The Ultimate Primer on trading BTC, ETH, and crypto ALT coins you can find.

Latest Update: April 5th, 2022 - Created by RexDog (xKaVaLiS)

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READ EVERYTHING BEFORE TOC FIRST!

I am not a licensed financial advisor in any way shape or form. This document and everything I say about trading, cryptocurrencies, money, life or anything in general should not be taken as financial advice. Everything I say or write is my opinion. Make sure you do your own research and base all your decisions on what you find yourself. I’m simply stating opinions. I am not giving financial advice, trade advice, or any financial advice in any way whatsoever. Everything I write or state is an opinion. I AM NOT A FINANCIAL ADVISOR.

This will be a living breathing document and will update it from time to time. Reading this document for a new investor will probably feel like drinking from 2 fire hoses. I’ve tried to make this as concise and as complete to get someone up and running as quick as possible.

Also, assume all links are some form of affiliate link. At this time I’m offering this document for free (and updates) so the little income I might make from you purchasing helps me justify spending time away from trading, etc

Join our DISCORD group to get updates, trades, questions, etc:

https://discord.gg/WgjsxVz

Also, I started doing YouTube Tutorials, check them out and subscribe:

https://www.youtube.com/channel/UCckbxxwOcJuH6pd2GiwZdAg?view_as=subscriber

Follow on Twitter: https://twitter.com/xkavalis

One final thing before we get started…

I write like I speak. That’s my writing style-- for some that might be jarring. If you are an English major I’m sure you’ll cringe in my constant use of various phrases, commas, ellipses, and well general sentence formation. I have a dry sense of humor so sometimes the sarcasm is deep up in here (although I’ve tried to keep that to a minimum-- much like the fluctuations in Bitcoin prices). At this time I do not have a complaint department, so let’s get started...

The Purpose of this Document

What you’ll find in this document is a collection of the top ideas, resources and things I”ve learned trading crypto’s for almost a year.

Yeah, I do this, like full time. It’s pretty much now my main source of income (although I still own a SAAS business). I’m also using crypto as one of my build wealth strategies (more on that to come). Much of what you find here are thoughts and ideas borrowed from other people (where I can I will cite source if I remember, if you find something in here that was lifted word for word it wasn’t intentional, I simply forgot the source or it was my error not to add sourcing).

All of this is a mash up of me spending hours upon hours learning this market, watching charts, losing money (not so much anymore), making money, and finding a system(s) that work for me.

Update Tuesday, April 5th, 2022:

This is going to sound arrogant to some. I consider myself an Elite Trader. I now trade futures and that is my bread and butter so to say. I trade at size in futures and trade (NQ, CL, ES, Russel, Gold). I share day in and day out in my Discord group my live NQ trades and now I’m back to actively trading crypto futures. You can join discord and see this unfold live or check out my YouTube. I have trading sessions posted there.

I also trade FOREX on a long swing basis (in trades for weeks). I trade equities in a long swing only fashion. I have 2 signals I’ve created (based on my trading system) in a tool called Stockfetcher. Those scans provide 17-30 good trades a day. I’m in the process of having a developer automate these strategies as my first foray into trading automation.

I’m what you’d consider an always in trader. If the market is moving I’m in a position, up or down. I trade momentum in the above listed markets. Well I don’t trade short in equities. That’s a specialised skill and in my opinion is a waste of opportunity cost and capital. I’ll expand on this argument in a YouTube video but if you can trade both sides of the market then futures is where you should allocate your capital. It’s guaranteed to move every single day.

At this time I do trade spot crypto and do a fair amount of staking. My spot trades are long swings based on how the crypto market operates. I trade the 4D chart, find levels and trade the rules of my trades system that I call the RexDog Trade System.

On that name. I thought long and hard if I should have a more serious name for something I take immensely searious and is not only a passion but a calling. Something like the Strategic Momentum Trade System just made me throw up a bit in my mouth. I try to bring levity to things I do and using my dog Rex as my avatar and naming the trading system after him just seemed like the perfect fit.

In my training you’ll find my full system explained and I prompt you to take my system and make it your own. As of this writing I’m working on the next section that will have an even bigger impact than what’s in my training now. The last 6 months I’ve been creating the mindset and psychology section of my trading. The effort I’ve gone thru to make this more than just discussing trading challenges and here’s some ideas how to overcome them can’t be overstated. I’ve hired a researcher. Also an editor for the what will most likely be the book.  I have probably 200 books as reference that go well beyond trading books.

My mindset and psychology section of my training is based on science and how the human body and mind works. How we properly adopt negative and positive habits. How to break those habits and how to solve the top mental and physical.

My current training is unique compared to what is out there. I can say this because to this day I still join memberships and buy training and books. My technical analysis and full system training is designed to massively reduce the time it will take you to master price action and a system that actually works by reverse engineering momentum and trading around that.

But here’s what I learned. I can give you the super car, that can go 250 around the track. But if you can’t mentally and physically keep up at that speed you’re going to hit the wall.

So this next section of my training solves this. By addressing the mental, psychological, and physical negative and positive habits you have that are keeping you from being a successful trader.

If you are interested in the training join Discord and DM me. You also get access to all my private indicators and anything else I add to my system. Something big might be coming in that realm.

Finally, the purpose of this document is not to convince you of anything—it’s simply my thoughts on trading crypto currencies successfully. In this document I do try to justify things to make a point but I’m only going to do that so far—my intention with this document is to provide someone who I train with the most knowledge without having to repeat myself. That way when I do one on one coaching or they enter my training they have a baseline of understanding of this market. Then we can get to the real stuff to help them start being traders who have the ability to pull capital from this market.

An Elite Trader

On final note. My goal with my training and everything I do is to create Elite Traders. Or help them get there as best as I can. I shared this other day in Discord and one person responded:

“I  don't even want to be an elite trader per se, just to be comfortable and sure in my positions with regular wins”

Here is my since edited response:

“Ah, that is an elite trader. Look at the numbers. 93% (if not more) retail traders lose

so yeah, 7% is elite. What you described is outside the reach of 93% of traders who trade the market. What you describe is the thinking of an elite trader and how they operate.”

So I used to say a trader is successful if they can consistently and reliably pull capital from the market. While this is a true it’s actually the benefit of what an elite trader is.

A bricklayer can lay bricks expertly but it’s that amazing church he built brick by brick that will most likely be around for centuries.

If you’re looking to be successful at trading here is what I suggest is your goal:

Your goal is to become an elite trader in mind, body and execution.

Trading isn’t about Technical Analysis, Fundamental Analysis, or anything in that real.

Trading is this:

The consistent dedication to the adoption of positive habits and the maniacal focus of removing negative habits.

The capital, PnL, trading in the zone, operating like a pro in the markets is byproduct of your habit discipline outlined above.

Okay enough pontificating… Woudd Cicero be proud? Probably not that arrogant bastard. Let’s jump in.

