Topic: My Comprehensive Crypto Guide – Beating the Market 101 (Read 116 times)

What? Don't marry a project? I can't think of divorcing Chainlink.
However it was an interesting read and I agree with everything except for the one pointed

That is a wonderful guide, perfect job, thank you! However, I cannot believe that limit orders in crypto trading are not being obligated by the fees. Market orders should not be used for sure because of the constant price movements but not because of the fees, imho.

In the end it comes down to a couple of important things. One of which is to take responsibilty for your trades (instead of blaming others for mistakes) and to learn from bad investments/trades. Hope this helps!

Whats up Bitcointalk? I thought my "little" crypto guide could be of use to some of you. Feel free to reach out if you have questions.

The following guide condenses everything I found helpful in gaining an edge over the market. It is, however, by no means intended to be exhaustive; there’s always something new to be learned. Similarly, this guide heavily draws on everything I’ve learned from my mentors. As I was standing on the shoulders of giants, I do not claim to be the original inventor/discoverer of all of this. It also draws heavily from Dr. Steve Brule’s brilliant ideas whom I was privileged enough to get to know. Thank you for everything – you know who you are.

My Comprehensive Crypto Guide – Beating the Market 101

To do well in crypto you should first and foremost understand the “basics.” Once you have covered these, you can gradually advance your level of proficiency. The first part of this guide covers the rough essentials, skip this if you are already pretty experienced. The second part will go into more detail on the advanced strategies.

General rules for crypto investing and trading (the obvious “basics”)

