Which strategy is best for bitcoin? - page 3

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To increase your chances for success, you have to be systematic. The most promising strategy is to choose a trend-trading system for Bitcoin. It can be as simple as trading on the basis of a moving average. 
 
Shane:
No need to trade bitcoin, just buy & hold. You will out perform any other bitcoin trader long term.
Agree! No different than buying and holding Gold.
 
Chris70:

I have to admit that I don't trade BTCUSD, but the reasons why I don't go back to exactly the title of this thread, namely the question towards reasonable strategies (and the possibility to have an edge) in this market.

So here's why in my opinion crypto currencies are different:

1. They have no inherent value, meaning: all currencies basically are just numbers, but conventional currencies derive their inherent value from the fact that they are broadly accepted as payment; of course, they could be replaced by something else (yes, also by Bitcoin for example), but it is practically impossible that this happens from one day to the other, so as long as such changes take at least a little bit of time, conventional currency have a monopoly status in their economy, which is why they can't dissappear at least not tommorrow. Crypto currency on the other hand are really just numbers. Although they are sometimes accepted as payment, this usually is only an option and it is not without alternative (normal money could do the job just as fine). So although Bitcoin might be a great idea and maybe it is the future, the inherent value just isn't there YET.

2. They have no underlying fundamentals, meaning: BTC is largely independent of the economy both on a global and national scale (once you substract the USD influence in the BTCUSD pair). Even if trading happens on technicals entirely, the hypothetical assumption that price moves are not purely random still justifies the question if fundamentals that drive the price do exist. For BTCUSD the answer clearly is NO.

3. A handful of big players are able to manipulate the price, just because they own significant proportions of the whole cake, and nobody knows how their actions will affect tommorrow's BTCUSD price, so while there is no edge (at least not without illegal(?)  insider information), there is big risk involved (which of course is also true for the relationship between conventional currencies and Trump's next tweet...).

4. They rely entirely on sentiment, meaning: if true value, political events, economical processes and other fundamentals don't drive the price, then what does? Just the fact that people attribute conceived value to this currency. It's just goes back to people's belief and expectations. In on word: sentiment. So this is why I think that IF anybody is willing to trade BTCUSD, than some kind of sentiment analysis specifically on the crypto market is the only way to go (and NOT technical analysis in this case).

Other opinions?    [....sentiment?   ;-)  ]


Sounds like any other currency.

1. They have no inherent value
What is dollar or any other currency backed by? Trust. Same with bitcoin

2. They have no underlying fundamentals

USD and other fiat, don't have it either! All we know is they either decrease the speed of money printing or increase or decrease fundamentals. That's why traditional currencies keep losing its value. The USD and other fiat's supply will always rise compared to that of BTC. Atleast the supply of bitcoin is limited, so uptrend fundamental is very strong!

3. A handful of big players are able to manipulate the price
Just like centralbanks, large corporates and banks. right?


4.They rely entirely on sentiment

Dollar and any other currency are drive by sentiment as well. Just imagine if a war breaks out and you are holding that nation of the currency that is bombed to death. In that case, bitcoin/gold will rise because atleast its not controlled by government or central bank. Bitcoin on other hand will not lose all its value because even if its banned in one nation, it'll be traded in other. You get more flexibility.



Best strategy to trade bitcoin is just to HODL.

 

Hi if you have the data for bitcoin (or can export it from metatrader)

you can try  http://algostrategies.io/ upload your data and give it a shot.

Note i created this tool, its quite basic and free.

gl

 
patterns / fibonacci based
 

Price Action, Price Pattern, and Chart Pattern equally work well in cryptocurrency as well as in Forex market.

For example, you can use Support Resistance, Supply Demand Analysis, Fibonacci Analysis, Harmonic Pattern, Elliott Wave, X3 Chart pattern, Falling Wedge, Rising Wedge, Triangle, Breakout pattern, Reversal pattern,  Fractal Wave Theory and so on. 

So direct price analysis will work. 

Kind regards. 

 
Modified classic indicator such as RSI, Stochastic and Ichimoku.
 
Since bitcoin is a new market, i would test a simple breakout strategy. New markets are usually good for trend following or momentum trades.
 
niloufar mohamadi:

HI,Which strategy is best for BTCUSD?

I assume follow strict money management with 1:2.25  stop loss and take profit ratio , with trend line  and support and resistance 

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