Overview of Document

  • Required Reading - I strongly recommend you read every one of these books
  • Market Overview - overview of the crypto market typically not covered in books (from a traders perspective)
  • New to Trading Do This… (tips and advice for those who are completely new)
  • Don’t Make These Common Mistakes - stupid mistakes not to make
  • General Trading Tips & Advice - < what that says except most of this stuff is not my own
  • Order Book, Buy & Sell Walls - important outline of manipulation and walls you’ll see when trading
  • Rules for Trading Cryptos - My own rules I’ve adopted to successfully trade the market
  • Entering a Trade Checklist - steps I take before I enter trades
  • Top Questions & Answers - In this section I answer the top crypto trading questions I’ve received from Twitter, Discord, and YouTube.
  • Trading Tools & Resources - My top trading tools and resources

There are many terms, strategies, phrases, and acronyms throughout this document. If something isn’t clear there’s these 2 amazing things that have been invented:

1. Google - I mean like this site is amazing you can enter stuff, like anything and it will give you tons of answers. Some are bad, some are good, and some are awesome.. Just don’t believe everything you read.

2. YouTube - I don’t know if you’ve heard of this site but it’s like full of videos on just about everything and beyond-- and it’s like free (although frustratingly becoming highly censored), you can also search for stuff there as well. So if something isn’t clear use these little known sites Google & YouTube (or ask in discord server).

Quick Vocabulary

Just like the government or the military the world of trading and crypto loves it’s acronyms. To save you from having to provide too much of your data to google here’s some common terms I’ll use:

  • ATH - All time high
  • ALT Coin - Everything but Bitcoin (and well ETH in my mind)
  • ATM = At the Moment (safe for work version really the only thing I mean so get your head out the gutter)
  • BTC = Bitcoin (also trades as XBT on some exchanges)
  • Dumb Money - What smart money calls buyers, new investors and main street investors
  • ETH - Ethereum
  • FOMO - Fear of MIssing Out
  • FUD - Fear Uncertainty and Doubt
  • HODL - Hold On for Dear Life
  • Normies - What some smart money and shark investors call retail investors or unsophisticated investors
  • Smart Money - The big money who knows the rules of trading, the pros (see whales below). DO NOT GO AGAINST THE SMART MONEY.
  • TA - Technical Analysis
  • TAs - People who do technical analysis, there are many different types
  • RTTFD - Reddit, Twitter, Telegram, Forums, Discord. But also a catch all I use for anywhere else people gather to talk the crypto’s.
  • Whale - often used as a market participant who has a large amount of capital (I don’t like to use this phrase, it’s misleading, I instead use the term Smart Money)

Top Tools

Required Reading

Most of the people (like 85%) will pass over this section. Or if they don’t pass it over they’ll look at it and say they will come back to it. These books at a minimum are required reading. If  you want to make the most money in this market (short, medium, long) follow these steps:

  1. Order each one of these books now.
  2. Once you receive them or download them read them immediately.

It will not be time wasted.

You might hesitate because you’ll think that anytime you take away from looking at charts or trading you’ll be losing money. Resist that urge.

Go ahead don’t heed my advice here but you’ll be at a huge disadvantage and risk losing any gains, profit, or ability to profit long term in this new asset class.

Reading these books at a minimum will provide you with more knowledge than over half of the participants in crypto.

I intentionally did not put the names of the books because to me you are reading this for my advice and knowledge. I believe these books are as important as anything else I’ve put in this document. I could have easily included 10-20 (maybe I’ll put that at the end for additional resources) but these books should be read at a minimum.

Crypto Markets & Value:

Understanding Bubbles (must to prepare for market ups, downs, correction):

Crowds, Psychology (must for trading this market)

Mastering Your MInd & Emotions (Mastering doing the opposite of what is natural)

Market Overview

Realize trading crypto is much like trading amongst people involved in a cult. In a cult you have your god(s), leaders, rituals, and unique terminology. Here’s just some examples:

  • Bitcoin, Satoshi - Gods
  • Vatalik Buterin - E.X. Leader (creator of ETH), Roger Ver (literally called “Bitcoin Jesus”)
  • Rituals - Buy the dip, HODL, meme, check portfolio, dream of lambo, call Warren Buffet (and old world) idiots
  • Terminology - HODL, FOMO, FUD, etc.

Can you think of any other asset class that has been launched by a Jerry McGuire late night underwear fueled mission statement or white paper? That’s right-- the start of this asset class began as an idealistic drive designed to change the foundation of commerce between individuals and businesses.[1]

What this ultimately means is a large percentage of this market has been indoctrinated and has a hive/group mind.

Think about the implications of this for a second. I can just see all the big name CEO’s, Wall Street Brokers, etc. wishing they had invented indoctrination like HODL or FUD for the stock market.[2]

Imagine if the owners of any public stock essentially had a financial support base for their asset of 15-40%. And they backed it up with calls of HODL when bad news came out.

The stock tanked… “don’t worry, FUD, just HODL”.

If I didn’t feel there was true value in this market I’d say not since Da Beers was able to pull off the biggest marketing scam in history-- the diamond engagement ring has such an asset been supported.

Well we do have Elon Musk for some he gets hero and god workship. And this in my opinion that guy is the king of vaporware. That guy could come out tomorrow and reveal they’ve been working on the new vibrator and have a prototype and everything. Fanboys would pre-order and it might ship in 4-5 years. The days after Tesla stock would spike 18-30% easily because you know each Tesla seat would have an option for it and well of course it would be on some orgaasm subscription service. That guy… got to love him.

With all that said, blockchain, crypto assets, and where this could take us does have a huge potential to upset the current world order.

Market Participants

I shouldn’t have to put this here but I will… below I make many generalizations about each market participant.

To trade cryptos and when looking at an asset chart you must think in multi-dimensions. Here are the main market participants you must account for:

  • HODL/True Believers - 10-40% of asset holders who love the project, the coin, etc. They believe in the long term and are the ones you see on Reddit, change their Twitter profiles, when they get a paycheck buy, etc. Or have taken their savings and invested
  • Smart Money/Whales - Investors/Groups/Companies with large capital to put into play (the smart money)
  • BOTS - programs set to auto trade
  • New Investors - people just getting started trading, day trading, etc.
  • Shark Investors - professional investors below a whale
  • Coin Holders - this is unique in some ways to crypto, but you have to realize that some crypto’s had ICOs (Initial Coin Offering). Often these coin holders can sell coins right after these cryptos hit the exchanges. Some ICO’s require a certain holding period. The bottom line, you need to know if there is a large amount of sellers just waiting to sell off coins they got pre market.
  • The New/Old Generation Convergence - This is a new market participant I just identified based on some market action that made zero sense based on technical analysis… although markets should never make sense. I’ll expand below before we move on.
  • Institutional Money - I’m currently working on what this will look like and how I’m approaching this new market entrant.

HODL/True Believers

What does it mean to be a HODL or true believer? First, let’s cover the 2 definitions of a HODLr -- this is someone holding onto a crypto asset (yes at times for dear life).

There are 2 types of holders

True Believers

The first type of HOLDr is someone who truly believes in the project and the future it may bring. They also might be in it for the riches and the lambo-- although they really haven’t figured out where that end number really is-- how much is a lambo these days?

This first group you can easily spot by visiting Reddit, Discord, Slack, or Telegram groups. When analyzing a crypto asset this is one of the criteria that is often a good indicator of a base level of support. This group historically has support a crypto asset through thick and thin and is still on board for what the future may hold.

Keep in mind that just like any relationship this relationship between coin holders and the crypto asset/crypto team etc. can be damaged. If this group gets scorned or abused for too long they can and will turn against the project.

