[Trading Method] Simple strategy that I use for trading crypto

[honestIM]

This sharing is meant for trader and not investor. So take this with you if it applies to you else simply ignore this thread.

My criteria for identifying trading opportunities are as follow:

1. The crypto has move up in pricing previously breaking new highs (fundamental of the crypto is not my concern as I am a trader, I only trade for profits or take my losses)
2. The crypto has pulled back and drop in pricing
3. Bottom out scenario has occured ( refer to diagram below whereby I enter my trade on the 15th)
4. Cutloss of 30% strict rule must be enforced, holding period of max 30 days.
5. Trailing stop loss applies (this depends upon your exposure level and this is a subjective moving target.)

Personally I prefer to to trade on crypto on big exchanges (though lesser known or china exchanges gives much profit potential) due to liquidity concerns. I usually enter a min trade size of $20k and this amount is enough to cause big price movement for low liquidity exchanges and crypto.

In the above case, I enter my position on the 15th Dec after seeing signs that the drop has bottom out. Refer to 12th-13th Dec whereby price is appreciating as a guide. The candle on the 8th Dec is important as the daily low for this particular candle cannot be breach in order for this trade to stand. 12th - 13th Dec shows proof that the candle low on the 8th Dec has not been broken. Thus I decided to enter my trade at the closing candle price of the 8th Dec.

I tend not to chase winners unless price break out occurs. Usually this means that a price movement of at least 30% for 2-3consecutive days. I noticed that usually price will go even higher due to market anticipation of positive news.

Note: You can treat this as nonsense if this does not helps you in anyway. I will be glad if the above sharing helps you.

 

[DoubleUp]

With an early market like crypto, could you not make bigger gains simply buying and holding?

 

[roman375]

This sharing is meant for trader and not investor. So take this with you if it applies to you else simply ignore this thread.

My criteria for identifying trading opportunities are as follow:

1. The crypto has move up in pricing previously breaking new highs (fundamental of the crypto is not my concern as I am a trader, I only trade for profits or take my losses)
2. The crypto has pulled back and drop in pricing
3. Bottom out scenario has occured ( refer to diagram below whereby I enter my trade on the 15th)
4. Cutloss of 30% strict rule must be enforced, holding period of max 30 days.
5. Trailing stop loss applies (this depends upon your exposure level and this is a subjective moving target.)

View attachment 98919

Personally I prefer to to trade on crypto on big exchanges (though lesser known or china exchanges gives much profit potential) due to liquidity concerns. I usually enter a min trade size of $20k and this amount is enough to cause big price movement for low liquidity exchanges and crypto.

In the above case, I enter my position on the 15th Dec after seeing signs that the drop has bottom out. Refer to 12th-13th Dec whereby price is appreciating as a guide. The candle on the 8th Dec is important as the daily low for this particular candle cannot be breach in order for this trade to stand. 12th - 13th Dec shows proof that the candle low on the 8th Dec has not been broken. Thus I decided to enter my trade at the closing candle price of the 8th Dec.

I tend not to chase winners unless price break out occurs. Usually this means that a price movement of at least 30% for 2-3consecutive days. I noticed that usually price will go even higher due to market anticipation of positive news.

Note: You can treat this as nonsense if this does not helps you in anyway. I will be glad if the above sharing helps you.

Interesting post. I am curious to know though how you determine that the drop has bottomed out and the brief recovery in the following days is not simply a temporary rally or a bull trap?

 

[slager889]

With an early market like crypto, could you not make bigger gains simply buying and holding?

You should be doing both.

 

[DunDidIt2X]

Good basic strategy. I like to do swing trades on the waves, and use a crypto that has at least a 50% margin on the ups and downs and another crypto that is static with a slight long-term growth upward (to minimize risk of swinging to a loser).

 

[Phantasy]

"Cutlose of %30"

That's what I never do and lose a bit lot of money.

Yet thanks for your tips man

 

[seogiantking]

Love to follow john macfee tips for trading.

 

[waterworks]

Last week I dumped a coin for a loos, so I could move it to a hot coin. With the hot coin, I made up the loss in about 20 minutes, and ended up taking a solid profit when I cashed near the peak. Then I took a look at original coin I was hesitant to jump out and it had slid down even more. So I rebuy at lower price and made a bit more money when I cashed out on that one later that day.

Point being, sometimes it's better to take a loss on one coin, if a great opportunity exists elsewhere.

 

[honestIM]

Interesting post. I am curious to know though how you determine that the drop has bottomed out and the brief recovery in the following days is not simply a temporary rally or a bull trap?

If you have been trading for many years, it comes naturally when you look at the price chart as you can see that sellers are not selling more to push down the price and buyer is starting to buy again. Basically you can read this from the candlestick. Remember the candlestick on the 8th, the bottom closing of this candle should be a warning of a bull trap, price should not pass through this, if it passes through, most likely the trade is dead. And it is time to move on and cut loss. This is why you have a cutloss point setup. For crypto my cutloss can be 30% but maybe you are only willing to accept 10%? It all varies upon your risk exposure.

"Cutlose of %30"

That's what I never do and lose a bit lot of money.

Yet thanks for your tips man

Not just cutloss. Sometime people confuses trading with investment. For investment you can hold long term but for trading it is short term. Example, I have $100k to invest. I can invest the full amount into a good fundamental asset that I am confident in. Whereas for trading I will split up the $100k into $5k batch and enter at most $5k per trade so that I do not lose all in one bad move.

