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Profitable day trading Bitcoin futures following continuous bullish (bearish) candlesticks

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  • Min-Yuh Day
  • Paoyu Huang
  • Yirung Cheng
  • Yin-Tzu Lin
  • Yensen Ni

Abstract

We explore the profitability of day trading Bitcoin futures following diverse consecutive 3 bullish (bearish) one-minute candlesticks and then adopt stop-loss or take-profit only as exits. We reveal that different from our cognition, adopting take-profit strategies would have a notable average positive profit per trade (APPT), which is robust by employing the upward trend out-of-sample data different from the downward trend in-sample data. We infer that such impressive findings might result from temporary rising (falling) prices likely manipulated for appealing to investors pursuing long (short) positions. As a result, investors may realize profit instead of suffering loss frequently by adopting take-profit exits since mean reversion might often occur after such manipulation. Moreover, we argue that stop-loss might be redundant for day trading such futures because stop-loss seems enclosed in the mechanism of day trading.

Suggested Citation

  • Min-Yuh Day & Paoyu Huang & Yirung Cheng & Yin-Tzu Lin & Yensen Ni, 2022. "Profitable day trading Bitcoin futures following continuous bullish (bearish) candlesticks," Applied Economics Letters, Taylor & Francis Journals, vol. 29(10), pages 947-954, June.
    • Handle: RePEc:taf:apeclt:v:29:y:2022:i:10:p:947-954
    DOI: 10.1080/13504851.2021.1899115
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