A. Don’t get overly complicated: Focus on swing trades or long-term holds instead of forcefully trying to day trade. A large percentage that gets into day trading will lose money because of it. Similarly, apply the 80/20 rule (Pareto principle) to discover what works best for you and is most profitable and eliminate all the rest.
B. Before entering the markets, always check BTC first: The entire crypto market is heavily dependent on the price movement of BTC. Knowing how it is moving is essential for understanding how alts behave.
C. Don’t try to predict the market, react to it: A quick look into the trading ideas section of Trading View will show you that even the TA experts have a tough time in trying to predict market movements. Instead of trying to forecast movements, focus on trading and investing strategies that flexibly react to the market.
D. Do not FOMO into all-time highs: If you come across an exciting project that is being hyped right now and has already pumped significantly, close your chart and wait for the correction. Set yourself an alert (for instance by using Coinigy.com) for a more reasonable price level and act accordingly once the alert is triggered.
E. Cut your losses early but don’t sell at all-time lows: Ideally you are cutting your losses early on at around 5-10%, depending on your trading/investment strategy. Doing so will help you to prevent selling at local lows. If you didn’t follow this essential rule and are down considerably, consider taking the hit and further holding it – if you profoundly believe in the projects fundamentals. You might have to ignore such a bag for a couple of months or even years but you won’t be one of those who sold BTC at $50 because of a 45% correction. Similarly, it takes nerves of steel not to sell into a dump. Develop the necessary patients to enter and exit during the most profitable moments.
F. Take profits: Take profits early on to increase your profitability and make it a habit to take your principal investment out as soon as you have reached your targets. From this point on, you can either decide to let your “free” coins ride or you can invest at a later stage once the correction is over. There always is a correction. Make sure not to get too greedy. It’s better to sell at a 5-30% profit rather than hoping for unrealistic gains.
G. Not entering a trade is the best decision in ~70% of all cases Try to eliminate investment/trading decisions that are based on emotions. Leave out emotions in general. Have the patience to wait for good entry points. Let the market come to you. Don’t trade because you’re bored. Less is definitely more when it comes to trading. Higher trading activity does not necessarily equal more profits.
H. Know your risk: If you are entering a trade without having defined your risk-to-reward ratio, you will lose money in the long haul. If you know the amount of money you are willing to risk in advance, there will be no emotional decisions and no surprises.
I. Avoid staring at charts all day: This is perhaps the most common source for bad trades. Relentlessly staring at your charts will lead you to become impatient, which in turn makes you come up with all kinds of “signals” that justify entering a bad position.
J. Learn the basics of technical analysis (TA): There is no excuse for not knowing at least the fundamentals of TA. Even if you intend to enter long-term positions, it will greatly increase your ROI. It is a useful tool in your arsenal, use it. “Experts” telling you that TA does not work do so under the presumption that TA most work 100% of all the time, which it doesn’t. It’s an exceptionally helpful tool – among other valuable instruments. More on TA later.
K. Margin trading is a quick way to lose your money: Don’t let stagnating market activity lure you into margin trading. If you have reasonable success with your investing/trading strategy, start with a maximum of 2-5x leverage. Anyone telling you to go beyond 10x is either a trading genius or out of his mind. In general, high leverage margin trading is gambling and nothing else, especially on manipulated exchanges.
L. Use limit orders: Don’t waste money on trading fees and potential profits by market buying. Set limit orders at attractive price levels and have the patience to wait long enough until your order is filled.
M. Understand the nature of stop/loss orders: Crypto is a heavily manipulated market. Manipulators will try to trigger your S/L orders. For this reason, use them sparingly and only when you are unable to follow the market.
N. Never marry a project: There appears to be a pretty intensive rivalry between numerous crypto projects. I’m not a fan boy so I don’t really care whether VET is better than WTC or not – I profited from both of them. Ask yourself if you want to be an investor or a fan. There’s no problem with being both as long as it does not cloud your judgment.
O. Psychology: Understand your own and the market participant’s psychology. Keep emotions out of the equation. Don’t panic during a panic sell – that’s what everyone else does. Instead, apply the most effective strategies or countermeasures during these unexpected market events, for example QFL-style trading (which will be covered later on). Cut your losses once the recovery happens later on. If you closely look at the charts, you will see that dumps of solid projects are usually followed by short-term recoveries that help you to exit with less losses.
P. Market manipulation: Due to lacking oversight and regulations, crypto markets are the most manipulated markets you can possibly invest in. The majority of price action results from whales or their bots playing with you or with each other. It’s not unusual to encounter manipulators that try to get you to FOMO or panic sell so that they can either dump upon you or buy at cheaper levels. To succeed in this game, most investors are best off when buying pre-FOMO while the market is still low. The shorter the time frame of your holding period, the more affected you will be by price manipulation.
Q. Buy low sell high Find attractive entries when the charts show sideways price action or flat price floors. The most dangerous time to invest is during a pump or FOMO rally. Have the patience to miss out on coins that have already gone parabolic if you want to avoid becoming a bag holder.
R. Sell in May and go away (sort of): The period from October to December is seasonally exceptionally strong – not just in the stock markets (since 1896 strength pattern Oct-Dec observable) but also when it comes to BTC. Similarly, June to September isn’t that attractive. Be sure to keep these historical patterns in mind – especially when you decide to trade against them. The probability to lose money while trading against the pattern is higher than to make money. At the same time, in stocks you have more market bottoms occurring in October than in other months. In short, this does not mean you need to exit all markets during specific time periods but it could be helpful to know which pattern has a higher probability of playing out.
S. Beware of traps: Market manipulators may use an accumulation of bullish setups or too much attention on a key breakout area to shake out / trap a large portion of traders. Keep this in mind when you see setups that are too good to be true.
T. Accept that the market is smarter than you: Adapt to the fact that the market is smarter and more resourceful than you are. There’s no point in trying to force your will on the market. Similarly, the market is able to forecast important events astonishingly well ahead of time. When the news breaks, it is more than likely that the information is already priced in.


Technical analysis

TA is predictive not definitive. Most people make the mistake of assuming that TA is 100% accurate (it is not). Once they figure that out, they quickly become disappointed and stop using it altogether. Don’t be like the masses. Incorporate TA intelligently into your comprehensive crypto arsenal. Ignore it at your own risk but don’t become overly dependent on it.  It is an effective tool if applied correctly. Use TA to identify up/downtrends, support and resistance lines as well as the most common and most effective price patterns. Use this information to identify lucrative entry and exit points.

You don’t need to be a TA crack to succeed. The beauty with cryptos is that you can be pretty successful with a basic understanding of TA and a selection of the most powerful indicators/oscillators at your hand.