The 2nd group of HODLrs are investors or speculators that have bought crypto assets and got stuck in positions.

Speculators/Investors (bag holders)

Most speculators or investors when they get stuck in a position they call these bags (once again a term I don’t like to use). Many HOLDrs in this group bought at the top in January 2018. You cannot count this group as true believers. They might have bought the project at one time because they did believe in it but after potentially being down 20-150% for a few weeks any excitement tends to subside rather quick. These HODLrs are not holding out of belief they are stuck in their positions.

If they haven’t sold yet it will be interesting to see what happens if some of these crypto assets make it back to these prices. Expect to see quite a bit of fights at all resistance and support levels as this unfolds. What could offset this is a true growth in market cap in both BTC and the ALT coin market.

For a good explanation of understanding what happens when capital gets trapped at these levels you can see my video on Trapped Trades.

 

The New/Old Generation Convergence

This market participant merits special attention. First I don’t know how long this participant is going to last or be around given the volatility of BTC and the market. I first started thinking about this based on a series of market reactions I watched play out. The latest one is the SEC meeting on crypto currencies.

I’ve tuned out politics about 2 years ago except for a few radio shows. I’ve lived long enough to know most of it is theatre and unless you work in the town you’re on the outside and just part of the audience. But a few interesting things actually came from this SEC meeting.

First and most important-- my read of most pro traders and TA’s is they had a negative sentiment and the market would not react in a super positive way (big bull action). They also believed as I did that the news was already priced in. Keep in mind this was during a month of bear moves and the days leading up it was getting brutal. What happened was a rally from 6,500 to 8,400+ USD and stops and starts between.

I bring this up because during these runs multiple times I went against my trading style and plan. Each time as I retraced if I would have followed my plan I would have had some good gains as well as limited my risk.Quite simply I failed to trust myself and my read of the market.

This is a long explanation to getting towards the main point. I believe this market action was not from the investor class, the HODLs per se, or something that can be readily relied upon.

The New/Old Generation Convergence as I call it is made up of 2 persona’s and they share much of same thinking and attitude but differ in key ways they think about BTC and cryptos.

The New Generation

Here we come back to some of the statements from the SEC meeting.

Two really stand out. One was a story from one of the SEC chairman how for years he had been trying to get his son interested in the financial market. He even bought him some video game stocks thinking this would peak his interest. It didn’t, but what did capture his imagination and interest was Bitcoin and the investing in Alts. You’ll also see memes (often as jokes) that say something along the line… “You’ve got a 401K, I’ve got Bitcoin”. I think there is a certain amount of truth in both of these experiences.

Also, one of the SEC chairman spoke about how I think his niece is a HODL in Bitcoin. He found it fascinating talking to her about it and mentioned how she believed in the mission, picked it up and has no idea if it is going anywhere but she plans to HODL and see where it goes… good thing she didn’t buy at the ATH because at the time of this meeting BTC crashed at least 50%-- a little tough to be a die hard believer in holding then.

I’ve also talked to people in younger generations (college or about to enter college). I see this same sentiment for BTC and ALTs. At this time it seems it’s their version of the internet revolution. Many in this generation are willing to ride this out, see where it goes. They also might prefer crypto to traditional stocks.

This is where the two generations mix. The younger generation is starting to introduce crypto to the...

Seasoned (Old) Generation

I’m not sure which phrase is more offensive, seasoned or old… so we’ll go with both but I think you get the idea.

This one surprised me a bit but it makes sense given how much anybody who has been around for the last 30 or so years. This older generation are looking at BTC and Alts as a hedge for the future.

This older generation doesn’t trust the bankers, they’ve seen the dot com bust and rise, the real estate bust and rise, they see flash crashes in the stock market, etc. They know that social security is a joke and not solvent. Sure they might have 401Ks or pensions but they also realize that’s not guaranteed given how massively the bankers etc. seem to mess up the economy every 10 years. So the older generation that has seen a few cycles and gets the tech they are taking a swing.

This is important for a few reasons. First the older generation has built up assets and capital they can put into the market. I’m not sure how big this group is but I know a few people in their late 60s who are interested in this. The conversation with their children, even grandchildren or the younger generation has come up at dinner or family gatherings. They’ve been around enough to understand the value of something new or to at least pay attention. Also, as was mentioned in the SEC meeting-- they see the excitement by the younger generation in something financial. Given the apathy they often feel towards social media, snapchat and how the younger generation interacts I think this is an emotional connection point they can share in common.

When emotion and finance can intersect capital can move in strange ways.

Why These Participants Matter

First it should be stated that any person can be in one or many of these different core market actors.

When analyzing a chart or watching an order book strategize how each one of these market participants would interpret the asset, market, and conditions.

But as I’ve learned that can only go so far. The trouble for many technical analysts or pro traders in this space is market moves often make little to no sense. I attribute that to these TAs not taking into account what I’ve written above.

Many of these participants simply don’t care about the chart, buying a dip, or even if it’s in a FIB retracement, Elliott Wave, or Grandma’s PIE (okay that last one is made up). They have their eyes on something and they buy. Or the news that looked grim is suddenly bright and BTC moons, they FOMO in on the way up.

If there is one thing I would say above else is learn how to follow what the Whales (smart money) does. The smart money knows how to play this market. You might think they are locked away in some dark smoked filled room plotting and communicating… no, they don’t need or have to do that. They know the game, they know how to send each other signals without even talking to each other. If you can learn how to read and follow the smart money moves you can make huge gains in this market. If you go against them you will be crushed every single time you try.

Realize often what you see on the order book or the chart is or has been heavily manipulated. Oh it represents price alright but it got there in some pretty funny odd ways at times. I’ve watched hours of buy/sell order charts in real time to get this knowledge.

The Middle Finger

So here’s another interesting thing I’m starting to notice with the crypto market and specifically BTC…

Before I jump into that I should share that part of my group here is a good friend of mine who has been in BTC early, trading ALTs early and is what you would say is a whale. Sometime in the future I’ll put the full backstory in this doc.

The great thing about talking to him is he has real life historical knowledge of this market. BTC and all that follows has always been a FU to the banking and old world finance industry-- that’s a given. But up until recently I haven’t seen that attitude seep into the masses. I’m starting to see that now.

As new people are introduced to BTC and cryptos they are starting to adopt this attitude. It’s not a mass movement but more of a slow trickle that grows everyday. My belief is at some point in time in the future this will be a sleeping giant and will wake up.

It really grows the more clueless government officials and elites poke the bear so to say. The more times you see some old clueless government guy make a disparaging remark about Bitcoin or crypto’s the more this group of people dig in deeper. There is a growing group of people who are using BTC as a middle finger to the elites and bankers of this world.

I’ll expand on this in the future here but I have seen what I call “middle finger” continue to grow and gain momentum as the market moves forward.

The Geeks and Techies

Here’s another interesting thing starting to develop in Q1 2018. For those who don’t know I own a SAAS (Software as Service) business. This business creates a tool that aggregates news and allows you to easily share and publish this to news to  your site or blog. I mention this because I follow the tech industry really closely (or used to). I also have the ability to easily aggregate news, sources, and topics.

