29 Nov - 07 DecTotal return: 132%
Coins: BOOM
Traders can be divided broadly into two classes – those who are successful and those who are unsuccessful. The successful trader when compared with the total number of participants in the Crypto markets, is the minority. Even in a bull markets, the only market in which an unskilled participant will trade freely, they tend to lose money. They approach the market with confidence, score an initial success and then lose all forms of discipline and structure to their trading. Failure is often the result. You have to be aware that, as a novice, you have no business trying to catch momentum trades or “scalping” quick profits by dipping in and out of coins. By doing that, all you are doing is over-trading. You see, despite what you have come to believe about trading – it isn’t those that sit in front of their computer all day, firing off trade after trade who make lump-sums of money. The ones who hit it big, week after week, do so because they plan their strategy thoroughly. Before the start of the trading week – they already know which coins they are going to play. They already know roughly at what price they are going to get into (or out of) a position, and they know how much they are willing to risk. They do their homework. These guys are consistently profitable, because their sole purpose is to be one-step-ahead of the rest of the market. Positioning yourself in such a way is easier than you think.
BOOMIt is only fair to say that novice traders rarely see value until it is most markedly demonstrated to them, and the demonstration comes generally at a pretty high price. However, due to a peculiarity in the way the human mind works, It is easier for novice traders, to believe a coin is cheap when it is actually relatively expensive, than to believe it is cheap when it is actually more than cheap. Let me explain...
... You see, the answers to all of your questions about trading are right in front of you – at all times.
I have mentioned time and time again that to win – consistently – means that you have to modify not only your approach to the crypto market, but your entire mentality when approaching the market.
The clues are everywhere.
Take for example the equities market. There is a reason share certificates are referred to as “Stock”. There is a reason why we refer to financial arenas as “Markets”, and buying and selling as “Trading”.
This terminology isn’t exclusive to the financial markets, because every retailer in the world holds “Stock” but instead of 10,000 shares in Apple, their stock may be coat-pegs and barbeque stands. Nevertheless, It is the same game.
Every retailer in the world executes a “trade” when they purchase items at wholesale rate, only to then flip those same items to customers at a highly marked up retail price. If you’re thinking buy low, sell high, then you’re absolutely right.
Crypto is no different people, it is the same game!
There is a reason why big fur Jackets are cheaper in the summer than they are in the winter. There is a reason why television advertising is more expensive during the hours of 6pm to 10pm (Prime time) than it is during the day (when television sets are off, adults at work and kids at school). If you’re thinking Supply and Demand, then you’re absolutely right.
Crypto is no different – it is the same game!
As Crypto traders, we are no different from giant retailers who buy 10,000 pairs of flip-flops for a wholesale price of $0.50 each ($5,000), who then sell these same flip-flops off at a retail price of $4.00 each ($40,000) – making a profit of $35,000. Now, everyone knows that flip-flops don’t exactly fly off the shelves all year round... that is until summer time when demand is at its highest.
Crypto is no different – it is the same game!
You see, in crypto, prices move in cycles – simply because demand moves in cycles. What I am about to say may sound unfair, but it is a cold hard truth and something that will never change. The majority of crypto traders will always lose out, to the small minority of skilled traders. Here’s why...
... Like I explained above, demand for flip-flops is at its highest in the summer. Just like the demand for big fur coats tends to overshoot during the winter. So with that being said, do you think a retailer is going to get the biggest return on his money if he purchases his fur-coat stock during the winter when fur-coats are flying off the shelves at 100%+ mark ups? Of course not! He has to in effect “do the opposite” of his would be customers (the herd) – and buy during the summer whilst the demand and price is at its absolute lowest. To us crypto traders, that would be “buying at the bottom”.
You see guys, this is how supply and demand works. However, in crypto, supply and demand takes a peculiar twist. Understanding this one fact will drive so much profit into your back pocket, that you will have trouble spending it all.
In crypto, just like in any other market, there are cycles of high demand and low demand...
... Pay attention to this, because this is the key to consistency.
In crypto, demand is at its highest when prices are flying through the roof. Demand is at its highest when a coin is showing a 50%+ percentage gain.
Why is this the case? Well you have to ask yourself why is it that people trade altcoins? ... To make money right? Of course. Now, ask yourself, when is it most apparent that money is being made? ... When a coin is actively rising and surging though price range after price range, right?..
So, what usually happens as this is occurring? People flood in to make their own share of this profit, don’t they? And this pushes prices even higher as the demand increases. But, what these people fail to realise is that this same coin that they are buying into (at a severely marked up rate) - was bought up days/weeks/months before by traders who are well in tune with the laws of supply and demand. These traders bought in at wholesale rate – it is this same group of traders who meticulously placed their sell orders for you to buy through at the top of the market. You see a coin that is showing a 50%+ 24hr gain, could actually be providing those who got in at wholesale rate a 200%+ gain.
Guys, that is how the game is played. I cannot stress this any further.
If ever you needed an explanation of what it means to “buy low and sell high,” then this is it.
Just like the fur-coat dealer who buys his “stock” and essentially “fills his warehouse” during the height of summer when absolutely no one is thinking about buying fur-coats, us crypto traders must buy into only the best coins – when absolutely no one is thinking about buying, which is when the price is at its absolute lowest, all the stories being circulated are negative and the entire markets attention is elsewhere.
In order to really get a grip on what to look for when executing this strategy, you must read this post
here, this post
here and finally this one
here.
Read it, learn it and then profit!
Tip:
With everything said, I must repeat: The traders who are successful in this market aren’t the ones who spend the entire day sitting in front of the screen trying to catch quick 10% profits from coins that are selling at severely marked up rates. The traders that win consistently do their homework. Before the start of each month, week and day – they already know what they are going to buy and what they are going to sell. They buy into coins during the accumulation phase of the price cycle, which allows them to dictate their own prices when it comes time to distribute their holdings to the rest of the market. In essence, whilst most novice traders “trade the market”, skilled traders “make the market”. The funny thing is, the only barrier to becoming a skilled trader is understanding the difference between wholesale and retail prices.SIDENOTE: You want to eliminate as many poor-percentage and high risk trades from your repertoire as possible. Once you have done this, you will see a dramatic boost in your overall profitability. Trading less and taking only the best-percentage trades are such an important part of pulling consistent wins. Ask yourself before each trade, “why am I taking this trade?” If you don’t have an answer – or can’t justify the answer, then skip the trade. To develop the mentality needed to win in Crypto, you must develop a high probability strategy. It is as simple as that. You must have the discipline to sit and wait for only the most optimal trades where all the factors of a bull run are lined up and painfully obvious. Only then should you be putting on a trade. Note: BTC is a buy right now. Pay attention to the price and execute your buys at the low points. Oct - Dec will be very interesting.
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