The Death of Buy-and-Hold redux

2021年7月9日

As a follow-up to my previous article, “The Death of Buy-and-Hold”, Bitcoin in these last four months has demonstrated quite vividly to us the error of that outdated methodology, that Buy-and-Hold is truly dead and technical trading is superior to what is called “investing” today.

In the two month period from February, 2021 through April, Bitcoin enjoyed a meteoric rise, gaining 100% in value during that 60 day period. However, as they say, “The bigger they are, the harder they fall…“ And fall it did… Bitcoin gave back every penny in the following two months crashing back to its February levels.

The most profitable, reliable, and consistent trading systems available to the average investor, as I demonstrated in previous articles, are those systems based on "supply and demand" methodologies. We can’t fight the hedge funds. We can’t fight China. We can’t fight the “whales” of the crypto market.

… But we can follow their footprints as traders.

I backtested Bitcoin based on my own proprietary supply and demand methodology, but I would assume that any supply and demand system would achieve similar results because we are all chasing the same protagonist (or antagonist, depending on how you look at them).

The results: From January 1, 2021 through June 22, buying and and holding Bitcoin would’ve net a zero return for the investor! Following a supply and demand methodology, however, the casual trader who might work on the 4 hour charts, checking in on their account once or twice per day, I identified 11 trading opportunities which resulted in a net profit of 42 percent.

Why would the investor make zero and the trader make 42%? Buy-and-hold only works in one direction… When the product gains value. Supply and demand trading lets you profit rain or shine, by the day or by the hour, in good times and bad.

I bring this up, not ultimately as an "I told you so" but as an encouragement: Yes, indeed, it is possible to pull a reliable, steady income from the markets, from the cryptos, from the indexes, from the commodities, rain or shine, week after week, once you learn to "see the money flow" and follow the trail as a trader.

One does not have to have their livelihoods be subject to the whims of the economy, of policies imposed by public officials, of Tweets from CEOs, from natural disasters, from supply chain disruptions, the whims of totalitarian nations, nor an employer, employees, or customers.

Most importantly, Supply and Demand trading protects us from the large financial institutions who regularly engage in Market Manipulation, whose tactics include fear and greed news cycles, whose analysts and "experts" foment 'sentiment' among their viewing audience, whose priority is to broadcast information that will financially benefit themselves, and not their viewers.

Trade well!