Focus on identifying support/resistance lines as well as order blocks and make use of volume, trendlines, RSI, sRSI, MFI, Fibonacci extensions/retracements & Bollinger bands. Developing a reasonable understanding of these TA tools will cover you in 99% of all cases. You can include MACD and Ichimoku clouds. Elliott waves aren’t that reliable in my opinion.

1. Every chart tells a story. Learn to read it. Have a look at the volume. Is the volume justifying the current price movement? In general, a pump without volume will most likely not be supported for too long (i.e. prices will dump shortly after). Similarly, a tiny candlestick in combination with a huge spike in volume is a telltale sign of a reversal.

2. Focus on the most effective indicators and the most effective trading patterns. Don’t just blindly rely on indicators that the next random guy on Twitter recommends. Be scientific about your approach. Use only those particular indicators that work the best. Indicator back testing with market data from almost 15 years by Emerald Summit highlights a couple of excellent and highly successful indicators/oscillators:

• RSI (Relative Strength Index): most successful indicator of the study
• RMI (Relative Momentum Index): generates profits with long positions. Not for the short term
• MFI (Money Flow Index): indicator is beating the benchmark with long positions
• sRSI/Stochastics: outperforms the benchmark but not always profitable
• BB (Bollinger Bands): outperforms benchmark for five-day swing trading

Ineffective indicators are:

• SMA (Simple Moving Average): results are worse than random trading => useless
• EMA (Exponential Moving Average): generates substantial losses
• CCI (Commodity Channel Index): generates losses
• MACD (Moving Average Convergence-Divergence): low levels of successfulness
• TRIXS: generates losses
• Parabolic SAR: poor results

CMO wasn’t tested but I like it as well. I wouldn’t necessarily exclude SMAs/EMAs because of these results – they are still valid for identifying support and resistance levels.

3. Compare a chart’s different time frames. Start with the daily timeframe and work yourself towards the shorter time frames. In general, it’s not a good idea to enter positions without checking multiple time frames first. The daily chart gives you an excellent overview. 1h-4h time frames are excellent for entering swing positions. 5m-15m should only be used for discovering the optimal entry/exit points, if it all. Anything below 1h is not going to be of much help to the majority of traders/investors. In case you’re tired of clicking through all the time frames on Trading View: I am using crafty bots on Discord to help me check the various time frames at a glance. Invite link to access my Discord crypto dashboard and for using these bots for free can be found at the bottom of this guide.

4. Develop your TA skills by actively drawing charts and/or monitoring indicators. Share your strategies with like-minded and experienced individuals and listen to their feedback. Do some back testing to improve your accuracy and to identify mistakes.

5. Learn from the pros by reading or watching their TA analysis. More on this later on.
Market information and signals

Information is key. Gain access to a stream of quickly accessible and high-quality crypto information sources or signals. Differentiate between information for the masses (mainstream media etc.) and information for the classes to filter out the former. Professionals in this area do not rely on news narratives for their decision-making. Instead, they look at the hard facts, price action, a project’s fundamentals etc. Use the information streams you have available to develop a feeling for the current market sentiment. At the beginning, I was switching from Reddit to Twitter to YouTube to Telegram to Medium in combination with email/SMS alerts and a couple of other services, which is quite tiresome.

Later on, I’ve built my personal crypto dashboard on Discord where I have everything in one place – from all the Twitter influencers and YouTubers to the most helpful indicators, bots and signals. I’ve created specific Discord channels for each influencer/signal provider. New posts are highlighted, so I no longer have to check all the different platforms. I rarely leave Reddit/Discord these days. Saves me a lot of time and helps me to focus on what is really important: making investment and trading decisions.
Originally, I was using the dashboard that I’ve built only by myself but a couple of my trading friends convinced me of opening it up to them and others. You can build your own Discord crypto dashboard if you’re technically skilled or join our community, invite link can be found at the end of this guide. Discord has become a crucial aspect of my crypto journey so I would recommend anyone to look into it and to possibly build such a dashboard for yourself if you are inclined to do so and have the necessary time for it.

