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

[Floydiohead]

I use tradingview and MT4/MT5, if that helps

If you're getting into stocks, start on investopedia.com

If you're getting into forex, babypips.com is your first stop

good luck

Firstly, thank you very much.

I am gonna get to know all of them, but i m mostly interested in crypto trading.

 

[fly84]

Can the concept and strategies in trading stocks be applied to cryptos?

 

[honestIM]

Can the concept and strategies in trading stocks be applied to cryptos?

Sorry everyone if I missed your messages. I have been very busy the past few days to reply decently on BHW.
For stocks, the concept is slightly different. Stocks are assets with value and residual assets even if liquidated whereas crypto is different. This is the first fundamental different. Secondly, stocks are usually heavily leveraged by traders so profit taking or market correction happens more frequently than crypto. Crypto liquidity is limited thus it tends to move in a singular direction. If it goes up, it goes up alot without logic, but when it goes down, it goes down equally fast without logic.

Strategy for trading is different as crypto, you need at least 15% or more profits to take position. Whereas for stocks, you can target 3% due to leverages available that can be as high as 5-10 times of your deposit. Crypto leverages are limited to around 3 times nowadays due to wild price swing.

Cutloss is the same. Trailing stoploss as well. Always protect your profits as trader. We are not investor, we are not going to hold on to the crypto and ride market ups and downs.

 

[Jenxkz]

3 Questions:

Which exchange do you use?

Do you go through each and every coin on that exchange, search that coin on tradingview and then look for the best trade?

Before buying a coin, do you check what's currently going on with that coin by checking forums/media or do you purely look at the chart.

Thanks

 

[honestIM]

3 Questions:

Which exchange do you use?

Do you go through each and every coin on that exchange, search that coin on tradingview and then look for the best trade?

Before buying a coin, do you check what's currently going on with that coin by checking forums/media or do you purely look at the chart.

Thanks

1) I uses Binance/ Bittrex. But Binance interface is terrible and I do not really like them. I also uses CFD brokerage for BTC/LTC/ETH for hedging. Sometimes I do use them for trading ETH or BTC especially when I do not want to convert fiat to crypto. My broker will then pay me in either fiat or crypto.

2) I usually go for hot crypto that has cooled and study their chart pattern. Usually the top 100 coins will give me enough info. This is where I differs from PinguSpy as he/ she is more focus on going for undervalued crypto that are lesser known but gives huge returns. I prefer liquidity over huge gains due to the size of my investment.

3) I do not read the news or fundamentals as all the info that I need are already priced into the chart. The price reflects exactly whatever news that you read unless insider trading is involved. I prefer to keep my trading strategy simple so that I do not suffer from info overload.

For @PinguSpy I think he/she can start a paid newsletter for the amount of analysis that he/she is doing. Definitely not my cup of tea with such amount of work.

 

[Decrypt3r]

Hi @honestIM Is there any exchange that offers stop loss and take profit in crypto just like in Forex?

 

[fly84]

Where did you learn to trade?

Do you know how to read and analyze charts? How about candlesticks?

Can you point us to the right direction on where to learn to trade.

The only thing that I am doing right now and I know that it is very risky is that I put $10k on one crypto when the price is falling down with the "hope" that it goes back up again.

For instance, there is one coin currently trading at 0.018 with the all time high of 0.035. I then checked on the trend and the fluctuation of the price 5 mins, 1 hour, and 1 day ago. If the price fluctuates from 0.016 to 0.025 I will not make a buy and I will wait for the price to go down further but if the price fluctuates from 0.019 to 0.25 then I will buy.

This works all the time at the moment in which a coin bought for $10k at 0.018 and sold at 0.020 gives me $400 profit minus the fees. I know the fees on the platform that I am using are really high but I don't care for now as I am still making money at the end.

Any advice on how and where I can learn to become a better trader? I want to learn stocks and crypto trading the right way.

I will definitely lose everything one day if keep on doing what I am doing right now.

Thank you.

 

[Tamerlane]

Thanks for the interesting info, @honestIM

Although you make it sound easy, I'm sure that it's tough. But I like your approach to not drown in information and simply read the charts.
How often do you check your trades each day? Lots of stories of day traders gluing themselves to their computer screens 24/7, unable to sleep, etc... Do you experience this?
In a similar vein, how often do you open trades? Several times per week?

Finally, in relation to the criteria you described and as an example, would HempCoin (link to charts) be a candidate to buy and hold for 30 days for you, or is there something I'm missing about it? Recently hit a new high, has cooled off a little bit from that high... What do you think?

 

[honestIM]

Hi @honestIM Is there any exchange that offers stop loss and take profit in crypto just like in Forex?

Major exchanges usually provide stoploss but not trailing stoploss. You need to set trailing stoploss manually. Usually I do this through a spreadsheet auto compute. Source: https://www.reddit.com/r/CryptoCurr...there_any_exchanges_that_allow_trailing_stop/

Where did you learn to trade?

Do you know how to read and analyze charts? How about candlesticks?

Can you point us to the right direction on where to learn to trade.

The only thing that I am doing right now and I know that it is very risky is that I put $10k on one crypto when the price is falling down with the "hope" that it goes back up again.

