Should you buy Bitcoin if it drops?

Hello everyone, Short Position! Finally, I made a decent profit from selling@xi10jun1.

Bitcoin has broken through 80,000 yen last week, and since then has continued to stay around the 80,000 yen level.

In the midst of that, I finally made a profit from a short position!

This Week's Performance (2016-11-19 to 2016-11-25)

First, as usual, the results.

I finally made a big profit from selling! This is what I wanted to do, and I had been taking short positions all along….

That said, overall there are more losses than profits…

I need to do it more strategically. Even though I’m calling it losses, my funds are decreasing as well.

Bitcoin Market on 2016-11-19 (Chart Time: 1D)

I was convinced the top was around 83,000 yen on the 18th, but it rose further, which was disappointing…

Strongness is good, but selling is scary too, so if I have a buy position, I have to proceed steadily.

Bitcoin Market on 2016-11-19 (Chart Time: 1H)

I pulled up the 1-hour chart for the same day.

The area indicated by the arrow is what you might call a “pullback.”

But if you ask whether this can be seen as a pullback, it’s rather difficult. Since it has crossed the B-band line, a short-term rebound could be expected, but it looks like I might end up selling at the rebound.

In the end, it rose afterward, so apparently there was little room on the upside.

Bitcoin Market on 2016-11-20 (Chart Time: 1H)

And temporarily, it even reached 85,000 yen.

Sell orders were noticeable, but when it drops, it rises as well, so unnecessary losses accumulated.

My bad habit of being too bearish, but looking at this, I felt like trying selling again, and entered another short position.

Bitcoin Market on 2016-11-21 (Chart Time: 1H)

And on the 21st, there was a dramatic drop!

From 82,193 yen shorted to 79,000 yen closed, and I finally got a substantial profit from selling!

However, around the time it returned to 80,000 yen, buying seemed strong. I opened several more short positions afterward, but they all hit the stop loss…

Bitcoin Market on 2016-11-22 (Chart Time: 1H)

Prices moved slowly, so I thought again to short, and placed a few more shorts here as well.

In hindsight, it seems the pattern was “buy the dip” here as well.

Bitcoin Market on 2016-11-23 (Chart Time: 1H)

And, it ended up back to where it was!

The price shot up to 85,000 yen, and the short positions were stopped out easily…

Bitcoin Market on 2016-11-24 (Chart Time: 1H)

After that, declines continued but did not form a trend, and the strategy remained “buy on the dip.”

Nevertheless, around 85,000 yen, resistance began to show again, and selling rallies around here also became noticeable.

Free Summary: “Buy on the Dip” How Long Is It Effective?

This “buy on the dip” is not always effective indefinitely.

That said, it is essentially a contrarian strategy. For currencies that drop quickly, I’m not sure whether it’s a good strategy to employ.

Using indicators like the B-band and RSI as clues, you may need to steadily profit from it.

Closing Corner: Try Shopping with Bitcoin!

Actually, on overseas e-commerce site “FANCY,” you can purchase products using Bitcoin! It costs a bit for shipping, but there are stylish items you won't find in Japan!

For how to use FANCY, I’ve written a guide on this blog, so please refer here.

→FANCY (Fancy) account creation, registration, settings, and how to buy products explained! | Investor Jun of the Yutori generation
→How to purchase (pay with) Bitcoin for items on FANCY | Investor Jun of the Yutori generation

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