Thanks for the insight! I think a lot of the criticisms from others in this thread come from overconfidence. When everything is going up, everybody looks like a genius, and that makes them think they have nothing to learn from your old school thinking.
Interesting bankroll management. I just got started trading on Binance a few weeks ago and I have totally been breaking the 1-3% rule.
Binance
This reminds me of the time when poker was the hype. Everyone thought they were smarter and they could make money and if you had a good general understanding that was true. But the only people that got realy rich, never went banktrupt needed to constantly reinvent themselves, adapt and strategize accordingly.
Great article, thanks but can you give some examples of literature we can read on market trading fundamentals?
Great article.
What resources would you recommend to get started learning the basics?
Investopedia? Khan academy? Youtube?
does anyone have any links or books on technical or fundamental analysis? i am currently trying swing trading
Perfect. Very good guide. I learn to daytrade on my own just four months ago and everything you said applied to the way I trade, the only difference being I trade with 10% of my asset (instead of 3% as you recommend), slowly going up every month as my knowledge and skill grow and and now I'm reaching 50% after 4 months of averaged consistent gains.
Also I purposely put some of my asset aside and trade on a losing/bear market just for practice. So I search for a weak, bleeding alt-coin, and I just trade them trying to make a profit. Gave me a shit ton of experience very quickly as they move differently than a bull coins. For one, there's much lower liquidity, so you can't trade as much. Well, all in all, It's like playing an RPG game and instead of going through the quest one by one you just go straight to the boss for the XP.
Good informative post thank you sir.
Great article, thanks for taking the time to post. As a newbie in the crytpcurrency space I feel like I've learned more about the financial world in the last month than I have over the last few years... it's pretty fragmented though, stemming mostly from googling financial terms that come up in posts such as this one.
Do you have any recommendations for introductory books that cover the basic fundamentals of markets, finance, and economic concepts?
Thank you for the article
[removed]
I know you often hear the general rule of 1% a day, but I would shoot for averaging 10% a month after fees and expenses for traditional trading. Of course, the market you are in makes a difference, whether it be stocks, futures, forex, etc., as well as your personal goals. I was happy with 10% and the occasional good month that went above that. It kept my risk in check as well as my sanity.
I don't day trade cryptos for the most part. I do a few swing trades a week but mostly I hold and just adjust my portfolio if one area is under performing and there are better options at the moment. For example, when Ethereum was stuck around $300, I got out. Once it broke through about $350 I got back in after playing in Bitcoin most of that time.
However, if you did plan on day trading cryptos, you could comfortably shoot for 30% a month averaging about 2-5 trades a day once you were experienced.
I haven't had time to really look into EOS. I was deciding between Cardano and EOS last week and went on to study and take a position in Cardano. However, I like the idea behind EOS and the team is similarly as strong as Cardano. I know some people have brought up issues with how the value of the token is handled, but I haven't researched it enough to give a solid opinion but it has made it to my watch list.
What is your opinion on longterm investments in crypto? Do you think there is a bubble? Even if so, wouldn't that bubble be safe to ride for at least a while?
Long term I believe crypto is a great investment, although specific coins may come and go, even the ones we think are big right now.
As far as being a bubble, yes I do believe it is a bubble but the the psychology behind the bubble is unlike anything I have ever seen. It seems that everyone that takes the time to learn about crypto ends up getting hooked. It makes me think there is a subconscious understanding among even non-technical people that this is going to be a huge and disruptive force in the very near future.
I've invested through other bubbles but this one feels much different. The psychology is different. However, short term I do think we have some bubble-like issues going with a few exchanges, and that will cause some serious market volatility sometime in 2018, but crypto will recover and keep going.
short-term I do think we have some bubble like issues going with a few exchanges
By this I assume you're referring (at least in part) to tether.. What is your opinion on the potential outcome if the rumors are true? I want to think that since tether is most closely used with btc that it would be isolated to disrupting just BTC, but my inexperienced tells me that I'm likely totally wrong.
It depends on which numbers you want to take into account. Currently there are over $1 billion Tethers in the market. Most people think it's not a big deal since the total market cap for crypto is over $500 billion. However, the money coming in to drive that market cap was probably around $6 - $10 billion according to research at JP Morgan.
This would mean if Tethers turn out to be fake money, as much as 1/6th of the rise in market cap could be fake.
As for your question, if this turns out to be true, a few exchanges would probably not be able to handle that type of rapid devaluation.
i think this is because most people equate it to being similar to the tech and internet craze in the late 90s and early 2000s and they dont want to miss out again (i know i do).
like, if we can find the next google or amazon out of this and get in early we can all be rich. i think it really is that simple.
when we look back 10 years from now, im sure there will be at least a few of these coins that survive and we can say, "if had invested just $5k in that then i would be a multimillionaire right now"
How are taxes handled in day trading? Do you pay based on gains for the entire year or each trade?
i think the average equities trader will be pwned by crypto.
Trading is a competition, someone wins and someone loses. On any market you are competing against other traders. Do you think traders in the stock market are competing against dudes signing up on Coinbase to buy $200 of BTC after watching a few Youtube videos..lol
The competition is much higher there, the manipulation is much more subtle. I'm not here to defend the legacy financial system, but there is a lot to learn from it and you'll be a better crypto trader/investor if you do.
