[Great loss] Bitcoin keeps hitting new highs! And then great losses... A new type of algorithm appears?
Hello everyone, a new high! My own assets could not reach a new high@xi10jun1and so on.
BTCFX is breaking to new highs in no time, isn’t it...?
As it rises at a high pace, the drop has become a very scary danger level.
*This column can be read up to halfway for free, a design that’s like a lump of conscience. Of course, if you read up to the paid portion (updated weekly for 400 yen per month, so about 80–100 yen per column), it would be very encouraging!
This week’s results (April 28, 2017 to May 4, 2017)
First, as usual, the results. I’ll announce the changes first.
- Last week (through April 27, 2017) assets: 99,179 yen
- This week (through May 4, 2017) assets: 97,928 yen
- Change: -1,251 yen
Last week I reached 100,000 yen, and at the start of the 3rd, it was in the 103,000–104,000 yen range, but during the 4th I incurred about a 5,000 yen loss, dropping from the 100,000 yen level...
Behind the Bitcoin price hitting new highs, all of the sell positions ended in losses, a miserable result.
So, this column will consider several possible causes for this.
Cause of loss 1: overreliance on a contrary-investment method using Bollinger Bands
One of the causes was overreliance on a contrarian investment method using Bollinger Bands, which I often used.
Blue text indicates losses, green text indicates take-profits.
Normally, when price moves outside the Bollinger Bands, a rebound due to the correction occurs.
However, in cases like this high-speed rise, such a rebound doesn’t occur as expected. It isn’t that there is no rebound at all, but the rebound is small, so the waiting time to target a sufficient drop becomes long. As a result, a next uptick occurs, causing losses on positions that had been waiting.
In this case, there were additional stop-outs three or four times besides this image, making the realized loss large. Overreliance on the Bollinger Band contrarian method prevented me from gauging the market’s strength.
Cause of loss 2: exceeding my own daily loss limit
I exceeded the daily loss limit I had set.
After assets surpassed 100,000 yen, the limit shrank to 3,000 yen, but before that I had a rule to keep daily losses under 5,000 yen. However, when the situation arose, that rule wasn’t in my mind.
Completely due to my lack of experience and weak will...
Cause of loss 3: chart malfunction on bitFlyer
The main chart tool I use on bitFlyer sometimes stops displaying candles after I access Lightning for a while.
Because of this, I placed orders based on faulty price assumptions, and only later realized the issue—by then the damage was done... about 1,200 yen loss.
Of course this was my own confirmation error, but charts that don’t display normally are troublesome. Since tools from various exchanges may fail to operate properly, you have to anticipate that as well.
Free takeaway: don’t push through in strange markets
That sense that something is off is important, after all.
In abnormal markets, don’t push through. I learned this deeply. While acknowledging the losses, I’ll once again aim to recover into the 100,000-yen range!
Now, for this paid content, I will note a new type of algorithm found in the market.
Ending segment 1: shopping with Bitcoin!
Actually, on overseas e-commerce site “FANCY,” you can buy goods using Bitcoin! It comes with some shipping costs, but there are stylish items you won’t see in Japan.
For how to use FANCY, please refer to this blog post.
- →Explanation of creating and registering a FANCY account, settings, and flow for purchasing products! | Investor Jun of the Yutori generation
- →How to buy (settle) FANCY items with Bitcoin | Investor Jun of the Yutori generation
Ending segment 2: How should Bitcoin margin trading (BTCFX) be taxed?
You must report BTCFX gains for tax! I’ve written a blog post after confirming this by phone with the tax office, so please refer to it.
Note that opinions may differ among the tax office and tax professionals. Laws can change, affecting how you file. Before filing, check with your nearest tax office or a tax professional.
Note: the free portion ends here. The remainder covers detailed analysis and future outlook, so it is paid content. If you’d like to read more, or if you’d like to support me with tips, I’d be very grateful! Thank you for your ongoing support!
