Focused on education.

This page will be dedicated to teaching trading strategies and encouraging new traders.

I am not a financial advisor. This is my opinion, based on my first 6 months of crypto trading.

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"Investing in crypto" is trading fiat for any crypto, typically USD/BTC.

Anyone considering making their first crypto investment needs to understand that if you do not time your entry well, investing in crypto is likely to have very poor short-term results.

Anyone who truly times their entry "at the bottom" is either a very large trader with significant price control, or very lucky. Most successful investors "dollar-average" their entry, buying on dips and ending up with an entry point fairly close to the bottom. They do this based on long-term and overall market trends.

I am at best a mediocre trader. Trading is hard. A lot of very smart people have written very smart bots designed to be good at trading against new traders. A lot of very smart people have been trading crypto for years. For there to be winning traders, there must be losing traders. It all goes back to the most legendary crypto post ever. "...traders can only take your money if you sell." Don't be an "illusioned noob." Trading is a zero-sum game.

Different types of trading use different time-scales. Scalpers trade on minute candles, day traders and swing traders use 15min, 60min and 4hr timeframes, while the whales move the whole ocean on the daily and weekly candles.

It will likely require hundreds of hours to learning and simulated trading to consistently make a living day trading. A far better time/payoff ratio is achieved by investing longer term. Buy low, HODL, sell high. A naiive ICO investor expects they are getting the lowest price -initial. They are not. Most ICO projects had an extensive private sale and/or pre-ICO with preferential pricing to the initial public offering. The earlier, typically larger, investors are free to dump their tokens on the open market, taking large profits at the expense of the ICO investors. The smaller investors should have waited until the token hit the decentralized markets post-ICO and likely could've gotten a price 50% below ICO price, often even below pre-ICO price weeks after ICO because it typically takes months for tokens to get listed on major exchanges. Don't forget about bounty programs. Paid shills given free tokens to talk up the project on social media - they'll sell at any price, they just shill random projects all day.

An initial investment into crypto should only be made if you believe in the technology and are in it for the long term. At least 1 year. If you are reading this because BTC just had a huge price run up, don't buy now. That is FOMO. Wait. Buy the dip. Learn to trade in the meantime and time your entry well. Learn trends.

Most coins/tokens are “coupled” to bitcoin (BTC). The USD price of BTC affects the USD price of all other cryptocurrency assets. When bitcoin experiences a dramatic move, most coins and tokens follow suit. Many crypto coins and tokens trade in BTC pairs, not against USD. You might think that this would cause the opposing coin to move in opposition to BTC price action, but that is not typically the case. Far more commonly, when people lose faith in BTC, they lose faith in crypto in general and the entire industry cap exaggerates the downward moves of BTC. There is the additional risk that when BTC starts to look bullish, many crypto traders will shift from their altcoin holdings to ride up with BTC. This often causes other tokens price/BTC to decrease, minimizing their price/USD gains. Unsinkable assets like UNSK that are pegged to an asset that is “coupled” to BTC price, like XLM, will likely follow the market in this manner. Unsinkable assets pegged to USD may only experience the bull runs of BTC and crypto, depending on their PBiP buyback level proximity. They may even start to counter BTC crashes like some gold-backed crypto tokens have been known to do once investors realize their potential as a store of value.

Trading is a net-zero game on a zero-fee exchange and net-negative everywhere else. The house always wins, on every trade. Day traders only get bigger by eating naiive smaller traders who think they know what they're doing, or outmaneuvering their peers.

 

Every pair on every exchange trades with different eccentricities based on who else trades there. For example BTC/USD on the novice-accessible exchanges like Coinbase and Kraken experience significant stop-loss hunting. The whales periodically wipe out logical stop-loss points on obvious trendlines because a lot of novice-intermediate traders trade based on those trend lines, bollinger bands, MACD, RSI, and Stochastics.

 

The devil is in the details and with every pair having its own oddities most successful traders specialize and focus on trading only a few pairs of which they truly comprehend the trading characteristics and trends.