1 Twitter influencers: In general, Crypto Twitter is highly irrational, short-term oriented and either obsessively bullish or pessimistically bearish. Be prepared to get manipulated. I skim through the tweets of a couple Twitter personalities (~ 5 mins) to quickly gain a feeling for the market sentiment. Amongst them are Edward Morra, zyzz, ThinkingUSD, Gordon Crypto, Crypto Rand, Crypto Cred, Eric Choe, Cryptodonald, Peter Brandt, Trace Mayer and Coffee. Twitter is excellent for gaining a microscopic (!) perspective on the present market conditions. We’ll use other tools for the macro perspective. Filter drama and unnecessary discussions/comments as much as possible. Create a Twitter list with your most favorite influencers or use Discord to integrate them all in one place like I do, which has the advantage that you can filter out replies/comments and retweets.

2 YouTubers: YT is excellent to familiarize yourself with the different approaches and methodologies of experienced investors/traders. Next to Twitter, YouTube adds a broader and more nuanced perspective to your market information arsenal. The analysis you can find on YT is more detailed and less opinionated. I like Alessio Rastani, Josh Olszewicz, Tradedevil and The Chart Guys. Quickfingers Luc is excellent for QFL-style trading. “In it for the Money“ is a great microcap picker during bull markets. Philakone has useful tutorials for daytrading and swing trading but I don‘t trust him. Crypto Cred has great tutorials as well. Watch videos at 1.5x speed or faster. Know that certain influential YouTubers have been caught in market manipulating activities. Use YouTube subscription alerts to get a notification when a new video has been released. Discord is also excellent for following these YouTube influencers without clustering your YouTube feed.

3 Telegram: Some excellent analysts can be found on Telegram. This medium allows you to add a more detailed perspective on the markets to your portfolio – generally with a longer timeframe in mind. I found the market analysis by Bitcoin Bravado and CC insider to be pretty useful. Alan Masters has an interesting channel as well. There are some more like CryptoSamurai1, cryptocue, cryptobullet and coinguru1113 but the former two should have you covered in the beginning. You can pin around five Telegram channels in the app. If that isn’t enough for you (it isn’t for me), I highly recommend using Discord even though this one is a bit more difficult to set up. Let me know if you need help.

4 Long/Short: The Long-Short ratio gives you a good feeling of the market sentiment. If the majority of traders are long, it indicates bullish tendencies in the market. Similarly, sudden changes in the ratio indicate changing sentiments. In general, when short interest hits local highs (or even record highs), it’s an indication that we are close to the bottom. You can use Trading View to compare the charts. I found it easier and faster to simply use the margin-bots that I have available in Discord, they show me percentage changes in the Long-Short ratio so I can directly compare both instead of skipping from one chart to the other.

5 Mainstream media: CNBC’s Fast Money is an excellent counter indicator. If you don’t believe me, compare price action after bearish/bullish tweets. You’ll be surprised at the accuracy of this counter indicator. As a general rule of thumb, mainstream news sources are intended for the masses not for the classes. Both extremes of public opinion (excessively bearish or bullish) are contrarian signals for us. Extreme pessimism can (!) be a bullish sign and extreme optimism can (!) be a warning sign. It is one signal that we need to factor in with other hard facts.

6 Cryptocurrency calendars: coinmarketcal.com and cryptocalendar.pro are useful to check upcoming events of a variety of different projects. I have them all in one channel and skim through it regularly. Usually, the market behaves according to the principle “buy the rumor, sell the news” meaning that many investors will take profit once the news has broken. Be prepared to get dumped upon at the announcement of the news, for instance a mainnet launch whose date was publicized long before. The following correction is a great opportunity to buy the dip btw.

7 News aggregators: cryptopanic.com is excellent for skimming the most important headlines. It may be a good idea to aggregate a couple of sources to prevent bias.

8 Tether print alerts: Newly printed Tether and the movement of large sums of it indicate or at least hint at significant market activity in the short term.

9 TradingView trading ideas: I’ve created my own channels for the top 10 cryptocurrency analysts on TradingView. It should also be possible to receive their latest trading ideas by following them on TradingView but that’s not my preferred way of doing it. I found it helpful to read through their trading ideas and to read their opinions. Try to profile each trader and categorize their ideas/recommendations accordingly. Some are great at market analysis while others have interesting short-term trading ideas.

