"There is nothing new in ... speculation. What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly build into human nature, that always gets in the way of human intelligence. Of this I am sure." -Jesse Livermore

6-10-2014 Flag trade setup on bitcoin, buy on breakout

Hello Bitcoiners:

This post will be a a trade setup rather than an educational article. I try to switch it up a little. I went over how to trade a bull flag in the last article. If you are unfamiliar, you can learn about bull flags there.

We have a trade setup on the daily bitcoin chart. Take a look at the chart below.

Bitcoin flag setup:

Type: Flag.

Confirmation: Breakout above 680 to confirm.

Bitcoin bull flag trading pattern; Recognition and buy setup

Today, I will be covering a continuation trading pattern called a flag. Flag can be bullish and bearish. I will cover only bullish patterns, it works just as well for bear flags as well. Concept explained and history of this pattern will be covered at the end.

What is a flag?

The pattern is exactly how it sounds; it looks like a flag waving. The pole part of the flag is the fast price rise and the flag itself is the consolidation period. (Look at my chart for reference). A bull flag is a continuation pattern where the price stalls and consolidates briefly before continuing to rise further.

Starting a trading system? Here is some basic backtested bitcoin statistics.

Fellow bitcoiners:

Today, I will be covering a post on basic statistics about bitcoin performance. Historical bitcoin price is a good starting point for building your own system. It’s kind of like knowing the historical return for the stock market (8%). The expectation is that your system need to outperform this number. So today, I will be covering a few statistics including percentage of green/red day, average daily gain for green/red. More advanced stuff, expectancy, profit/loss ratio and so forth.

Backtest specs: