How much can a novice investor earn from trading? Part 37. Trading (continued)

We continue the series of publications about trading in order to understand in practice how much a novice investor can earn using only the forecasts published on our website. To understand how useful they are, we decided to conduct an experiment and simulate a situation in which a person who only knows about trading that he needs to “buy cheaper and sell more expensive” tries to earn additional income in his free time from work by investing part of his funds in cryptocurrency trading.

For the first time in the last month, the price of Bitcoin began to show good recovery dynamics. Therefore, we decided to analyze growth opportunities in more detail and determine the entry point into the market.

Judging by today’s ForkNews forecasts, the price of BTC may recover to 4250.00 USD. Considering the difference in the price of BTC on Bitstamp and EXMO, we decided to build a Fibonacci grid directly on the four-hour chart of the EXMO exchange and conduct a separate analysis of the magnitude of a possible correction.   

We took the mark of 6640.00 USD as the maximum, this is the highest price value during the long period of consolidation before the November sales. The zero level can be tied to the annual minimum, which was set by the BTC price on November 25 at the point of 3700.00 USD. 

Given that the recovery usually takes place up to 50% or 61.8% of the Fibonacci level, we can assume that there is a possibility of testing the corresponding level in the area of ​​5500.00 USD. True, trading against the trend is quite a risky game, especially since there is no certainty that the 3700.00 USD mark is the bottom of the global decline. After recovery, the price may fall sharply and update the minimum. Taking into account the degree of risk, we will exit the position at 50% fib, which corresponds to 5170.00 USD.  

We managed to open a position immediately after the release of the forecast block on the ForkNews website, almost at current prices. We placed an order to purchase our standard volume of 0.1002004 BTC on the EXMO exchange at the rate of 4100.00 USD. It came true almost instantly. We note the expense: 410.82 USD. We received 0.1 BTC into our account (0.002004 BTC is the EXMO commission for the purchase). The next step is a sell order. Let’s not be greedy and round the target level to a “nice figure” of 5100.00 USD. We submitted a sell order for 0.1 BTC at the rate of 5100.00 USD. If our calculations are correct, then if we grow to the levels we have indicated, we can earn approximately $100. 

In addition, the specifics of the cryptocurrency market should be taken into account. During the November sales, the price fell without any significant correction. And only now the bears have stopped mercilessly putting pressure on the market and have given prices the opportunity to recover. Although we understand that the pressure may resume at any moment.. Therefore, it is necessary to constantly monitor the price of BTC and monitor the dynamics of passing all the nearest Fibonacci levels. If there is a suspicion of a reversal from the 23.6% or 38.2% fib level, then it is necessary to adequately respond to the dynamics of the breakout or reversal. We allow the profit to “drawdown” to the break-even level of 4100.00 USD. Only when BTC declines to the price area of ​​4100.00 USD do we need to close the position and enter fiat.

The choice is made! The orders are placed! Let's be patient! When can we expect a re-test of the level of 5100.00 on the EXMO exchange? We believe that the price may recover to this area tomorrow or by the end of the working week. 

In our next issue, which will be released on Sunday, we will summarize and analyze the results of the calculations.