10 Reddit/4chan/Medium: Not much needs to be said about this point. Filter out the garbage and use the occasional pieces of gold to your advantage. I’ve got feeds for each of the three. To put it bluntly, I don’t care about a rivalry between the individual platforms and who thinks is smarter or who has the better users. There will always be personal preferences not only on the three mentioned above but also on YouTube, Twitter, telegram, twitch etc. Every source has its advantages and shortcomings.

Learning materials

There’s always something new you can learn. Use boring market periods to hone your skills.

1. Take the free trading course at Babypips. com/learn/forex. It is centered on forex but also applies to crypto as well. If you’re short on time, follow the program at least to the “undergraduate freshman” level.

2. DataDash has created some excellent instruction videos for learning the basics of TA and fundamental analysis. Go through his videos at 1.5x speed. Beginner level: https://www.youtube.com/watch?v=RQtvpNYtLfw, Intermediate: https://www.youtube.com/watch?v=pYWdrn3JD40 and Advanced: https://www.youtube.com/watch?v=zBjbyew6oyc

3. CryptoCred’s technical analysis lessons are pretty helpful as well: Google document with his lesons: https://docs.google.com/document/d/15c3rN15rkXldY8Te3GDG4NG7noaaoikydOoZQlElwXw/preview

4. Books help you to increase your understanding of market dynamics. Essential reading materials are:

• Mark Douglas: Trading in the Zone & The Disciplined Trader (psychological preparation)
• Jack D. Schwager: Market Wizards on psychology from interviews with pro traders
• Thomas Bulkowski: Encyclopedia of chart patterns

5. Deepen your knowledge on specific trading sites such as forexop.com/gettingstarted/

Resources and tools

Let’s have a further look at some of the most useful tools available to you.

1. Coinigy.com is a great tool to monitor cryptocurrencies. It uses the charting functionalities of Trading View and its API while providing a couple of other helpful functions such as order book preview etc. You can also use it for price alerts. If you don’t want to purchase the premium version, simply renew the 30 day trial. I don’t use its API access for trading but many do.

2. tensorcharts.com is a must use tool. It’s slightly complicated to set it up and to read the charts properly, but once you do understand its functionality, it’s pretty valuable. Basically, it helps you to find support and resistance levels based on buy and sell orders. TC allows you to quickly identify areas in which there are significantly less buy/sell orders, which means that the price is more likely to cut through these ranges without much resistance. Many analysts rely on horizontal/vertical resistance lines but they often overlook orderbook data.

3. qft.hodloo.com is excellent for identifying support areas. You can use it in combination with a trading method called QFL, which will be further explained in the following.

4. Bitgur and its various pages are exceptionally useful in my opinion. I mostly use bitgur.com/map, bitgur.com/chart/interest & bitgur.com/ig/btc-market-overview. The heat maps are excellent for quickly spotting unusual movements that you can base swing trades on. The other pages are pretty helpful for gaining an overview of the market. Be sure to regularly check bitgur.com/chart/interest – it shows you futures sentiment by trader category (professional investors versus retail investors). Be skeptical when the difference between fund/retail sentiment is significant.

5. Crypto twitter user “Zyzz” has build a helpful tool for detecting volume changes in the markets, a link to it can be found on his twitter profile twitter. com/CryptoZyzz. A couple of paid signal providers appear to be using this or something similar. In general, this tool helps you to spot coins with significant volume changes, which indicate sudden price movements

6. rsihunter.com is excellent for everyone that uses RSI for technical analysis. The website helps you to identify the most attractive trading opportunities based on RSI. In short, this means you can identify oversold/overbought coins that have a high potential for a local trend reversal.

7. Cindicator is excellent for gaining the most representative statistics on market sentiment available as of now. Whether or not it should be used for trading decisions is open to debate. I purely use it for market sentiment analysis. Also, don’t forget that basically anyone can participate in the surveys – it is not limited to experienced analysts. Formulate your decisions accordingly. Still, it is astonishingly accurate and is therefore something to at least factor in with a range of other facts.

8. athcoinindex.com and/or livecoinwatch.com for comparing a coin’s present value to the ATH or ATL (all-time high/all-time low).