Example, i make around 10 trades and lost 8. Each losing trade I lose $1k and each wining trade nets me $5k - $10k.
I can lose $8k (8 trades) and still end up as a winner with a min profit of $2k up till $20k. That is 2% - 20% ROI and this is what I am making with forex trading daily. For crypto I tend to hold for max 30days.

I do not invest into Crypto because I only invest in things that gives me a confirm return aka dividend or rental or business (as I can control it). Crypto is more suitable for trading in my personal opinion unless you have big capital to invest whereby you can afford to hold for a long period of time and need not sell them.

Last week I dumped a coin for a loos, so I could move it to a hot coin. With the hot coin, I made up the loss in about 20 minutes, and ended up taking a solid profit when I cashed near the peak. Then I took a look at original coin I was hesitant to jump out and it had slid down even more. So I rebuy at lower price and made a bit more money when I cashed out on that one later that day.

Point being, sometimes it's better to take a loss on one coin, if a great opportunity exists elsewhere.

Yes this is the mentality of a trader so it is important to differentiate if you are investing or trading. Both works but does not work well when you mix these two together.

 

[wfjcc]

What are great trading books? Most books I see are about investing.

 

[hero76]

Trading $20k on a chinese exchange is like sleeping with a thai prostitute and waiting for burning pee !

Biggest problem with crypto today is lack of reliable exchanges! I wanted to buy 1 btc worth of a certain coin and the only exchange it was sold on was etherdelta which just got hacked. You can easily move the price of a small coin and self-pump it with $20k. A strategy i learned over the summer and made $50k from $5k.

Good article still

 

[AlanWatts33]

Last week I dumped a coin for a loos, so I could move it to a hot coin. With the hot coin, I made up the loss in about 20 minutes, and ended up taking a solid profit when I cashed near the peak. Then I took a look at original coin I was hesitant to jump out and it had slid down even more. So I rebuy at lower price and made a bit more money when I cashed out on that one later that day.

Point being, sometimes it's better to take a loss on one coin, if a great opportunity exists elsewhere.

Except when you cash out your verge 1 day before kaboom

 

[DunDidIt2X]

Last week I dumped a coin for a loos, so I could move it to a hot coin. With the hot coin, I made up the loss in about 20 minutes, and ended up taking a solid profit when I cashed near the peak. Then I took a look at original coin I was hesitant to jump out and it had slid down even more. So I rebuy at lower price and made a bit more money when I cashed out on that one later that day.

Point being, sometimes it's better to take a loss on one coin, if a great opportunity exists elsewhere.

You playing ICX on Binance?

 

[honestIM]

What are great trading books? Most books I see are about investing.

Actually the best way to learn nowadays is through forum dedicated to trading, most other stuffs can be read for free online as well. When I first started trading I have to stuck myself in the library for hours to read. Nowadays it is so convenient.

Trading $20k on a chinese exchange is like sleeping with a thai prostitute and waiting for burning pee !

Biggest problem with crypto today is lack of reliable exchanges! I wanted to buy 1 btc worth of a certain coin and the only exchange it was sold on was etherdelta which just got hacked. You can easily move the price of a small coin and self-pump it with $20k. A strategy i learned over the summer and made $50k from $5k.

Good article still

No regulation is a problem as anyone can easily manipulate smaller coins and artificially creates demand/supply to manipulate pricing. I can use two accounts from bittrex to buy and sell to myself (most basic form of security fraud). Or even create bot to post fake buy/sell order that cancel automatically when order is about to be filled.

To be honest up till now, I still do not know how to compute the value of the crypto. In conventional investment, there is a residual asset value even if market crashes. Example, stocks can lose 100% value but there are still assets left to sell off and there is pennies available for payback. Gold/Commodities losing 100% value? Very unlikely. Whereas for crypto I cannot determine the underlying residual value. This is why I never invest long term on crypto.

 

[jhonntluck]

i lost some $ on yobit , this platform is it demand a verification via passpot ??

 

[honestIM]

i lost some $ on yobit , this platform is it demand a verification via passpot ??

Almost every platform will ask for verification the moment fiat currency is involved. The govt is clamping down very hard on BTC through limiting the channels of fiat converting to BTC and vice versa. Verification is important for the govt to identify you and tax accordingly.

 

[PropertyGrow]

When you look at the charts, do you always look at 1-day candle sticks to determine that currency has bottomed out?

 

[badd]

Do you use 30 mins candle sticks to identify when the price has bottomed out or ONLY one day candle sticks?

Also how do you identify which coins you decide to trade? Thats the part I am struggling with when it comes to trading.

 

[jhonntluck]

Almost every platform will ask for verification the moment fiat currency is involved. The govt is clamping down very hard on BTC through limiting the channels of fiat converting to BTC and vice versa. Verification is important for the govt to identify you and tax accordingly.

Hey , and Thanks for this clarification , by theway my country banned bitcoin and dealing with it if someone caught using btc direct to jail i dont even know how those people think , anyway thanks so much and home you all the best and success.

 

[honestIM]

When you look at the charts, do you always look at 1-day candle sticks to determine that currency has bottomed out?

Do you use 30 mins candle sticks to identify when the price has bottomed out or ONLY one day candle sticks?

I primary uses daily chart. Do note bottom out is not 100% certainty. So a cutloss must always be in place to prevent heavy losses.