[Trading Method] Simple strategy that I use for trading crypto
- Thread starter honestIM
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honestIM
Power Member
- Jan 15, 2017
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I am a trader. Not investor. The concept of crash does not apply to a trader. Think of it this way, i am just a currency exchanger, the movement of USD either increase or decrease my profit margin.
I personally do not invest long term into crypto for reasons I have mentioned many times.Remember to make it clear and differentiate if you are investing or trading. If you confuses or mix these two, it will not end up well. For trading do not expect huge profits gain for crypto like what @PinguSpy is making. I am comfortable even with a 30% ROI. So mange your expectation.
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wokaka
Senior Member
- Apr 1, 2010
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hodling period of 30 days do not work for me. sometimes you need months before you see large gains. i was hodling TRX for 2 months before I earned 20x of my initial investment. I also needed few months before I could see large gains from XRB. personally I always wait 3 months before I give up on the currency. 30% cut loss also do not work for me as majority of cryptos can easily lose half of their value but they regain back their losses within weeks (look at BCH recently or ETH in mid 2017). if you are so concerned about risk management, just deposit less amount of money. for example: instead of depositing $10K, you deposit $5K but you allow yourself to lose more than 50%
honestIM
Power Member
- Jan 15, 2017
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Erm, I think you are coming from the view point of investing. Pardon me but for trading it works very differently. See, for traders we only want to trade what is in trend and offering a steep discount so that we profit from reselling. Yes, we can be wrong at times, which is why we have a 30% stoploss in place. 30% stop loss is not cast in concrete. Different traders uses different level of risk exposure. It all boils down to personal preferences. For crypto, 30 days should be the max trading period. Let me quote you an example.
Assumption case (not real)
Scenario 1:
Trader A trades 5 times a month making around 150% a month (30% ROI per trade gross profit)
After 3 months, the ROI is 450%
During market correction, if 30% cutloss applies, the remaining capital can be recycled into crypto at discounted price thus netting a higher profit potentially.
Scenario 2:
Trader B trades once every 3 months. Making 450% ROI.
During market correction, capital are stuck as trader B needs to wait for recovery before making money,
Between 30% ROI and 450% ROI, tell me, which one is easier to achieve?
From the case that you quoted, from investment point of view you are definitely correct to hold. But from trading perspective, unfortunately I have to debate slightly with you on this as I want to raise the importance to this community to differentiate between investing and trading. NEVER MIX these two together as you can easily lose a lot of money. I do not invest into crypto because I do not know how to compute the residual asset value but I am certain there are talents out in this community that know how to valuate crypto and investing long term into it.
honestIM
Power Member
- Jan 15, 2017
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Happy New Year Everyone!
With regards to profit and luck. I won't disregard the luck factor here but just to clarify I am a trader and trading currency/stocks for more than 10 years. So I do have the credentials to talk about trading.
The study of candlestick and chart is not about predicting price. It is about understanding the current market supply/demand strength. No one can predict prices based upon charting alone. By bidding or buying when there is a demand, you min the risk of losing money and increasing your odds of making money. This is trading. What you understand about investment does not apply to trading. For investment, i never ADVOCATE ANYONE TO INVEST LONG TERM INTO CRYPTO. As I never invest long term into them.
P.S: Btw,just bought NEM at $1. Looking at 30% profits at least if more, then good.
badd
Regular Member
- Jan 22, 2008
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Great explanation above honestIM.
Can you describe a bit more how you use the candlesticks to understand the market demand/supply?
I cant seem to get into a crypto trade at the right time. For example, the market has been on a downward trend with 5 red candlesticks, I assume the market is due an upward trend due to the previous 5 red sticks (my trading method) and I get in hoping for an upward shift. However in some cases, this doesnt happen and the market continues to slide downwards. How can I improve my analysis in judging the right time to buy for crypto trading?
Can you describe a bit more how you use the candlesticks to understand the market demand/supply?
