Bitcoin - Forex Combo Strategy Part 5

It has been twelve months now since I started to execute my Bitcoin - Forex Combo Strategy. I entered the cryptocurrency market more by accident than anything else. On October 12th 2017 I received 2.5 Bitcoins valued at $5,000 each for some freelance work I have completed for a technology firm. It was right at the time when Bitcoin exploded to the upside and the bubble reached its full potential. A lot of digital millionaires were printed on paper, but as Bitcoin came crashing down early 2018 those millionaires quickly left this exclusive club. You can read more about how I got started at “Bitcoin - Forex Combo Strategy Part 1”.

Bitcoin and Ethereum led to a surge in new cryptocurrencies which were created and are being created now, although at a much smaller pace after global regulators clamped down on the sector. There are over 1,000 cryptocurrencies available now and I have met many traders and those who think to get involved who are chasing the type of gain Bitcoin delivered. Sure, it would have been great to own Bitcoin when it was worth a few pennies and then cash out near $20,000. Looking back one always knows what to do and how make millions. That is not how reality works.

You need to work in the present with what is in front of you and many fail at doing so. A lot of people just wish to invest a little money where it is popular on social media and then wait as it grows. That’s a great approach for disaster. Those who are willing to do the work and are not lazy, can make a lot of money from cryptocurrencies right now. It is almost impossible to do so through a buy-and hold strategy. You need to be active and smart, if I would have simply held on to my initial 2.5 Bitcoins I would have only increased my assets from $12,500 to $15,575 as I write this post.

I created my strategy as I saw great potential for earning money and I combined it with forex trading which allowed me to grow my $12,500 to over $1,000,000 in twelve months. A great part of that was the immense volatility in Bitcoin and the price swings which were created. I believe they are behind us now so those who will follow my strategy will have to be a bit more patient to grow their assets. The other great contributor was PaxForex and their expert analysts as well as the ease through which I was able to make deposits and withdrawals using Bitcoin.

Last week I mentioned that I am adding two long-term positions to my overall portfolio. You can refresh your memory at Bitcoin - Forex Combo Strategy Part 4” where I mentioned my purchase of 1,000 Ethers at $190. This holding is currently worth $192,200. I think there is plenty of upside potential in Ethereum which is why I am holding this one. Price action moves in a very tight range and trading in-and-out of my position for small gains is something I am planning on in the future, but not manually. I am looking into creating an EA for Ethereum in the near future.

I have also taken a more permanent long position in Gold when I added 100 lots at $1,195.00. This position is currently worth about $354,679. I think we will enter a rather turbulent time period over the next 12-36 month and think Gold has the potential to rally above $1,500. This precious metal has been under pressure as it is priced in US Dollars and is stuck with an inverse relationship to the greenback. This means that as the US Dollar increases, the price of Gold contracts. With the US Dollar at multi-year highs, Gold was able to rally over the past month as the inverse relationship is being pushed aside and replaced by its safe haven status.

I ended my previous post with one open position in my portfolio. As I am mixing it up with short and long term positions,this will become rather normal. Focusing too much money in one approach would expose my too a risk which I am not willing to accept. On October 26th 2018 my open GBPJPY short position of 30 lots which I took at 148.500 was closed as my take profit of 143.000 was triggered according to the original trading recommendation which can be found at GBPJPY Fundamental Analysis – September 28th 2018. This traded yielded me 550 pips or $146,613 in profits. The chart below shows my entry as well as exit levels for this trade.

I took a short position in the USDJPY on October 25th 2018 at 112.500 according to the original recommendation which you can find at USDJPY Fundamental Analysis – October 25th 2018. The total size of my position is 40 lots with a margin requirement of $8,000 and a pip value of $355.43. I do currently not follow the stop loss level indicated in the recommendation and this trade is currently open in my account.

The reason why I ignore the stop loss level is because I think the Japanese Yen will strengthen. Since the US Dollar has been advancing much more than the current environment supports, there is a potential for the USDJPY to extend its advance until it forms a double top formation before contracting. Therefore I remain committed to this position for the time being and open to take another short position if a double top appears. The below image shows my entry level.

I also added a long position in the GBPUSD at 1.2800, buying 40 lots. My margin requirement was $10,329 and each pip is worth $400.00. You can get the original trade set-up at GBPUSD Fundamental Analysis – October 29th 2018. The British Pound has been pushed lower as Brexit negotiation remain stuck while time is running out. A positive divergence in the CCI has formed in extreme oversold conditions which makes me feel confident that we could see a short-covering rally in this currency pair. You can see my trade in the image below.

Yesterday, on October 30th 2018, I added a long position in the EURCHF, 40 lots at 1.1385. The margin requirement was $9,124 and each pips is worth $401.23. I went long the Euro despite the recent economic news which suggests a steeper slowdown as previously expected. I think this currency pair can give us an easy 100 pips to the upside and you can read the original recommendation at EURCHF Fundamental Analysis – October 30th 2018. The chart below shows my entry into this trade.

as of today, October 31st 2018 my portfolio consists of the following holdings: I own 1,000 Ether worth $192,200 and 100 lots of Gold worth $354,679 as my long-term assets for a total value of $546,879. I also have three open forex trades, one short position in the USDJPY, one long position in the GBPUSD and one long position in the EURCHF. They currently carry a floating loss of $28,434 in the USDJPY, a floating loss of $18,000 in the GBPUSF and a floating profit of $8,025 in the EURCHF. In addition I currently sit on $565,899 in cash as I evaluate where to best invest them.

My total portfolio is currently worth $1,101,823, down almost $85,000 from last week as Gold prices retreated. I am very likely to increase my lot sizes moving forward as I have been doing over the past year, but I will also seek trading opportunities in Silver which will diversify my precious metal holdings while I am also exploring short-term positions in a few blue chip stocks. PaxForex offers a complete package which allows me to grow my revenue stream as my balance increases. You may start with forex only, but after you accumulate capital it is important to take advantage of more opportunities.