Bitcoin Slumps, What Now?


photo credit: Getty

Getty

The way to trade booms and bubbles is to put a box around volatility and sell when the price breaks down through that volatility. It works a good 80% of the time. These are the kind of odds you want when big profits are at stake.

Sometimes the price can break even the most generous volatility range and then bounce up and race away again. That’s tough luck and all part of the life of a trader. At least you get to keep a lot of your profits.

I’ve drawn a few examples of this box for bitcoin in articles here and this is a  recent example:

A recent projection of the bitcoin price breakout

Credit: ADVFN

You would be doing okay if you bailed out when this box was broken. However, if you are a bull and you want to know “what next,” what is the picture?

Unfortunately, you have to put your box here:

Boxing the volatility of the current bitcoin chart

Credit: ADVFN



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