IG Professor
BANNED
- Feb 22, 2017
- 4,855
- 4,567
As you guys already know, I am pretty active here in the cryptocurrency section for the last few months.
From time to time I am dropping one or two projects that I believe in. However, the key to consistently profitable trades is in education.
Today I will share some of my own trading rules.
First of all, shitcoins are trends. and usually, trends not lasting for too long. so before you get married with a coin - remember that there is a good chance that you will get rekt once the trends have been passed away
With that being said, ALWAYS take profits once you are profitable. each individual has his own 'profitable' exit. for some, it could be 5% and for others it could be 20 or 50%. to here or to there, you have to decide which one is enough for you and stick to it EVERY TRADE.
Risk management
As a day trader, you want to learn about risk management. risk management skills are the KEY to your successes.
It's not fun and it will make your buy-ins more robotic, however, if you want to protect your funds, and making consistent gains you should consider mastering that specific skill.
Can u give me an example of risk management?
The whole concept behind risk management is to protect your current holdings.
EG : X go to the bank and asked for $500,000 Loan. X is planning to invest all of that 500 K into Bitcoin.
What should X Do?
1. Buy Bitcoin with the whole budget. (Wrong)
2. Spreading his buy orders (Right)
Example: BTC price is highly volatile: You can buy 1 BTC at 60K and a day later, it will worth 50K. Because of it :
I will first buy BTC with $250,000 (50%) and see where the winds are going. once I see that BTC dropped by 10-15% I will place my second buy order. and if it goes up, I will simply let it sit in there until I can set up a discounted entry. (15 / 20 %)
When we are Using that method we are able to recover the losses from our first BTC entry if the coin gets down. It's called https://www.investopedia.com/terms/d/dollarcostaveraging.asp.
How should I manage risk while I am day trading?
Wrong Strategy : I have a balance on Binance exchange of 2000 USD. Today I decided to start day trading. Once I am interested in a specific coin I will buy it with my whole portfolio equal to $2000, total.
Right Strategy : I have a balance of $2000 on Binance. I will not put my whole portfolio into 1 coin. I will simply take out 10 or 15% of my total capital ($2000) and use that to buy the coin that I want.
> Precentages out of $2000
~ 10% > $200
~ 15% > $300
~ 100% > $2000 > Make sense to risk your total capital per coin?
What are the logic behind this strategy Professor?
even if you get 10 profitable trades making a killing - buying with your whole portfolio ($2000) at some point you will get rekt. Because it requires only 1 Losing trade for you to lose 100%.
However, if we use only 10% from our portfolio we will be required to lose 10 trades in a row to wipe out our capital completely.
Rules
Your set of rules is everything. Let's say for example that I decided to buy Ethereum. a day later I am checking my holdings and see that I am 400% UP. Some people will keep holding while some ppl will have different plans. EG :
Two types of peoples
Type 1 : I am over 400% in profits. I should sell now before it gets down. (Connected to reality.)
Type 2 : I have gained over 400% in just a few days! I should keep holding. It only goes! (Oforia.)
We want to avoid those Type 1 and 2 conflicts because it's affecting our decision-making while we are trading. So, before I am setting up my next trade I will first decide where I am exiting. because without a proper exit plan I can hold the coin forever.
Until here it was my day-trading strategy. Now, if you are seeking a long-term investment then those rules should not be applied to you because you just drop a bag of $ so you can cash out 3 or 4 years later. This is a solid strategy too.
The Circle
Now that we got the basics of crypto day-trading we want to understand how the crypto market is working from 10 to zero.
From time to time I am dropping one or two projects that I believe in. However, the key to consistently profitable trades is in education.
Today I will share some of my own trading rules.
First of all, shitcoins are trends. and usually, trends not lasting for too long. so before you get married with a coin - remember that there is a good chance that you will get rekt once the trends have been passed away
With that being said, ALWAYS take profits once you are profitable. each individual has his own 'profitable' exit. for some, it could be 5% and for others it could be 20 or 50%. to here or to there, you have to decide which one is enough for you and stick to it EVERY TRADE.
Risk management
As a day trader, you want to learn about risk management. risk management skills are the KEY to your successes.
It's not fun and it will make your buy-ins more robotic, however, if you want to protect your funds, and making consistent gains you should consider mastering that specific skill.
Can u give me an example of risk management?
The whole concept behind risk management is to protect your current holdings.
EG : X go to the bank and asked for $500,000 Loan. X is planning to invest all of that 500 K into Bitcoin.
What should X Do?
1. Buy Bitcoin with the whole budget. (Wrong)
2. Spreading his buy orders (Right)
Example: BTC price is highly volatile: You can buy 1 BTC at 60K and a day later, it will worth 50K. Because of it :
I will first buy BTC with $250,000 (50%) and see where the winds are going. once I see that BTC dropped by 10-15% I will place my second buy order. and if it goes up, I will simply let it sit in there until I can set up a discounted entry. (15 / 20 %)
When we are Using that method we are able to recover the losses from our first BTC entry if the coin gets down. It's called https://www.investopedia.com/terms/d/dollarcostaveraging.asp.
How should I manage risk while I am day trading?
Wrong Strategy : I have a balance on Binance exchange of 2000 USD. Today I decided to start day trading. Once I am interested in a specific coin I will buy it with my whole portfolio equal to $2000, total.
Right Strategy : I have a balance of $2000 on Binance. I will not put my whole portfolio into 1 coin. I will simply take out 10 or 15% of my total capital ($2000) and use that to buy the coin that I want.
> Precentages out of $2000
~ 10% > $200
~ 15% > $300
~ 100% > $2000 > Make sense to risk your total capital per coin?
What are the logic behind this strategy Professor?
even if you get 10 profitable trades making a killing - buying with your whole portfolio ($2000) at some point you will get rekt. Because it requires only 1 Losing trade for you to lose 100%.
However, if we use only 10% from our portfolio we will be required to lose 10 trades in a row to wipe out our capital completely.
Rules
Your set of rules is everything. Let's say for example that I decided to buy Ethereum. a day later I am checking my holdings and see that I am 400% UP. Some people will keep holding while some ppl will have different plans. EG :
Two types of peoples
Type 1 : I am over 400% in profits. I should sell now before it gets down. (Connected to reality.)
Type 2 : I have gained over 400% in just a few days! I should keep holding. It only goes! (Oforia.)
We want to avoid those Type 1 and 2 conflicts because it's affecting our decision-making while we are trading. So, before I am setting up my next trade I will first decide where I am exiting. because without a proper exit plan I can hold the coin forever.
Until here it was my day-trading strategy. Now, if you are seeking a long-term investment then those rules should not be applied to you because you just drop a bag of $ so you can cash out 3 or 4 years later. This is a solid strategy too.
The Circle
Now that we got the basics of crypto day-trading we want to understand how the crypto market is working from 10 to zero.
- Market Makers: Those who hold a huge amount of specific coin and are able to affect the price with 1 sell order.
- Telegram Groups: Those groups on Telegram with over 100/200k people. Usually, getting contacted by Whales to pump their holdings.
- Twitter influencers: Those accounts with up to 100 - 200k followers: Can easily affect the prices of any low market cap coins.
- Youtube influencers: Getting paid to review specific coins, usually. Not all of them But, most.
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( if the market is moving)