What I started to see in the first quarter of 2008 is just about every tech blog (from techcrunch to techmeme) really started to pick up on the blockchain, BTC and crypto’s.  There was a day last week for instance when I visited TechMeme (a tech aggregation/curation site) tha 80% of the stories was on BTC or something in the crypto market. This change has also been a slow build.

Something I think goes unnoticed is actually what BTC and the crypto space offers to someone who you just getting out of college or is skilled in computer science. This person  has quite a few interesting places to start working in. From ML (machine learning), AI (Artificial Intelligence), VR (Virtual Reality), Mobile, Internet Dev, etc.

What is interesting about BTC and the blockchain is it has a tech divergence through a few of these industries.

Generally if you decide to start to work for a blockchain tool or a crypto you’re going to have exposure to the internet, mobile, encryption, blockchain. Not to mention also that  you’re involved in what could be at the beginning of a new asset class. Add to that the mission behind the blockchain and the belief system you can see why it’s an appealing space to work in.

This is also why I think the elites and such have to be very careful. They’ve been slowly poking the geeks a bit here the last 6 months (more than usual). My feeling is they are playing with fire and if they push the geeks to far… well I’m not sure that is wise in this digitally connected world we currently live in.

Crypto Asset Classes

This right now is such a small part of this document but it is increasingly becoming more important. Expect updates to this section as time moves on. Also I share much of this on discord as new developments arise.

When you’re trading crypto it’s important to understand the asset classes of Crypto. Plan, trade, and hold accordingly. I really like this breakdown found from a reddit thread linked below:

  • Core holdings - BTC, Ethereum, LTC...etc
  • Platform segment - Ethereum, NEO, Ark...etc
  • Privacy segment - Monero, Zcash, PivX..etc
  • Finance/Bank settlement segment - Ripple, Stellar...etc
  • Enterprise Blockchain solutions segment -VeChain, Walton, WABI...etc
  • Promising/Innovative Tech segment - Raiblocks, IOTA, Cardano...etc

Excerpted from this post on Reddit (really good advice and gems up in there).

Also see the video from the private training.

Creating the Ultimate Crypto Portfolio:
https://www.youtube.com/watch?v=qlvKYLYmqX8

Detailed Asset Classes

The crypto market has really started to mature here and with that we are starting to see a few asset classes begin to form. Here is an overview of the

  • Digital currency - BTC, ETH, LTC, XMR, DASH
  • Platform - ETH, EOS, Cardano, NEO, VEN, ZIL, LSK, BTS
  • Smart Contracts - QTUM, ICX, LSK, WAN, WAVES, MKR
  • Payments - MTL, WEPower, RDN, UTRUST,
  • Privacy - DASH, zCASH, WAN, BTCP, HSR, KMD, PIVX
  • Gaming
  • Marketplace
  • Token Issuance
  • Anonymity
  • Real World Assets
  • Trading
  • Exchanges
  • DAPPS Infrastructure
  • Gambling
  • Wallets
  • Block Chain as a Service BaaS
  • Payments Service Provider

Crypto Trading is Pure Speculation

That’s right I said it. Crypto trading at the moment is more akin to gambling than it is to trading. It’s not anywhere near what you experience in other mature markets. I’ve seen many pro’s (or people who think they are pros) from stocks, forex etc. enter this market and be utterly confused.

Stuff like “all the TA and analysis I do in stocks doesn’t work here” is a common thing I hear. Well yeah, that’s right it doesn’t work because the crypto market is dressed up in drag (can I say that these days?).

Yeah, the crypto market is a super drag queen guy dressing up like a woman. But this guy I mean woman is one of those guys who you really can’t tell or you’re not quite sure—I mean you’d dance with her on the dance floor and your buddies couldn’t really say anything cause they aren’t quite sure either. I mean you’ll find out if you take her home but look I don’t care if you swing both ways or three.

Here’s the point, the crypto market is more akin to gambling because of the makeup of its participants and how it’s currently structured-- but it likes to dress up everything around it with what you would expect from a more mature market. You’ll find stuff like charts, volume, market cap, team makeup, mid-cap rank, total supply, etc.

Yes, some of this stuff matters—well it only matters because others in the market actually believe in it. But the reality of the where the tech and industry is now means this stuff is completely speculative and has no basis in reality. Just like the dot com era this can take a time to develop.

That’s why I say at this point in time…

Market Cap is Joke

Before I jump in and share why I think market cap isn’t the best measure of what you are “investing” in with cryptocurrencies let’s first discuss what market cap is.

Market capitalization, or market cap, is the total dollar value (or other value) of all outstanding units (shares, coins, etc). To get to market cap, you take the outstanding units and multiply it by the value of each unit. If Coin A has 100,000 units and each trades at $5/unit, then the market cap of Coin A is $500,000. Market capitalization is important for stocks because it allows for an apples to apples comparison (it would be silly if a company could increase its value by a factor of 2 by halving the number of shares listed). While the formula can be applied to cryptocurrencies in the same way it is used for stocks, it does not mean that the numbers returned have the same practical meaning (some ideas here are inline with this post here):

  • Unknown Future Value
  • Unknown ownership base
  • The Usage Gap
  • Fragmented Exchanges
  • Washing

 

Unknown Future Value

If you own a share of stock you have a fractional ownership in a company and assets or profits from the future. A crypto currency is more like a utility or a store of value. The issue is no one yet knows what this store of value means or is worth. It’s all speculation.

It’s speculation on how, where, when and why this asset class will hold value. It’s speculation beyond the simple bet that other investors will believe there is inherent value. Right now there are very few customers, use cases, tools, apps, and everything even released to in any reasonable way create a subjective current or future value.

Unknown Ownership Base

For many cryptocurrencies you don’t really know who owns how many coins or how many addresses (like BTC, ETH) really are controlled by a large group or the same group of people or entities. This provides a huge opportunity for manipulation and a huge unknown factor when valuing any crypto asset.

For instance, you know how many shares of Mark Zuckerberg owns of Facebook. You also have an idea when he chooses to sell those shares as this is all typically disclosed. In crypto you have no idea. Yeah usually there is some fancy graph but often deciphering who owns what percentage or who still owns what percentage is futile. It’s best to assume 50% of anything is controlled by insiders.

The Usage Gap

Where the market sits for the most part is none of the projects that have been launched have any actual real world application. Everything is a dream or an expectation. That’s not to say that crypto’s and the blockchain are not going to change the world. But all pricing on all assets that you see is pure speculation on future value on an asset class that hasn’t been truly tested.

Fragmented Exchanges

In stocks or forex you have a fixed amount of exchanges and they are regulated by governments. This causes issues in knowing the true value of any crypto asset, especially the smaller ones. This also causes an issue with liquidity and understanding how all the different exchange numbers correlate to just about everything else I’ve put in this section. It also opens up the market to great manipulation and is the cause of hacks, uncertain actors, and a host of other issues the market has yet fully solved.

Washing

This is something I hope most reading this do at least once a day. Washing in trading has nothing to do about going down to the river stripping off your clothes and singing a good ole tune. No idea where that came from… anyway. Washing in crypto works like this.

Basically, think of it as eBay allowing you to bid on your own items. Sure, you might end up winning your own auction and have to pay the eBay fee in a worst case scenario, but you might get other bidders to move so they don’t miss out.

