How can I ride the early stage of a downtrend? What are the key points of a method for trading?
Hello everyone, the downtrend! The type of guy who wants to profit in a bear market@xi10jun1is here.
Bitcoin has somehow ridden up into the 130,000 yen range. Its price movement is quite eerie...
Where did the hard fork issue go? It continues to trend upward, wobbling along.
This week’s results (March 31, 2017 to April 6, 2017)
First, as usual, here are the results. I’ll present gains and losses first.
- Last week (up to March 31, 2017) assets: ¥85,010
- This week (up to April 6, 2017) assets: ¥88,254
- Change: +¥3,244
Again this week, new highs! Starting from 50,000 yen, the back of 100,000 yen is finally in sight.
This time I profited a lot from the decline, but because my downtrend stance was too strong, I also incurred some unnecessary losses here and there... It’s not that you can keep making money all the time, you know.
Also, there are times when the price doesn’t move while I’m watching, which is frustrating for Bitcoin, isn’t it?
I want to ride the initial downtrend!
In the investment world there are many adages, and among them a very good one for market depiction is the saying “100 days up, 3 days down.” Bitcoin, with its January crash and the early March dip, has charts close to that pattern this year.
That said, in Bitcoin, roughly one-third of the time a pattern of “up 33 days, down 1 day” would be ideal.
In any case, it’s easier to make substantial profits in a down market than in an up market within a relatively short period.
Soif you ride the initial downtrend, that is, take a short position at the start of the decline, you can make significant profits in a short period.
Of course, it’s not easy to do... So this time, let’s explore “how to ride the initial downtrend?”
Is it hard to profit from a decline?
For example, a pattern like this: a rapid rally on the 1-hour chart followed by a corrective drop.
As I mentioned in a previous column, on the Heikin-Ashi chart, when the bullish candles shrink after a rally, it signals a reversal.
Even so, at this point you don’t know the timing of the sell signal.
Next is the 30-minute chart.
There are several doji candles, followed by a sharp drop. Not just Bitcoin—up moves, consolidation, followed by up or down, is the basic market movement.
From here, how do we find sell signals?
Finally, the 15-minute chart.
Under the red frame, there is a bullish candle (green) with a tail extending downward.
In a normal Heikin-Ashi, the tails only extend in the direction of the trend. So when you see tails like that while the candlestick remains bullish, it suggests a signal of market reversal.
Free summary: You can get a rough sense by watching price movement, but...
As written on the 15-minute chart, this is only a rough impression.
If you measure cost performance, the most effective view is simply based on win rate and profitability. In that sense, it’s best to observe with the smallest position and only scale up slightly when necessary.
Now, there is also a 5-minute chart analysis after this, but that is in the paid section. I will tighten the points further!
Also, I’m sorry for the late update of this column. While editing, I forgot to save and half of the data disappeared... Regular profit-taking and saving data is important!
End corner 1: Shopping with Bitcoin!
In fact, the overseas e-commerce site “FANCY” lets you buy products with Bitcoin! It does incur some shipping, but there are stylish items you won’t see in Japan!
I’ve summarized how to use FANCY on this blog, so please refer to it.
- →FANCY (Fancy) account creation, registration, and how to purchase explained! | Investor Jun of the Yotori generation
- →How to purchase items on FANCY with Bitcoin (BTC) | Investor Jun of the Yotori generation
End corner 2: How should BTC futures trading (BTCFX) be filed for tax purposes?
You must also report BTCFX profits for tax purposes! I’ve written a blog post after confirming with the tax office by phone, so please refer to it.
Tax offices and tax accountants may have different views. Also, laws can change, so the method of filing may change. Before filing, be sure to check with your nearest tax office or a tax professional.
Note: The free content ends here. The following are detailed analyses and future outlooks, so they are paid content. If you want to read more, or if you’d like to support me with a tip, I’d be very grateful! Please continue to support me!