For instance, there is one coin currently trading at 0.018 with the all time high of 0.035. I then checked on the trend and the fluctuation of the price 5 mins, 1 hour, and 1 day ago. If the price fluctuates from 0.016 to 0.025 I will not make a buy and I will wait for the price to go down further but if the price fluctuates from 0.019 to 0.25 then I will buy.

This works all the time at the moment in which a coin bought for $10k at 0.018 and sold at 0.020 gives me $400 profit minus the fees. I know the fees on the platform that I am using are really high but I don't care for now as I am still making money at the end.

Any advice on how and where I can learn to become a better trader? I want to learn stocks and crypto trading the right way.

I will definitely lose everything one day if keep on doing what I am doing right now.

Thank you.

I started learning to trade through paid courses as well as using free sources such as forums. However the best period of time where I gain the most efficient knowledge for trading is during my internship with a proprietary trading firm. Passed my probation period and was offered a contract, but turned it down as the pressure is enormous as a full time trader. If you want to learn real knowledge about trading, learn from those people who are doing this for a living. Prop desk/ bank trading desk are excellent outlets to learn. You will be amaze at how differently they utilize charting from what you learn online or through paid courses.

Conventionally you uses candlestick to identify reversal pattern, whereas I uses price action and uses individual candlestick and assumed support/resistance point to enter/exit my trade. All other signals/ indicators are lagging indicators which means they serve no purposes other than making it the chart looks more complicated than it needs to be. The BIG DIFFERENCE here is that I stick to one way of trading with managed risk exposure. Meaning strict risk/reward ratio. I can have 30% success rate from my trade and yet still be profitable. Compared to a typical trader who needs 70% and above success rate to be profitable. As trader you can only control your reward/ratio. NO ONE can predict the market. Reading material to recommend: A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing [Burton G. Malkiel]

You are trying to target for bottom or lowest price entry point with your strategy. However the issue here is that NO ONE knows the exact bottom. But we do know when a particular coin is getting support and buying pressure. For your amount traded, $10k you really need to be looking at coins with liquidity. With the size of amount traded, you can experience price slippages easily.

Furthermore, what is your stoploss? How much are you willing to lose and target profit has to be at least 2-3 times higher than this amount. This is my suggestion. For crypto always be careful of liquidity.

Thanks for the interesting info, @honestIM

Although you make it sound easy, I'm sure that it's tough. But I like your approach to not drown in information and simply read the charts.
How often do you check your trades each day? Lots of stories of day traders gluing themselves to their computer screens 24/7, unable to sleep, etc... Do you experience this?
In a similar vein, how often do you open trades? Several times per week?

Finally, in relation to the criteria you described and as an example, would HempCoin (link to charts) be a candidate to buy and hold for 30 days for you, or is there something I'm missing about it? Recently hit a new high, has cooled off a little bit from that high... What do you think?

For crypto I only look at the chart 2-3 times a day just to manage the stoploss level. Just a quick glance is enough for me to make a decision.
For forex, I only look at it once a day as trailing stoploss is done automatically through my VPS.
I do not glue myself to the screen the whole day. Once you enter position there is nothing much that you can do anyway except to either take profit or cutloss.
I only lose sleep in the beginning when I first started trading. As you get more experienced, trading becomes second nature.

I trade 5 days a week.

HempCoin is a potential candidate for trading. I have to agree with you. Take a look at IOTA/ TRON/ ARK/ ETH (I have just sold today with around 40% profits). Look out for opportunity to trade with them too.

 

[honestIM]

Just sold NEO with 100% profits. Parking 30% profits from this into TRON. Purchased TRX at around $0.07435.

 

[noelia22]

Initially I uses coinbase to cashout but nowadays I uses third party services as I do not want to pay taxes for my gains. To purchase BTC, you can use coinbase or simply promote CPA offers and get your network to pay you in BTC.

Wold you be so kind to share those third parties that you use to cash out your money without using coinbase please?

 

[iconnek]

I won't advise you to read. Instead apply for an apprenticeship position with proprietary trading firm to learn directly. I was on six month internship with a big firm and learn the ropes starting from the basic. You can learn so much more than what books can teach. The best part is that the learning is free. But you are not compensated with salary as well. You are on profit sharing and if you make three losses straight or end up with losses at the end of the month than you are off the program. Only the fittest survive. High pressure environment and we have to trade without emotions aka behaving like robots.

You made me related to Chris Gadner in the movie The Pursuit of Happyness. So impressed with your strong mindset as a trader. Does your method work with small trades - i.e. too small to cause the big price change on the chart?

 

[honestIM]

Wold you be so kind to share those third parties that you use to cash out your money without using coinbase please?

You can use localbitcoin which is local peer to peer.

You made me related to Chris Gadner in the movie The Pursuit of Happyness. So impressed with your strong mindset as a trader. Does your method work with small trades - i.e. too small to cause the big price change on the chart?

Chris is definitely much stronger mentally that I ever was. He has a rougher startup in life compared to me.
Yes method works with small trade, you just need to manage your greed and be willing to accept losses and move on. The most important thing is to understand the difference between trading and investing. If you invest, you can afford to hold as the fundamental of the entity will eventually prove the market wrong. Whereas trading, when you get a loss, get out fast. Preserve your capital as there are millions of trading opportunities every single day.

 

[iconnek]

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.

How far do you look back in the past to find green candle like Dec 8th?
Look further into the past, do all the conditions above pass on the date I marked in the screenshot below?


Thanks!