Wash trading also can affect how market cap is calculated. If you wash 10BTC through a small volume chart that is real volume regardless of who owns it. That real volume will sustain the market cap number as well as it’s market cap moving average.

In Closing on Market Cap

All of these reasons (and a few more) are why market cap is a joke… yes a little bit of hyperbole there but if you take this perspective you’ll be more protected than if you didn’t.

The Fallacy of Why Is X Moving?

One of the biggest questions I see in RTTFD (Reddit, Twitter, Telegram, Forums, Discord) happens when something really starts to move or moon. For instance, let’s say TRX or XVG was up 30% today while everything else was down.

Inevitably I’ll see tons of people asking… “why is TRX up?” or “Anybody know why XVG pumped?” or similar type sentiments.

To ask this question is pointless and is complete waste of time.

Who cares? Why does it matter? I’m not being obtuse but to be completely upfront it really does not matter. Plus realize that know one really knows why something moves.

I get it… you want things to make sense. You want a reason. We humans are born to be curious-- cause and effect and all that.

You want to know something? I trade very successfully following little to no news. More than 80% of the time I have no idea why things “might” be moving. Sure I hear rumors and I do sometimes trade on “buy the rumor, sell the news”. But in crypto like all other markets sometimes things move for no discernable reason.

It’s a fool's errand to try to figure out why something is moving. And even with that knowledge you’re assumption would be that everybody buying or selling are doing so because of this news. You’re assuming all market participants are aware of the news and let’s say they are.

You’re then assuming all market participants interpret the news the same. So if we assume they have heard the news and they have the same sentiment you’re also assuming they are rational.

You want to know the only real answer to why something moves? Greed and fear. 

That’s it. Markets aren’t meant to make sense-- especially the crypto market.

Market participants in the crypto market are not rational.

I can show you chart after chart of price action that proves this point and I could do this going back years and I don’t see this changing anytime soon.

For instance, take a look at CTR:

https://www.coinigy.com/s/i/5ac82d0891067/

See that huge dip. That’s on the news that the SEC and the US Government had arrested 2 of the CTR founders.

I was fortunate to hear this news pretty early and sold all our “free coins” in CTR just before it dipped. I also traded this and still as of this writing trade CTR, yes even after Binance has announced they will be delisting the asset.

What you might say… have you lost your mind? Not exactly, I knew as CTR dipped there would be people “buying the dip”. This went on for a few hours but eventually quite a few people heard the news. So what explains that 270% move up? Who knows but I traded that move a few times as well.

So why did CTR pump 270% in a few hours? I heard the owners made bail. I also heard through a good source that they sent flowers to the SEC office. I also heard that Elon Musk was going to use CTR coins as virtual currency on Mars... These are only a few things I heard as I scalped that 270% move multiple times on an asset that should have gone to zero.

To put even more finer point on this… Before this news dropped on CTR the average profit we gained was 11.7% per trade. I bring this up because much of what the CTR team was accused of was well known and reported on in the legacy media (NY Times, etc.).

I am going a little overboard here. News and developments does make assets in the crypto market move. But the challenge in thinking like this is much of what I’ve already put above.

News, News Media, & Crypto

I’ll expand on this more and provide more reference points:

THIS IS NOT RIGHT! Please take this section with a grain of salt at the moment. It’s more complex and I have to articulate when the news doesn’t matter and when it does.

Often news is meaningless in crypto.  I'm not saying news doesn't matter, it does but here's the thing, even if the news is terrible if you position right you still can make money.

What you can't do is go and check the news, try to figure out what is driving the market down, read on it, try to figure out what every segment is reading in a world wide market.  Please don't fall into the trap thinking the news media controls the market. Capital controls the market. This is an asset class, yes very emotional (like a cult at times) as I put in my doc. Yes, news moves the market, but capital controls the market and the use thereof, if you remember one thing remember that, watch the movement of capital, watch where and how it's placed, when something dips 4% in 30 minutes like BTC it's not a loss it's an opportunity, no matter what the news is.

UPDATE:

I’m starting to amend what I put above. But I don’t have my assessment fully articulated yet. Once I do I’ll add it here. But what is above stands for the most part.

New to Trading - Do This...

Here’s the problem with providing guidance here. I can share what I consider the best steps to take to get started with trading crypto but there’s something even more important than that.

You have to figure out what type of trader or trader personality you have.

I can’t stress this enough.

Also, trading is something learned. It’s a skill or muscle you must build.

The right answer is what trading style do you statistically land in the green on your trades. A good place to start is to learn about the different trading styles and see where you align with your own risk tolerance. Here is a good place to start and this also helps as well.

Now for trading cryptos. If you are completely new to trading I suggest you start by trading BTC/USD or trade ETH/BTC pair.

Also, do what I suggest in this video:

https://www.youtube.com/watch?v=Ke9gZpKcLgE

Bitcoin is the backbone of the crypto market. Most alt crypto’s are traded on BTC or ETH pairs. We are just now starting to see BCC (BitCoin Cash). Once again, there’s a fight between 2 factions of the cult, Bitcoin and BitCoin Cash.

Even as you start trading crypto’s you will always have a chart of what Bitcoin is doing ready to view.

So let me make this clear. If you learn how to read the price action on a Bitcoin/USD (or your currency) you will have an edge and understand one of the key backbones of what causes price to move up or down in the whole crypto space. Keep in mind this might change but if you master BTC you can transfer your knowledge to any chart.

You’ll also notice that Alt crypto’s move in lockstep or sometimes opposite of what Bitcoin does.

How do you learn how to read a chart?

  • Learn how to read candlesticks (but don’t worry if you don’t get it what I suggest next will help more than anything I’ve seen anybody else share)
  • Learn what volume is and how it affects price

Once you have an idea of what the candlesticks mean, volume, and some chart basics here’s what I suggest every new trader do.

  • Use 1HR bars (candlesticks)
  • Spend hours (yes hours) watching the BTC/USD chart with 1 HOUR candlesticks while watching the order book.
  • Every now and then click over the depth chart (keep in mind this chart is often meaningless as it’s manipulated to lure in new or unsophisticated investors).

Why do this? If you spend hours just watching how buy orders, sell orders are placed, removed, and how BTC is traded you will start to see how the market works. The more time you spend watching how the candlesticks are created and what they represent the better professional trader you will be. Then the charts and candlesticks will have a meaning and you’ll know how the battle between buyers and sellers unfolded (or could have unfolded).

There are some charts (usually low volume ones, under 600BTC) that I can look at now and reason what happened over the last few hours because I’ve watched the chart quite a bit. One with a little more volume that I day trade is LEND: https://www.binance.com/trade.html?symbol=LEND_BTC

One that I day trade is https://www.binance.com/trade.html?symbol=AION_BTC and often I used to see a few 4-7 BTC positions that popped up to surge buying or selling.

The bottom line is the only way I believe I got to see these things and start to see how the different market participants listed above react is by watching the action in real time. Then seeing how that action was represented on the chart I was looking at.

There is no substitute for watching in real time a chart for an asset you’re looking to trade.

Once you do that then here’s what I suggest as the next step.

Only trade at most 2-5 charts (cryptos), yes you can trade more but until you can read any chart and strategize on how each market participant listed above might react you’ll be much more successful keeping your focus on something you can master.