Crytpo is new, but they are being traded on OLD FASHIONED exchanges. So all the rules and tricks of the old markets still apply.
you assume that the old tricks are still valid. this is the wild west with crazy shit happening daily in the unregulated 24x7 market. people can get rekt for no reason. I"m sure there are some that have insider info and can move markets, etc. I'm talking about the average professional equities trader.
In the end, i have zero clue. I'd love to be proven wrong that there's a valid process to consistently get returns (much) better than the average.
I don't understand, how will an average equities trader lose out to an average crypto trader? Do they not, on average, use the very same TA? If you ask me, it's all the same.
i think they will all get hosed by the market.
This is all total crap. Unless you have insider information, day-trading is no better than random trading. The fact that you mad money last year day-trading is no indication that you will the following year.
This is of course unless you have something which other people don't have. For example, a faster connection to the trading server, or insider knowledge.
People should probably avoid trading crypto at all. Instead, find some coins that are nearly surefire winners, invest into them and walk away for three months and then check in how rich you are. If you're happy with the development, walk away for another three...
It's vastly more important to not take losses than to chase ultimate gains. Just one loss will brutalize your portfolio, whereas missed gains are just money you didn't get yet.
I would very much agree with your second paragraph. Avoiding losses is the key and that's what I tried to focus on in the article. Day trading is really about grinding out small gains and avoiding huge losses.
At this moment in crypto, the returns are so astronomical that day trading is almost unnecessary, however some will still want to try it and hopefully a little advice can help them avoid big losses while they learn.
At some point the market will cool off though, and effective trading strategies and skills will be needed if people want to keep up their gains. That's why I really hope those that are new to crypto and investing learn as much as they can about the trading aspect. Not necessarily day trading, but trading knowledge will be very important as the crypto market matures.
Unimpressed. Someone who has day traded crypto since June probably has the equivalent of 30 years equity trading experience. First they don't day trade, they trade 24/7, sleeping with one eye open watching the Koreans, Chinese and Japanese, deal with exponentially more volatility where everything is unregulated with massive manipulation, pumps and dumps, etc.
Nobody was trying to impress you. But if you think after a few months you already know everything, you are going to be losing more money than you make soon enough.
Not to mention all these tricks and manipulations you talk about were invented in the "old fashioned" markets and perfected there. There is nothing new about crypto trading that hasn't already been done before.
Finally, traditional markets are 24/7 as well, so that shows how little you really know. People often trade the different sessions around the world as they open.
I'm not here to defend the traditional financial system, but there is a lot to learn since most of what you see in crypto markets has already been done. But if you want to pretend it is all happening for the first time, go ahead.
How does that mean more years of experience? You and I just deal in a market that's more volatile and has less regulations. The backbone's the same, I'm just being realistic.
Crypto beginner here myself and I found this read helpful. It’s intimidating to be in your 30’s and just getting started when others have been going at it for a while and know the lay of the land. If I may ask, what is the best trading platform that allows you to buy/sell from the comfort of your phone?
As long as you have a Stop limit to minimize your losses. Day Trading is efficient if you have a good amount of money to trade. If you don't have much then long term holding is best strategy to use .
What exactly is the "good amount" threshold? Are we talking 10 grand? Or is like 1500 doable
Coinbase and Gdax are owned by the same company and are good platforms to buy and sell BTC, ETH, and LTC. Coinbase is more mobile friendly but Gdax has less fees. For alt coins my go to is Binance they have a mobile app you can download through their website.
GDAX actually has NO fees so long as you are the one sending orders to the book (limit order)
So, just to recap, if I wanted to buy into BTC, ETH or LTC I would use the Coinbase app which seems pretty straight forward. Correct? But as I’m looking at the Binance app it just looks like a ticker. How would I buy XRP or ARK, which are really the two I’m interested in? Sorry again in advance, when I say I’m new to this I literally mean week one day two. Already have HODL downloaded and set up, same with Coinbase.
First thing is to convert your fiat into crypto. Use Coinbase/GDAX for that (GDAX you need to confirm identity and I think that system is still down). Bare in mind with Coinbase they charge REALLY high transfer fee for Bitcoin, but not for ETH/LTC. I strongly suggest if you're going the alt-coin path to consider buying ETH and just transferring to Binance and converting to BTC.
Second step I hinted at, you transfer your funds from Coinbase to Binance exchange.
Third step you purchase your alt-coins with your BTC/ETH.
Fourth (Optional but recommended) step you transfer the coins from binance to a wallet. Note that you're going to get hit with transfer fees for this one, and they can be quite nasty for things like BTC.
With Binance you can buy coins with BTC, ETH, BNB (the binance coin) or Tether. You can’t do a straight cash for coin trade like you can with GDAX on binance so you will have to get one of those to trade for other alts.
I can’t find a Binance for mobile app. Went to their website and clicked to ‘download’ link and it told me this... https://i.imgur.com/JuwqBjP.png ...what do now?
Go here and follow the instructions, I had no problem with it https://fir.im/binance
Also if you do want to sign up and feel the urge to help me out my referral link is www.binance.com/?ref=11562762
:)
If I can ever get on there I’d love to help you out with a referral. Fucking iPhones man.
https://i.imgur.com/WvfbVyk.jpg
That’s a quick fix: Just go to settings—>general—>profile/device management, then click on the developers and click trust
Dude, you’re awesome. Thank you so much for all of the info, this internet stranger appreciates it!
No worries, good luck investing!