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