There are many successful traders who only trade a few stocks, pairs or just one asset class of stocks.

The other reason why I suggest only 2-5 is this will help you see how the market on a different level acts. Your time spent watching BTC you don’t fully get to see all the shenanigans that take place in this market. It’s hard to spiff out the whales, the bots, the believers, the investors etc, because the volume is so large with BTC it’s just hard to do that. Oh, don’t get me wrong, when BTC crashes you’ll clearly see where the smart money steps in but they have a much harder time (although they do) manipulating the price action on BTC.

On the smaller volume assets you’ll start to see some weird stuff. Like on POE:

https://www.binance.com/trade.html?symbol=POE_BTC

At times this is a heavily manipulated asset.

But I want to Trade Now!

Okay, okay I hear you. So you want to trade now and maybe paper trading just isn’t enough for you. If you’re just getting started why not hedge your learning by trading the two store of value in crypot ETH and BTC. Here’s a video explaining how and why this can be a good place to start:

https://www.youtube.com/watch?v=CfSpQJECQoA

How to Think About Building Wealth in Trading Cryptos

When it comes to trading or building wealth in the crypto market there’s a few things you have to consider.

When trading crypto’s you should outline the following goals:

  • Acquire crypto coins at the lowest cost or ‘free coins’ (more on this below)
  • Build your BTC or ETH balance

It’s possible to be successful at trading cryptocurrencies and still lose fiat money.

How can that work? Let’s start with an example.

Let’s say you buy 1 Bitcoin at 10,000 USD. So you have 1 BTC. From there let’s say you trade ALT crypto’s and grow your BTC balance to 1.2 BTC. Good job!

The challenge is in that time BTC price dropped to 7,500 BTC. Holy Shnikes you say… but I was successful at trading. I acquired more BTC, which is true. The challenge is you’re 1.2BTC is now worth $9,000. Great job, you lost $1,000 (this same calculation could be done if you trade the ETH pairs with obviously lower pricing).

See the thing to understand is in the crypto market and trading you’re looking to acquire BTC and ETH with the anticipation that both will substantially rise in price.

Now I know what you’re saying… well I’m smarter than that. What I’ll do is when I make the 1.2BTC I’ll move my funds to FIAT sell at like 9,500 and then rebuy at 7,500. Sure that can work-- if you time it right and have tremendous management skills. The challenge is it’s not that easy when your actively trading (and when you can’t predict the future). BTC could have just as easily shot up to 12K.The other issue is at the moment it’s not the easiest to move from an ALT asset to BTC to Fiat.

The best way to look at trading crypto’s is two fold. First, you’re trading crypto’s to acquire either BTC or ETH. You’re doing this in the anticipation that BTC and ETH will be worth much more than what you’ve paid for it.

That’s not to say you aren’t going to take profit along the way. That’s more than doable. It’s also why we structure our current trading this way:

  • 20% - BTC trades (trading FIAT and BTC, e.x. BTC opened at 8,510 we sold at 8,955.)
  • 80% - Trading crypto’s with various strategies

That’s a high level overview and to be upfront our trading strategy is much more sophisticated than that. I will update the document with this more sophisticated approach.

Dollar Cost Averaging

You also want to dollar cost average into BTC as much as possible. That way as BTC reaches new levels you can take profits or enter at that various level.

What does that mean?

Let’s say you bought in at 6,500. You could sell anywhere above that and realize profits. Then rebuy in on another downtrend. Let’s say you sold at 8,300. It runs up to 9,500. Yes you missed out (that’s why you still need a core holding in BTC). But then it dips down to 8,800, you buy back in, runs up to 9,750, you can sell again. This is a completely valid way to have exposure to the crypto market and trade.

What you are hoping for when trading crypto’s is the following. You buy BTC low. You trade ALT crypto’s to acquire more BTC and both rise at great percentages. Otherwise all the work of trading ALTs become meaningless.

Dollar cost averaging additional reading:

What’s the Best Trading Strategy?

Grow slow and have a long term view.

The most successful non institutional traders in any market master the art of the slow growth strategy. They understand that (many of the rules I’ve put below) have been tested and there is a rare breed of people who can break these and be successful.

Should You Day Trade?

No. If you are new to trading it’s a double no. To day trade is a waste of your time and effort.

I’ll cut to the chase. If you’re new the type of trading you want to start with is called swing trading or long swing trading. This is type of trading when you are new is the highest percentage viable trading strategy. It’s also the easiest to master quick and works well in the crypto market if done correctly.

Since I know many new traders have thick skulls (like I did) let me share why day trading is a fallacy to start with. With day trading your looking to be in a trade within a few minutes, hours, or the day. As a new trader you need to build into your mind longer time frames. Smart money thinks in longer time frames. Smart money does the opposite of what “dumb money” does. You want to be smart money.

I need an analogy here and when I come up with one-- it will be here. Until then be smart and listen to what I say…

But xKav you might say… you day trade. Yeah, true. But I’ve slowed down a bit and I only day trade because I’ve built up the skills and frankly I get bored waiting for the more reliable trade setups (swing and long trades). If I wasn’t full time with this (and had other income) I wouldn’t day trade at all. Yes it can be a nice account builder but it also has a diminishing amount of returns. What I mean is if you spend your time day trading you will miss the 1-3 trades that will make your month or quarter. I’ve built in the systems and experience so I don’t miss those that often (but I still miss trades that I wouldn’t if I only did swing trading).

Don’t Make These Common Mistakes in Trading

These rules apply to crypto but I also believe they apply to all trading.

The Easy Trade Trap

If you ever catch yourself saying “oh, this is a great setup, this will be an easy trade”... or something similar stop immediately and do not do the trade.

I’m not saying that if you see a trade setup that fits all your parameters that you don’t take it I’m specifically saying that in your mind or if you say out loud, it’s an easy trade don’t do it. Or triple check your setup.

The One More Trade Trap

Similar to the easy trade trap this one usually comes just before you are ending your day or you have some errand to run. You’ll say something like… “I’ll just knock out one trade before I go”.

The problem with this thinking should be obvious. You don’t decide when to trade. The market, the chart, your analysis, etc. decide if you enter a trade. Getting one more in before the end of the day or before some other similar excuse is a very dangerous habit.

Jump the Line

Don’t ever jump the line. I’m sure there is some trader term for this but here’s a mistake I made (and sometimes make here and there). I call it jumping the line. Basically you have been watching an asset for a bit, you’ve been waiting to enter. Maybe you even saw it go up a few times and you hesitated each time. Suddenly a big order pops up just at or right at the price.

Pump & Dumps

If you trade crypto’s for any amount of time you’ll come across what are called pump or dumps. There are groups of people on Telegram, Twitter, Discord, etc. that organize a huge buy and sell to make profit.

My advice: don’t waste time on these. You are not on the inside. These groups purchase positions well in advance… (you can spot these from time to time, but even then it’s not worth it). Then they promote to group(s) and exit their previous positions. I have no idea the legality of these activities either but I can say it doesn’t feel right and well it’s filled with complete wrong mentality of being a successful trader.

I spotted these things early on in my trading then really learned much more. Want more info check out How Traders “pump and dump”.

