazy ride on the roller coaster of cryptocurrency, I have learned even more about how the crypto markets work. I saw the price of bitcoin hit a few all time highs and then fall back down just days later. With each new study, I find myself learning more invaluable lessons on how to better manage the risks and costs of trading cryptocurrency. Here are a couple points that I feel are the most valuable takeaways from this study.

Poloniex API + Google Sheets: The more I trade, the more clear it becomes that I need to be able to import the real-time price of each currency against my average purchase price. I waste so much time copying and pasting current spot prices from Poloniex to my spreadsheet to see what my profit/loss is on the position. Being able to use the Poloniex API to pull relevant price data in real-time would be a HUGE step forward for my entry and exit strategies and would save me hours of precious time each month. This is a priority moving forward and I will publish a link to the spreadsheet as soon as I have a working prototype.

How to Trade Bitcoin Case Study

Trading USDT against BTC: Over the past month, I have watched the price of bitcoin spike up several hundred dollars just to watch it come right back down a couple days later. Since I have only been trading the alts listed under the BTC tab on Poloniex, I have been missing out on any gains from trading the USDT against BTC. Moving forward, I will be developing and implementing a strategy to trade USDT against BTC so when the price of bitcoin dips or spikes against the US Dollar, I can capitalize on some of that volatility in addition to my regular trades.

My Past Case Studies

I try to create at least 2-4 case studies each month with each study using a slightly different entry or exit strategy. If you would like to take a closer look at some of the strategies I have used in the past, please feel free to take some time to see what I did.

How I Made 35% Profit in 17 Days by Trading Bitcoin

How I Made 14% Profit in 7 Days by Trading Bitcoin

If you think the bitcoin community or someone you know would benefit from this article, please share it with them.

What tools do you use to make the most calculated trades? Let us know with a comment below or a tweet at @BitcoinReasons

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Bitcoin Trading Case Study #2: 14% Profit in 7 Days

How I Made 14% Profit in 7 Days by Trading Bitcoin

It’s been a couple weeks since I published my last case study but I didn’t stop trading and keeping track of my results. I have adapted my strategy based on the data that I collected from my last case study and have found some ways to reduce the time it takes me to place my trades. This study was less profitable but I am still quite satisfied with the results since this study was only a 1 week span and I still managed to produce a profit greater than 10%.

Case Study Parameters

Exchange: Poloniex

Case Study Term: May 9th – May 15th (1 Week).

Entry Strategy: Buy .01 BTC every single time I receive a buy signal.

Click Here for Buy Signals

Exit Strategy: For this particular case study, I sold off any given position if it had increased at least 20% but tried to get at least 40% before I sold. I am also holding every coin that is currently at a loss in an attempt to sell it at a later date at a profit.

Total Buy Orders: I received a total of 88 buy signals and bought .01 BTC at each one for a total of .88 BTC invested.

Gross Return: 67/88 positions were profitable. So far, my gross return on investment is 1.07 BTC on an initial investment of .88 BTC. That’s a gross profit of .19 BTC / 21% in 7 days.

Costs & Overhead: I paid .06 BTC for a 30 day membership to get the buy signals.

Net Profit: My gross profit of .19 BTC – .06 BTC for the buy signals = a net profit of .13 Bitcoins in 7 days. That’s a 14.77% profit in just 7 days and I still receive the buy signals for another 23 days.

Moving Forward

In just 7 days, I have learned even more about how the crypto markets work. Here’s a couple things that I noticed and will adapt my strategy in the future.

More Powerful Spreadsheet Commands: When I first started off I only had some basic understanding of how Google Sheets work but now, just a few weeks later, I have learned quite a bit about how they can be used to reduce the amount of time I spend to make trades. I have used the conditional formatting feature to change the color of the cells based on what my profit margins are. On my last study, I only used green and red to show me whether or not a position was profitable. Now, with the help of conditional formatting, I know my profit and loss simply by looking at the color of the cells.

Bitcoin Trading Case Study #2

My next move is to figure out how the Poloniex API works so I can import live price tickers into my spreadsheet for real-time comparison to each buy signal. This will save me so much time when it comes time to sell off a position and might also help me with making some trades without the need for a buy signal. This is going to be very important in the future because one of my upcoming case studies will not be focused on trading on Poloniex.

