How much can a novice investor earn from trading? Part eight. 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

In part six of our publication, as a result of trading, we increased the deposit amount by about 30 US dollars. The account balance was 730.53 USD, and the initial amount with which we replenished the trading account was 700.01 USD. 

The income from the explosive growth was too small due to an error in determining the possible level of the daily maximum. 

This time we also strictly adhered to the trading plan described in article dated July 24, 2018. 

What happened before the start of trading?

The Bitcoin price consolidated under the resistance level of 23.6% fib (7767.00 USD). The forecast was that the price could overcome this resistance level and, having established a maximum at the point of 8028.00 USD, would roll back to the level of 7400.00 USD. 

What is the plan?

1. Buy Bitcoin on a breakout of the resistance level and sell at the maximum, around eight thousand.

2. When the price rolls back to the level of 7400.00 USD, buy again with the aim of further growth to the target level of 8200.00 USD. 

To track the breakout of resistance, go to the EXMO trading platform and analyze orders in the deal feed. The purchase price approaches 7780.00 USD, and sales take place at 7789.00 USD and the rate rises slightly. After a couple of minutes, the rate is already 7811 to 7820. This clearly indicates that the resistance line of 7767.00 USD has been overcome. 

Therefore, we quickly place a buy order at the rate of 7800.00 USD. 

Moreover, we no longer have enough money for 0.1 BTC, and we indicate the amount of 0.0935 BTC (at our rate, this is almost the entire amount of the deposit). The purchase commission will be 0.000187 BTC (1.45 USD). As a result of the transaction, we will have another 1 dollar and 23 cents left in our account. We send the order to the order book. 

Within a minute, the rate swung down and our transaction went through. The amount of 0.093313 BTC was credited to the account (this is minus exchange commissions). 

Keeping in mind the discipline in implementing the trading plan and taking into account the high rate of change in the rate, we immediately place an order to sell 0.093313 BTC at the rate of 8000.00

As a result of the sale of the entire deposit amount at the rate of eight thousand, we will receive 746.504 USD from which a commission of 1.493 USD will be withheld. 

Now we can only hope that the price of the BTC/USD pair will actually reach the level of eight thousand and our order will be executed. If we assume that the price does not reach the level of our order and falls like a stone into the area of 7400.00 USD, then the cost of our deposit in the amount of 0.093313 BTC will be 690.51 USD. Losses for this day would be 730.53 - 690.51 = 40.02 USD.

We continue to monitor... After some time, the Bitcoin price reached the level of eight thousand and our sell order was executed!

Immediately after this, the price rolled back to the area of 7900.00 USD, thus confirming the idea of a rollback. But further monitoring of the price convinced us that Bitcoin has no plans to decline to the level. 7400.00 USD. The growth continued until it reached the daily high at 8414.00 USD and only then slightly rolled back to the area of 8200.00 USD.

The next morning, the growth of the BTC/USD pair continued, setting a maximum at 8444.75 USD with a rollback to the area of 7400.00 USD, still not even there. smelled.

It is clear that the second part of our brilliant plan is postponed for some time (This is in the language of an optimist). In normal language, it sounds like this: “Our idea to make money on a pullback failed miserably.” You can, of course, add the word “yet,” but the perfect form of the verb in the past tense still does not change the general meaning of the sentence. 

Then let's summarize the bidding. 

At the beginning of the day, we had a balance of funds on the trading account in the amount of 730.53 USD. After completing the first part of the trading plan and crediting the account with the amount of 745.01 USD, the remaining balance is equal to746.24 USD. 

The profit for the day of trading is 15.71 USD (746.24 - 730.53)

The “TOTAL” profit, from the moment of depositing funds in the amount of 700.01 USD, reached 46.23 USD. 

Let's face it - not a lot! But nothing. The most important thing is that as a result of trading according to a forecast that was practically not completely fulfilled, we did not lose income, but on the contrary, we even earned a little! 

We continue to monitor the dynamics of cryptocurrency pairs and are looking for new entry points into the market!