9 coingossip.io & chantiment.com: Both of them are wonderful tools to identify which coins are talked about the most on Reddit/4chan/Twitter. 4chan loves Chainlink, Reddit likes Nano. Be mindful about these biases. Also, use these tools to catch sentiment changes.

10 Fear and greed indices: alternative.me/crypto/fear-and-greed-index/ is useful for getting a glimpse of the current market sentiment. Both extreme fear and greed can signal buying or selling opportunities respectively.

11 Bitmex position calculators: if you’re trading on margin, using one of the freely available anti-liquidation tools as well as position size calculators may be a good idea.

12 Bitcoin NVT Signal: quite possibly one of the most effective indicators you could have used up until December 2017. A couple of us are testing a new hypothesis regarding this indicator (as it’s reacting unusually) but it’s too early to speculate openly about it. Keep watching it but be skeptical about it for the time being.

13 cryptomiso.com: check the Github commit history of projects that you think are interesting. You can gain some great insights. Keep in mind that some projects may be developing their code in secret.

14 onchainfx.com is excellent for having the most important statistics and figures in one place. You can sort projects based on customized columns, which can lead to pretty interesting insights.

15 Spreadsheets: there are a number of helpful spreadsheets that you can make use of for all kinds of different purposes. A collection of free and basic spreadsheets can be found here: forexop.com/excel-downloads-strategies/. Those are neat as well: Portfolio tracker:https://www.reddit.com/r/CryptoCurrency/comments/7m3nvy/ive_created_an_excel_crypto_portfolio_tracker/ & Financial Modeling for Cryptocurrencies:https://www.reddit.com/r/CryptoCurrency/comments/7kgk29/financial_modeling_for_cryptocurrencies_the/.

16 Portfolio tracker: coin.fyi (free).

ICOs and fundamental analysis

Both subjects are related so I‘ll cover them for the sake of brevity in one subitem.

Most investors are staying out of ICOs for the time being because the market simply is not attractive enough. That’s why it’s so important to have a couple of strategies at your disposal you can apply to changing market circumstances.

Once ICOs gain more traction again, use icoalert.com, icobench.com, icodrops.com and concourseq.io to identify attractive and hyped projects.

1. Token economics: Your success with ICO’s largely depends on the deal you get. From an investor’s perspective, there’s no point in investing into a promising project if the token economics are not favorable for you. Many retail investors overlook this important data set. I use a modified spreadsheet similar to the one Ian Balina is using. (Personally, I’m not following him for various reasons). If there’s interest, I can make this spreadsheet available. Have a look at the circulating supply and the total supply. If the percentage that is for sale is far below 50%, it is one red flag. Projects have gradually decreased this number over time ofc. Have a look at the market cap and calculate the market evaluation (= total supply x price per coin). Compare the evaluation with related projects. If the market cap or evaluation is significantly above the ICO stats of competitors, you have another red flag. Similarly, have a look at the largest bonus. If the percentage is higher than 20%, you can expect some considerable dumps during exchange listings, depending on the project.

2. Social metrics: having a great community behind a project is essential. However, be aware that many projects are heavily faking their social metrics. Take some time to gain an understanding on whether or not the numbers are faked. It wouldn’t be the first time that I discover a team buying telegram/twitter followers before starting their promotions. Luckily, this can be easily identified.

3. Find a couple of analysts that you trust: Influencers can make a lot of money by advertising projects. Try to filter these influencers and projects out. Your investment decision should not be largely dependent on influencers but on your own research. Use these analysts to identify promising projects and hyped coins. Personally, I find the analysis by Coin Crunch on YouTube to be unbiased and insightful – even though they haven’t always been spot on. Try to find out which projects Suppoman & co. are shilling at the moment.

4. Make use of ICO rating aggregators: These aggregators are excellent for gaining an overview of the different ratings from ICO analysts. In my opinion, aggregators are powerful tools as they help you to identify well-received projects. Spreadsheet 1:https://docs.google.com/spreadsheets/d/e/2PACX-1vQJueRnl_Tr53m5OkPV-BBLYszoEKTf33U5SrVoCiKl8Kr2Bhk_BRs0TlhVt5ExiF5lF2KDtd7cUHVJ/pubhtml & Spreadsheet 2:https://docs.google.com/spreadsheets/d/1d-rmuXPPdb_47i0WwD1KhPLg3goMRT1A3S1veOVjreE/editgid=0

5. Real-world usage: Is the project solving a major problem? Is there a need for the project? Could the intended solution be also accomplished without using a blockchain? (Major red flag). Does the team have a strategy for monetizing their solution?