Order Book, Buy & Sell Walls = Manipulation

Ah Walls. I’ve mentioned this a few times here in this doc (and in my videos on THE YouTube). When trading crypto’s you will see what are called buy/sell walls. Most of these walls are fake and designed to send signals or lure in unsophisticated investors. To better understand what a walls are you have to understand what it visualizes… the order book.

An order book is a list of all the active buy and sell orders placed for a currency on an exchange.

cryptocurrency order book

Order books are a great place to gauge trader sentiment for a specific cryptocurrency. It allows traders to see a list of buy and sell orders and allows them to get a sense of market depth. Simply put, it’s just a way to see what some of the highest and lowest bids are for buy and sell orders. You can make purchases directly from the order book on most exchanges.

What is a buy wall?

To put it simply, a buy wall is what occurs when the amount and size of buy orders on a specific cryptocurrency far exceed the amount of sell orders. The wider and taller the buy wall, the better. A buy wall is a good sign for traders because it shows good sentiment regarding the currency. It means that traders are wanting to buy more than they are wanting to sell. If traders are buying more than they are selling, it becomes a sort of race to buy up all of the cheap orders. As the cheap orders get bought up, the buy orders quickly fill in behind the rising price point.

What is a sell wall?

cryptocurrency sell wall

Sell walls are the same as buy walls; just with sentiment in the opposite direction. Sell walls are indicative of a long road ahead for a cryptocurrency. When sell walls build, traders generally sell. When big sell offs happen, traders tend to fill the highest buy order they see on the market. Once the highest buy order is filled, the next lowest order in the book gets filled; and so on and so forth until the market stabilizes. When you see a sell wall, it’s probably not a good time for day traders to enter into that currency.

Identifying Fake Walls
When you’re a cryptocurrency investor that either day trades or holds short term positions, you have to play smart. You have to understand that there are whales that have the ability to manipulate markets. Whales are traders with large amounts of capital that can put a buy or sell order at a certain position that is large enough that it is unlikely to be filled. They can set the floor and ceiling for price movement.

fake cryptocurrency sell wall

Fake walls can be identified by their tall, vertical appearance. They typically don’t have any sort of price runway and are usually placed as either the lowest sell order or highest buy order on the exchange. The reason we call these fake walls is because the trader that placed the order has the ability to remove it at any time and cause drastic price movement. In other words, the sentiment is fake and there is no real market support.

For fake buy walls, the whales place large, un-fillable orders that mimic high positive sentiment for the currency. Whether intentional or not, the walls give novice traders a sense of confidence that their position will hold and lead them to believe that the current price point is the new floor. As a result, buy orders start appearing above the wall. Nowhere to go but up, right? Wrong. The whale can pull the wall at any time and if the whale’s order made up the bulk of buy orders, the price can shift dramatically in the opposite direction. Traders that bought above the whale’s position can get burned and lose their investment.

The same applies to fake sell walls. Whales can place large, un-fillable sell orders in an attempt to hold the price down and purchase the currency for cheap. Once they get their fill of coins, they can easily pull the order and cause the price to launch up if the sentiment was generally positive aside from their order. This is how the whale wins; by tricking traders into selling cheap coins.

Order Books Aren’t The Be All, End All

You can’t use order book trading to perfectly gauge sentiment. It can only give you pretty reliable representation of where the price might move. In a lot of cases, people won’t place orders at all and the price will move wildly from people buying existing orders on the market. You really have to use your intuition. (source)

Smart Money, Stuffing & Slippage

To trade crypto you also have to get good at the way smart money trades. The moves they make and how they support and stuff the market.

For instance, to swing trade you have to learn to how to spot slippage and trade with it

Here's one video I've found that does a good job of explaining what to look for, this will educate, it won't tell you how to find this and trade accordingly in crypto though: https://www.youtube.com/watch?v=TzKQwttv9IA

Rules for Trading Cryptos

Below are rules I’ve etched into stone for my trading. Once again much of this is advice I’ve adopted from other traders/teachers.

  • Anything in the green is a good trade
  • Protect your capital at all cost
  • The only important questions (when going long). Are there buyers in this market/for this asset?
  • Can it be proven in the chart?
  • The price is the price. Don’t try to justify it (except for long term potential). But if there are buyers lining up to buy who are you to say it’s not worth that. The market is telling you otherwise so go ahead and laugh at the pet rock.
  • Never buy above a base (unless: knowledge unknown to market)
  • Never buy a green bar (1hr)
  • Never buy unless you know the chart… even then verify what you think you know (see process below)
  • Never buy more than 20% of available trading balance (should be 5-15, but the current state of the market is forgiving, can turn anytime so getting closer to 5-15 is safest)
  • Missing a trade is good, you’ll get the next one, if not there are 100s other that fit the model
  • Cut loses quick
  • Think in percentages not in your currency
  • This way as you scale up your trading it doesn’t matter if you trade 100, 1,000, 10,000, 100,000, etc. it’s percentages.
  • Trade in BTC (or ETH) do not trade or think in your currency
  • Unless you trade BTC/USD or ETH/USD etc.
  • Remember crypto is a worldwide market
  • Know what time it is around the world, how that affects volume, how that affects the asset you’re looking at
  • People have a bias towards price rising (always assume the price will go down, make the chart prove to you there are buyers and that there is a high probability it will not)
  • Remember people do have a bias towards round satoshi and currency numbers
  • Often means resistance is at whole satoshi numbers
  • Often resistance is also at native currency numbers (IE XRP at 1.50 USD)

Entering a Trade Checklist

I do this before the entry of every trade. Everytime I do not follow these steps I have regretted it and are stuck with bags or waited longer than I felt comfortable for profitts. You might wonder, how do you have time to do all this? I suggest and trade 1HR time frames (except on some day trading, I only trade those on charts I know well). So when you see a trade break resistance or a base you have more than enough time to enter a trade, it unfolds over hours. Even in a market crashes most of those take 2-4 hours before the smart money steps in and stuffs the market.

Start of Trading Day

You should always check these the start of the day. As well as throughout the day.

Pull up and have at all times the following charts:

  • BTC/USD (or your fiat pair)
  • ETH/USD
  • LTC/USD
  • XRP/BTC - Or whatever is 3rd in market cap

Entering A Trade

  1. Are there buyers?
  1. The answer should be a high percentage answer - like 90+%
  1. Confirm Support & Resistance Areas
  1. If first time that day trading the chart
  1. Check 1 hour chart
  2. Check every hour from there (YES! 2, 3, 4, 6, 12)
  3. Look at daily chart (1 Day Bars)
  1. What is the trend of the asset?
  1. Down - what is the market doing in general
  2. Up - high percentage okay
  1. Look at weekly chart
  1. Would large cap enter at this area?
  2. Do I see hints of large cap accumulation?
  1. If actively trading that chart on the same day still go back with a fresh eyes to verify
  1. Fundamentals of Trade
  1. What day is it?
  2. What time is it around the world?
  3. Check high/low of day
  1. Where are you in relation to that
  1. Check volume and moving volume
  1. Is there stopping price action?
  1. Check moving averages on multiple timeframes (should have been done above)
  1. Are there any crossovers?
  2. What’s the trend?
  3. Does this respect MAs?
  1. What timeframes
  1. Check base MAs
  1. Check MACD (for bias)
  2. Check StochRSI on 4 timeframes
  3. Verify IchiMoku on 4HR
  4. Check Sentiment (At this time since I know the market quite a bit I don’t do this unless a trade starts going hard against me)
  1. Our secret app
  2. CoinMarketCap (other sites)
  3. Google News
  4. Check Reddit
  5. Search Twitter
  6. Check other social for asset (discord, telegram, Twitter, etc)
  1. Plan Trade
  1. Verify numbers the same on as what Im seeing in charting tool (1HR, 30MIN, 15Min)
  2. Plan trade (everything above tells you this)
  1. What is the entry point?
  2. What is the exit point?
  3. What is the stop loss?
  4. Execute trade
  1. Enter Buy Limit
  2. Enter Sell Limit
  3. Enter Stop
  1. On Executed Trade
  1. Enter into CryptoCompare
  2. Enter into Trade Journal