I cant seem to get into a crypto trade at the right time. For example, the market has been on a downward trend with 5 red candlesticks, I assume the market is due an upward trend due to the previous 5 red sticks (my trading method) and I get in hoping for an upward shift. However in some cases, this doesnt happen and the market continues to slide downwards. How can I improve my analysis in judging the right time to buy for crypto trading?
honestIM
Power Member
- Jan 15, 2017
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You are anticipating for a reversal in trend. With your method, you are moving ahead of the market in anticipation. I used to do this when I begin my trading career much earlier on in my life. However I realized that it was impossible to time the market for perfect reversal entry. Ended up losing a lot of money as stop loss are constantly hit. When i do not place a stoploss, it is even worse as the losses can accumulate greatly and I have to wait for a long time before market recovery happens. I ended up with losses on swap.
Nowadays I prefer to see some evidence that the market reversal has happen and this can be seen from the candlesticks. Usually it requires about 2 candlestick to confirm that a reversal has happen. You end up with lesser profits amid a better reliable trading setup. Note what I am doing here is price action trading, not so much on the study of candlestick (Hanging man, morning star, etc). This is the same method that some proprietary trader are using while others are focused more on the quants. Here is the job link showing that job for prop trader exists and not a myth in case you think that I am just talking rubbish here. https://www.indeed.com/q-Proprietary-Trader-jobs.html
Max of 30 days, but it is up to individuals risk exposure level. For crypto I don't earn any interests nor dividends thus I think trading them suit me better than holding.
Updates on my trading:
- POWR (Purchased at around $0.8, sold today at 1.30 - Gross Profits around 60%) - $12k
- STELLAR (Purchased at around $0.235, sold yesterday at $0.52 - Gross Profits around 120% ) - $24k
- TRON (Bought at 0.035, sold today $0.057 - Gross Profits around 62%) - $37,200
- Steem (Bought at $1, sold today $5.50 - Gross Profits around 500%) - $80k
Edvard Benk
Senior Member
- Aug 4, 2016
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Yo lmk when u make a pick so I can jump in too lmao
StormClaw
Elite Member
- Oct 24, 2010
- 2,897
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This is just fantastic ROI, Thanks for posting your success, this will definitely motivate many in this forum including me, I knew I'm late to the party, But I'm doing something similar to what you have done already.
@honestIM Can you please explain, how do you keep a track of the coin purchased value, identifying the increase in cost and right time to sell (Because most of the folks will be greedy to wait, wait and wait, maybe till it hits $100 or so xD)
honestIM
Power Member
- Jan 15, 2017
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Erm I will rather that you follow tips from @PinguSpy as he/she is more of an investor. I do post some of my trades here in advance such as TRON which was posted two days ago before any price movement. But note I am trading so losses can happen as well and I do not hold for more than 30days. Do not just look at my profits blindly.
Well not as good as @PinguSpy ROI anyhow. But good enough for me.
Current pricing on crypto is really high so do be very careful. Remember losing 30% is nothing compared to losing 90%. And what goes up easily can go down equally hard as well.
Edvard Benk
Senior Member
- Aug 4, 2016
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Lol forex trader here. Never got into crypto, but I'd love to just see what and how you do for personal reference. Still staying away from alt coins though cuz it's very reminiscing me of penny stocks. But algo trading is gonna be sweet.
honestIM
Power Member
- Jan 15, 2017
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Algo will be hard for crypto due to huge spread and cost of financing as well as liquidity issues. If HFT were to get involved (which I assume eventually will happen) it is going to create flash crashes that simply wipe alot of peoples money from the crypto market. What works for Forex works for crypto except a few things below.
1) Unlike forex, there is no central bank interferences which means usually the trend is loop sided and move in a singular direction. For forex after moving up 100+ pips, you can expect a bit of correction. Whereas for Crypto, it can go real crazy.
2) Liquidity issue. Especially when you enter a large size position. As you know, we traders do not want to be the one moving the market price. We just want to leverage upon the pricing to profit.
Which currency pair do you trade with? I am on GBP/USD, USD/JPY, GBP/JPY (high volatility)
Any change you could explain bit more about '2 candlestick' or maybe you can give some more examples please?
Edvard Benk
Senior Member
- Aug 4, 2016
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Same + CAD and NZD pairs.
Just got cucked with AJ longs cuz of Japanese strength #fml
hero76
Elite Member
- Oct 20, 2016
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Okay see where you mentioned 30 days but those results dont seem typical of a couple of those coins. I own tron as well and it hit .035 on december 15th. I would hold longer as right now it is on the all time high of .078 and poised to grow more. I think youre buying and selling within a 14 day period which is really short.