Hold Currencies vs. Taking Loss: On my last study, my exit strategy was to sell 100% of my positions at the end of the study but this time I took a different approach. I am holding every currency until it is profitable. This might take me a while but I think that most coins will come back around within about 60 days. I can’t be sure so I will reevaluate these positions, around the 9th of June with a follow-up case study.

My Past Case Studies

I plan on doing 2-4 case studies each month with each study using a slightly different strategy. If you would like to learn more about the other studies that I have conducted, please take some time to read through them below.

How I Made 35% Profit in 17 Days by Trading Bitcoin

Thanks for taking the time to read my case study. If you think the bitcoin community would benefit from this article, please share it.

What tools do you use to make the most calculated trades? Let us know with a comment below or a tweet at @BitcoinReasons

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Bitcoin Trading Case Study #1: How I Made 35% Profit in 17 Days

How I Made 35% Profit in 17 Days by Trading Bitcoin

Over the past couple months, trading cryptocurrency has gone viral. After looking at some of the percentage gains on the biggest crypto exchanges, I decided to give trading a try. Before I really got started, I did some research to see if there are any tools for getting buy signals so I can make the most educated trades possible. I found a few tools that showed some promise so I have decided to conduct a series of case studies to see which ones are the best. These are the results of my first one.

Case Study Parameters

Exchange: Poloniex

Case Study Term: April 19th 2017 – April 29th 2017. Liquidated (sold) 100% of holdings on May 6th.

Entry Strategy: Buy .01 BTC every single time I receive a buy signal. I know this is very risky but if I am going to see if these buy alerts actually work, then I need to buy every single one.

Click Here for Buy Signals

Exit Strategy: For this particular case study, I decided to hold everything until I liquidate all of my positions after April 29th.

Total Buy Orders: I received a total of 97 buy signals and bought .01 BTC at each one for a total of .97 BTC invested. You can do the same thing but scale it down to .005 BTC for each buy signal so your total invested would only be .485 which is about $750 USD at today’s price.

Gross Return: 82/97 positions were profitable! My gross return on investment was 1.37 BTC on an initial investment of .97 BTC. That’s a gross profit of .4 BTC / 41% in 17 days!

Costs & Overhead: I paid .06 BTC for a 30 day membership to get the buy signals.

Net Profit: My gross profit of .4 BTC – .06 BTC for the buy signals = a net profit of .34 Bitcoins in 17 days! That’s a 35% profit in just 17 days! That’s an insane return on investment for such a short period of time but I think I can do better on my next study.

What’s even more exciting is that the price of bitcoin rose about 20% during my study ($1,326 USD to $1,597 USD on BitFinex) so not only did I turn .97 BTC into 1.34 BTC, but .97 BTC was worth about $1,286 at the beginning of my study and 1.34 BTC is currently worth about $2,139 so my USD percentage gain is 66%! …in 17 days!

Moving Forward

In just 17 days, I learned a lot about how crypto markets work and the massive upside opportunity for gain in short periods of time however I definitely left some money on the table with a number of my trades. That being said, here are a few things that I learned from this study.

A Progressive Exit Strategy: I will do some experimenting with various progressive exit strategies to see if I can catch some profits on coins that shoot up and come back down before the end of the study. One example from this study is NEOS. I bought .01 BTC worth of NEOS on April 19th at .00076692 and sold on May 6th for 0.00075999 which is a loss of about 1% but on May 3rd there was a spike up to .001250000 which would have been a 63% gain if I had managed to sell at least some above my purchase price. On my next study, I will try to find a way to cash in on some of those sporadic price hikes with some progressive sell orders.

I need a progressive exit strategy to catch gains like this massive spike.

Hold Currencies vs. Taking Loss: When I sold off all of my positions, I took a loss on 15 out of 97 positions. If I simply held all of them, there is still potential for gain with those currencies as the price of the crypto market continues to increase. Moving forward, I will hold all currencies that didn’t produce a profit instead of selling them off at a loss. Maybe I will lose money but I will only find out if I experiment.

Bitcoin Trading Case Study 41% Gross Gains

Thanks for taking the time to read my case study. If you think the bitcoin community would benefit from this article, please share it.

What tools do you use to make the most calculated trades? Let us know with a comment below or a tweet at @BitcoinReasons

Donate Bitcoin