Profitable Day Trading Bitcoin Futures Following Continuous Bullish (Bearish) Candlesticks

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Title:	Profitable Day Trading Bitcoin Futures Following Continuous Bullish (Bearish) Candlesticks
Authors:	Min-Yuh Day;Paoyu Huang;Yirung Cheng;Yin-Tzu Lin;Yensen Ni
Keywords:	Bitcoin futures;take-profit;stop-loss;candlestick technical trading;investing strategies
Date:	2021-03-16
Issue Date:	2021-04-21 12:11:40 (UTC+8)
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.
Relation:	Applied Economic Letters 29 (10), p.947-954
DOI:	10.1080/13504851.2021.1899115
Appears in Collections:	[Department of Management Sciences] Journal Article

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