6. Read the whitepaper: I cannot stress this enough. Ask yourself if the whitepaper is logical and sound. Is the team able to communicate its mission/vision or are they trying to hide behind elaborate and overly technical terms?

7 Capable team members: Existing expertise in the industry? Successful track record of previous projects? Experience with building blockchains? Advisors with connections or other valuable assets? Team members with a sound marketing background? -> If too many of these questions can be answered with a “no,” it should raise some considerable red flags.

8 Project type: make it a habit of identifying which type of project is currently performing significantly better than the rest. For instance, blockchain & cryptocurrency projects have been outperforming apps and services.

9 Skepticism/critical thinking: try to develop a nuanced approach to evaluating the prospects of an ICO. Make it your goal to come up with as many reasons not to invest as possible. It will help you to avoid unpleasant surprises later on. Similarly, don’t just read ICO reviews to reaffirm your present opinion (conformity bias). Instead, seek for analysts and reviewers that are critical in nature and have a knack of identifying a project’s drawbacks.

Flexibly use different effective trading/investing strategies (for instance QFL)

Discussing every possible trading strategy out there would go beyond the scope of this guide. The short version is this: flexibly adapt your strategies depending on the underlying market circumstances. Always be on the lookout for new strategies you can integrate into your arsenal to round off your investing/trading approach.

One strategy that has proven itself to be an excellent tool during panic sells is the so-called QFL trading methodology. It is a fantastic way for both beginners and experienced traders to profit from panic sells in the market. The strategy is more complex of course but can be summarized by the following: Invest a specified percentage of your allocated budget at key price levels around 10% below a base during a significant panic sell in the market. If it goes lower, allocate more of your budget. Set sell orders for the short-term recovery.
Really, it needs more explaining than that so check out Quick Fingers Luc videos on YouTube and/or his discord community which is linked in his YouTube channel if you’re interested in the strategy.

Personally, I’m using some scanners to identify attractive price drops and to quickly respond to the market’s behavior.

Miscellaneous

1 Understand BTC seasonality: Assets tend to follow seasonal patterns. BTC is no exception from this. Taken on its own, market seasonality is useful but if you combine it with the other hard facts at your disposal, it can be pretty helpful. When looking at BTC price action during the last eight years or so, you can clearly see that June-October is the least attractive time period because of its downward action. Something you may wish to keep in mind.

2 Predefined trading routines/rules: It’s highly recommendable to have a set of investing/trading rules that you strictly adhere to. Personally, I’ve got a checklist (ranging from technical indicators to market sentiment and a project’s fundamentals) that I go through before I consider entering a long-term position. Similarly, I use a quick trading cheat sheet before entering a short-term position. Doing so will help you to leave emotions out of the equation and standardizes your investing/trading based on proven and effective metrics.

3 Be willing to adapt your bias/opinion: Trading and investing is not about sticking to your opinion indefinitely once you’ve made up your mind. Investors/traders that are permanently bearish/bullish will lose money in the long term. Forgive yourself for being wrong but make sure to never stay wrong for too long. Skilled traders are extremely flexible and adjust quickly if necessary.

4 Understand the difference between following/coping others and gathering information: The reason why I’m skimming through Twitter and why I read analysts’ opinion on the market is not necessarily because I intend to follow them to a T. Instead, I use the information to prevent conformity bias and to make myself aware of things I would otherwise have overlooked.

Closing remarks

Use the information you have available to understand the current market sentiment (bearish/bullish). Don’t place too much emphasis on other people’s opinions but focus more on developing your own skills. Whether or not to invest should always be based upon your own analysis. Don’t stare for too long at price charts and focus on the longer time frames. Never forget that most investors/traders are more successful with swing or long-term trades rather than day trades.

I’ve given you a couple of pretty effective tools that you can utilize to your advantage. However, what is really important is to actually apply what you have learned and to continuously keep improving your skillset.