General Trading Tips & Advice

What follows below is a mash up of some of the best trading tips and advice I’ve found helpful in my path to becoming a successful full time trader. Much of what is here are notes from videos, books, or other sources. I work hard to fully cite the source but if you notice something isn’t cited please get in touch and point it out

20 (plus 11) Non Breakable Habits of Highly Successful Traders

I wish I would have found the video down below when I first started. I would have had a great checklist for habits I should be adopting in my pro trading. I’ve personally made some of these mistakes a few times.

All tips and full explanation come from this video:

https://www.youtube.com/watch?v=el10dgDa2Do

1.Wealthy traders are patient with winning trades and are enormously impatient with losing trades
2.They realize that making money is more important than being right
3.They look at charts as a picture of where traders are lining up to buy or sell
4.Before they enter any trade they know exactly where they will exit for either a gain or a loss
5.They approach trade number 5 with the same mindset they did on the trade 4 previous losing trades
6.They use "naked" charts and focus on zones
7.They realized a long time ago that being uncomfortable trading is OK
8.The markets are their workplace. They are a participant, not an on-looker.
9.They stopped trying to pick tops and bottoms.
10.They stopped thinking about the market being "cheap" or "expensive"
11.They are willing to change sides if the market tells them to do so
12.They trade aggressively when trading well and modestly when they are not
13.They realize the market will be open again tomorrow
14.They never add to a losing trade... EVER
15.Cash is the goal, but never the measure of success
16.They read about mobs and riots
17.They provide liquidity to the markets while watching price and volume
18.They have a way to gauge fear, greed and speed of the markets: Tick charts 233, 612
19.They practice reading the right side of the chart, not the left
20.Every wealthy trader has an "edge" they can explain to their mothers
21.Their position size is calculated exactly on risk tolerance
22.Profit targets are based on average range or something objective
23.One or two trades a month make their month
24.Confident decision makers in the face of incomplete information
25.A losing trade does not mean they are a loser
26.They buy higher highs and sell lower lows
27.Their business isn't trading, it's finding the right trades
28.They write down or record every trade, price, thoughts, news, attitude
29.Their conviction on an active trade remains unless something major changes
30.A winning trade does not result in taking on extra risk the next trade
31.They trade the reaction, not the news

Aggressive Trading Talk

In this great video John Carter was interviewed by Aaron Fifield. He had many gems of insight in here that rang true. Here’s the key things I feel that if you think about and digest more they can be game changers for you:

  • Don’t look at a chart for more than a split second. The good setups you’ll see instantly. This is also why I believe all traders should start with naked charts.
  • It’s the price action that matters. Don’t let the indicators get in the way of what is actually happening in the market or chart.

Mark Douglas - How to Think Like a Pro Trader

Traders fall into 3 categories (in regards to equity curve)

  • You’ve got your consistent winners - their drawdowns are a reflection of a normal losses that any trading methodology will incur
  • A trader who has some knowledge but drawdowns are the case of constant trading errors - boom and bust traders
  • Consistent losers

You have an internal representation and an external representation of how you define yourself.

Seeing patterns from a relatively care free state of mind.

Trading without fear is a psychological skill. It’s a skill that the professionals have acquired and they have evolved beyond the typical mindset that the typical trader operates out of.

Trading is execution.

What do you need to achieve consistent results?

  • Be able to identify an edge (trading method)
  • Risk parameters
  • Money management (position size)
  • Profit objectives
  • Components of “Consistency” (trade execution)
  • Be comfortable with trade execution
  • The ability to execute trades flawlessly so you can utilize your trading plan to its maximum potential
  • Develop the ability to recognize if you have crossed the threshold from normal self-confidence into a state of euphoria
  • When you are in a state of euphoria you are in a state of risklessness. You have no ability to perceive risk.

Top Questions and Answers

Below is a running list of the top questions and my answers I’ve received on Twitter, Discord or YouTube.

Selling At a Loss or Bags & Making That Loss Up

"with portfolio restructure is it recommended to sell some coins at a loss and make up the loss with an other coin? I hold some coins which I bought at ath. Not sure if I should just hold and wait it out. Some feedback will be appreciated. Thanks.."

This is a math question really.

The first question is what is your loss?

If it’s something that will take quite a while to make up in current market conditions then can you exit that trade on a rise in price and do you have the ability to make up that loss?

How many trades do you have to do in order for that to happen?

Taking a loss can also help in the psychological sense in that you can start over. Here's the thing to watch-- start tracking like a crazy person and if you make the same mistakes then you need to stop immediately and figure out how to fix. I went through a phase where I did this and only recognized it by tracking my trades closely in a spreadsheet

You should literally do the math though. Say I exit here and at this loss. I do these X amount of trades and make up the loss here. You also have to factor in losing trades.

Trading Tools & Resources

Top Tools:

Bitcoin Tools:

Significant Orders Tool

This tool is pretty cool. It allows you to filter the order book based on size of order. Pretty good at sniffing out smart money and real order trends:

https://beastlybeast.github.io/SignificantTrades/

Here’s a video that shares a little more:

https://www.youtube.com/watch?v=PZ_te-uni8w

Market Research Links

Best Sites for research:

Other Sites (these are good but my secondary sources)

News Sources:

Scanners

Trading

History:

Charting & Reading Charts

I’ll be doing videos and adding some of the best curated tutorials, links, books for charting. Here’s some to start:

Additional Reading:

Good comparision on the dot com bubble to possible crypto bubble: https://medium.freecodecamp.org/are-we-in-a-cryptocurrency-bubble-a-comparison-with-the-2000-dotcom-bubble-a463d8dd8d8b

End… more.... soon.

Update Log

  • Apiril 5th, 2022 - added some new intro stuff on my trading and my training. Also edited things that got picked up by editing tool. Added Elon Musk example and his new soon to be released vibrator.
  • May 2019 - minor updates
  • March 22, 2018 - Added market cap is a joke section and about (2K words)
  • March 23, 2018 - Editing and moved a few things around
  • April 4, 2018 - Added Q&A section and updated intro
  • May 15th, 2018 - Edited sections, added some key phrases and also started to add Institutional Money.
  • May 22nd, 2018 - updated my trade checklist with more details on things I do that for some reason I didn’t have there. Much of these things are confirmations to see what other traders and systems are looking at.

[1] https://bitcoin.org/bitcoin.pdf

[2] Brokers actually do have their own form of indoctrination they provide via training, relationships with training companies, etc. Small point but worth mentioning.