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

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What is a Bitcoin Exchange?

What is a Bitcoin Exchange?
A Bitcoin Exchange or Digital Currency Exchange is a business that allows customers to trade digital currencies for other assets such as conventional fiat money or other digital currencies. Different bitcoin exchanges around the world are what sets the price of Bitcoin.

Types of Bitcoin Exchanges

Since bitcoin and cryptocurrencies are all completely digital there are a number of different types of bitcoin exchanges and many different ways to buy and sell bitcoin. Some exchanges are for buying bitcoin with cash while others are for buying with an ACH transfer directly from your bank account and others are exclusively for trading digital currencies similar to a forex market.

If you want some bitcoin to experiment with or to save for years down the road, you are likely going to use a bitcoin exchange that sells bitcoins directly to end users. Here are the most popular exchanges for getting bitcoins both for personal use or for speculation purposes. Some of these are for buying directly, while others are trading platforms for day trading bitcoin against other cryptocurrencies.

Coinbase

Based in San Francisco, California, Coinbase is the oldest and largest bitcoin exchange in the United States for business to consumer bitcoin sales. To purchase bitcoin from Coinbase, you will need to initiate an ACH transfer directly from your bank account. Coinbase charges a premium of 1% for both buy and sell orders.

ShapeShift

Based in Switzerland, ShapeShift is exclusively for trading bitcoin and other cryptocurrencies with other active users around the world. What I like (and probably most other users) the most about shapeshift is their focus on user privacy. No accounts or logins are required to trade on shapeshift. All you need is since these transactions are “on chain” you will need to pay a transaction fee for each transaction.

In my personal opinion, ShapeShift is probably the best cryptocurrency exchange in the world.

Bitcoin “ATMs” or BTMs

Bitcoin ATMs or “Bitcoin Teller Machines” are one of the easiest and quickest ways to purchase bitcoin with cash. I think that most of these terminals are one way terminals for buying bitcoin only but some of them are two-way machines so you can both buy and sell bitcoin. Bitcoin ATMs are incredibly convenient because of their speed but they often charge high fees. Premiums of 10-20% over spot price are very common. If you would like to buy some bitcoin using a BTM, you can use Coin ATM Radar to locate the nearest bitcoin ATM.

Local Bitcoins

Local Bitcoins is one of the oldest and most trusted place to buy and sell bitcoins. LBTC is a peer-to-peer marketplace for exchanging bitcoins with other bitcoin users. Payment mechanisms range from bank wire transfers to face to face meetings with cash payments. When large trading platforms go down or are shut down by governments, users usually resort to trading here on local bitcoins. Be careful on here since there are lots of scams and fraud.

Wall of Coins

Based in Sarasota, Florida, Wall of Coins is a great way to both buy and sell bitcoin with cash deposits into the bank accounts. The process usually takes about 30 minutes from when you start the trade to when you have your bitcoins but the premiums on here can get pretty steep. You can expect to pay about 20%+ over spot price for the convenience and privacy.

Paxful

Paxful is on of tne of the most prominent bitcoin exchanges in the world for selling at a premium and allowing the largest number of payment mechanisms, Paxful is a the premiums on here are the highest I have ever seen ranging from 20%+ to well over 100%. There are a lot of scammers and fraud on here so be careful when buying or selling from users without a lot of good ratings/reviews.

Bitcoin Trading Platforms

Not all bitcoin exchanges are for buying bitcoins to hold yourself. Some bitcoin exchanges are strictly for speculating on the price of bitcoin and other cryptocurrencies to make a profit. These sorts of trading platforms are almost always custodial (they control your bitcoins) and usually have much lower premiums than the consumer exchanges listed above. These fees are usually around .1% to .25% for each trade that you make. Let’s take a look at some of these exchanges around the world.

Poloniex

Based in Deleware, Poloniex has more currency pairs than any other custodial exchange in the world.

BitTrex

Based in Seattle Washington, BitTrex is one of the largest trading platforms in the US.

Kracken

Based in San Francisco, California, Kracken is a trading platform with roughly 30 different currency pairs. You can trade bitcoin against USD as well as a number of different cryptocurrency combinations.

BitFinex

BitFinex has the largest bitcoin volume of trades against the US Dollar so it is often the most trustworthy place to get the price of bitcoin from since it is the most stable on this exchange. Here on BitFinex, you can trade bitcoin against a few other cryptocurrencies and also USD.

Conclusion

That pretty much sums up all of the different types of bitcoin exchanges around the world. With all of these different ways to buy and sell bitcoin, there is no shortage of ways to turn a profit in the bitcoins space or just to hodl some of your own coins for years in the future. No matter what you plan on doing in the bitcoin space, there are a multitude of services there to help spread bitcoin across the globe.

What is a bitcoin term that you would like us to further define for you? Let us know with a comment below or tweet at @WhatIsBitcoin.

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