It is my belief that the price of Bitcoin will rise during the week leading up to the B2X (Bitcoin Segwit2X hard fork) scheduled for block 494,784 estimated to take place on November 16th. Due to the general public wishing to receive there free B2X coins. Because of this belief during the week leading up to the 16th I will build into a long BTC (Bitcoin) position using a pyramiding technique.
For arguments sake lets say I have £1,000 to use for this trading setup. I will enter a long BTC trade with a position size of £2.50 and a stop loss of 400 pips. Every time the price rises by 100 pips I will move my stop towards the trade until it reaches the break even point. I will then open another long trade with a position size of £2.00 and a stop loss at the previous positions opening level and using the same trailing stop strategy. At the next congestion area I will open another long trade with a position size of £1.50. If Bitcoin continues to rise throughout the week I will continue this process and open long positions with each one having a slighter smaller position size than the previous position until I hit my spread betting platforms minimum position size (£1.00 if using IG), hence Pyramiding into a position.
If the above has been successful and Bitcoin has risen during the week. On the 15th November (or the day before my spread betting platform freeze new Bitcoin long positions). I risk all my paper profits and I will double down on all open positions. In effect gambling house money. This is not a good trading practise but I feel this is an opportunity that does not come around too often so I am happy to take the gamble. In summary if I have a total position size of say £7.00 in long BTC trades, I will open an additional long position with a position size of £7.00 and a stop loss at my combined aggregated position of the previous open BTC trades, so in effect if the price goes against me I will just lose the paper profit and not the equity.
At this stage I will have an aggregated long position size of £14.00 per pip. I will then monitor the trade and wait for the Hard fork to happen. Once my spread betting platform has opened an equivalent position in B2X I will immediately close out of all my BTC positions, this will limit any potential risk in the price of BTC dropping and will also lock in any BTC profit that was gained on the way up.
The B2X trades at this point will be showing on the spread betting platform as opened at £0.01 with an aggregated position size of £14.00. However the trades will not be active until the major crypto exchanges (Coinbase, Bitfinex, etc.) start to trade B2X, this could be possibly 24-48hrs after the hard fork to prevent double spending, etc. Once the exchanges start trading the spread betting platform will pull the prices in and the open B2X trades will then be active, when this happens I will immediately close out of all the open B2X trades.
To provide an example of the estimated profit, If the above all pans out in my favour. B2X is currently valued at just £974 per coin (price taken from B2X Futures on Bitfinex) then my profit would be 14 x 974 = £13,636. Plus any profit secured from the original BTC pyramid position. That's a 13.6:1 risk reward ratio.
I will then bank 80% of the total profit gained from this trade and place 20% on a short BTC position. The stop loss would be just above the most recent BTC ATH (all time high) and the profit limit would be once there was a break of the bear channel on the hourly chart.
This will be the trade that I will be executing over the next week or so. Follow this Telegram group for my updates https://t.me/joinchat/FZ743A_pyG-32mLTitCLSQ
Disclaimer
All references above form an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.