 

Since BTC/USD is so important to the entire crypto industry, it is a good place to learn charts and trends. It is a terrible place to start trading, if you plan to use a stop-loss. If you are a new trader, trading with real money, use a stop-loss. I definitely recommend you start with mock trading or trading very small amounts, like the minimum trade volume, usually $10-$20 on most exchanges, with a stop-loss. If you are going to trade with a stop-loss I suggest you start learning about altcoins, what coin(s) you want to trade, and where.

 

I do not recommend day trading to anyone.

It is not a good time/reward ratio.

Good day traders are smart and crypto-savvy. They could get a far superior reward/time ratio by researching undervalued coins/tokens and HODLing, swing trading, algo trading, and/or ICO flipping.

If you want to dedicate 500-1,000 hours to learning day trading, you could become consistently profitable at scalping, ICO flipping, and/or arbitrage. Hopefully you enjoy staring at screens for 10+ hours per day. You can typically make similar long-term profits HODLing. The notable exception is Mooncatching altcoins during BTC bullruns. Catchin' mooners that run up 30%-200% in a day is worth your time day trading.

The only types of trading I can recommend are:

  • HODL - buy low, hold, sell high. The entire crypto market is coupled to BTC.

  • Swing - I look for strong support and a potential swing of over 10%. BTC is easiest, since everything else is coupled anyways. I am comfortable taking 3-6% profit every week or two with a dollar cost averaged entry. When BTC approaches support and/or resistance you have to be ready for your altcoins to crash on either an up or down BTC breakout. When BTC is caught in a tight range or approaching confluence I like to scalp micro-cap altcoins because potential BTC breakouts make swing trading any crypto risky. 2-3 months ago I read the advice, "Set your limit-buy where you were going to put your sell stop-loss, and see how often it gets filled." It has helped my entries tremendously.

  • Algorithmic (algo) - any day, swing, scalp, whatever strategy can be executed more efficiently, precisely, without emotion, day and night with a trade bot.

Different exchanges offer different features appealing to different trading strategies. As of summer 2018, I have found Kraken easiest for swing trading. The types of orders they allow make it much easier than Binance to create orders that have a “take profit” and/or trailing stop-loss. I also use Cryptohopper bot with Binance, Poloniex, and HitBTC for trailing stop-loss swing trading. Cryptohopper is not good for high speed day trading due to the stop-loss implementation. Coinbase/GDAX, Poloniex and Bittrex have user-friendly UIs but have strict KYC policies. Poloniex and Kraken also offer margin trading and short selling. I also like services like Changelly, Airswap, and Shapeshift. Cryptopia is ok but has really low liquidity. A lot of pump and dump groups like to use Cryptopia for that reason. There are probably the most arbitrage opportunities with Cryptopia.

 

In my opinion, scalping is easiest on Binance and HitBTC because they have lots of noobs trying to trade micro market cap coins fresh off ICO. I haven't tried scalping much on Bittrex or Poloniex. I still need to check out KuCoin, Huobi, and OKEx. Whaleclub and Cobinhood have pretty good UIs. I steer clear of Bitmex and Bitfinex. I'm interested in Robinhood, Gemini, and eToro.

 

I have read of people having success with arbitrage, scalping, and ICO flipping on Ethereum dexs like idex and forkdelta with ICO assets that have not made it to major centralized exchanges yet. Exchanges are so overwhelmed with listing requests that it often takes over 2 months after ICO for tokens to get listed even if they pay a huge listing fee.

As I was writing this I realized that in the context of trading, the only real semantic use for "altcoin" emerged.

 

Warning: This is an under-testing hypothesis

In this context, altcoin means any coin that primarily trades in a BTC pair, is coupled to BTC, is not easily traded against USD, and cannot be shorted against USD. These types of coins/tokens often wildly exaggerate BTC price action, but are more likely to go against BTC's breakout than coins/tokens in more traditional financial markets with USD pairs, leverage, and short-selling.

Recommended Continued Reading:

Technical Papers

Learn Tokenomics

HODL Wallet

UNSK Token

This is an educational resource. I am not a financial advisor and this is not financial advice.

Investing in cryptocurrency is extremely risky. Do not invest more than you can afford to lose.

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