03 Dec - 08 DecTotal return: 688%
Coins: SMBR, SPR
Risk comes from not knowing what you’re doing. Whilst there always exists a murky undertone of risk in every financial market, there also exist countless means and methods of eliminating and avoiding risk. Therefore, it has to be mentioned that, those who have a profound knowledge of the mechanics behind price movement will always out manoeuvre those that do not – especially when it comes to taking advantage of high-reward trading opportunities.
SMBR
A common error made by novice and amateur participants in the crypto currency market, is to assume that, somehow, the digital currency markets are “nothing like” the other long-time established financial markets of the world. This is an absurdity.
Equities, commodities, futures, foreign exchange, digital currencies. No matter which market it is, no matter what the asset is that is being traded – the one common denominator in each and every financial market is: prices move due to the thoughts and perceptions of a collection of human beings. Therefore, the one recurring (thus exploitable) element commonly found in every single financial market – is human psychology.
You see,
I mentioned SMBR many times in the past. Every time
SMBR puts money into my pocket, I tend to write about it simply because SMBR is one of the most simple markets to play.
In addition to this, I consistently make reference to the fact that amateurs will only buy something when it is trading at an excessively marked-up price, breaking through price range after price range, when it is already displaying an above average trading volume, and when skilled traders have already profited.
If you were to break down the numbers of skilled players who bought into SMBR at the right time, and compare it with the number of novices who bought at the wrong time – you’d find that the novices would excessively outnumber the amount of skilled players, every single time.
This is because human beings tend not to make conscious decisions.
We are constantly on autopilot.
Therefore the bulk of our decisions aren’t made consciously, they are formed subconsciously by all of the thoughts and opinions that we have gathered throughout our lives up until that point.
This is why, a novice trader will stumble upon an obvious trading opportunity – at the most optimal time – low price, low volume, low sell resistance etc. And will fail to make a decision based on rationality.
He will combine everything he knows (whether correct or incorrect) about the market, and his decision will form subconsciously.
Every loss in the market is caused by either a lack of skill and knowledge, or by an abundance of erroneous and incorrect knowledge.
The common (and incorrect) wisdom in crypto is “look for good buy support, high volume, high activity etc etc.” This is what would cause our novice trader in the above example to pass up on that optimal trade.
Then, a day will pass... Another day will go by, and that same coin will have climbed several hundred % and be sitting right there on the front page of Bittrex, displaying a 150% 24hr gain. 50btc 24hr volume. It will have heaps of buy support (other novices) near or at the current market price. And it is now, at this exact moment, that this novice trader will decide to buy – at the very top of the market.
There is nothing rational about this kind of behaviour.
Some will call it an “impulse trade.” That isn’t what it is.
This trade was born out the fact that human beings make the vast majority of their decisions on autopilot. Using all of the thoughts and opinions that have been gathered throughout their lives up until that point.
With that being said, I must repeat: Risk comes from not knowing what you’re doing.
Trading isn’t about using Bollinger bands and other idiotic tools that have never put money into your pocket. It is about understanding that the “common wisdom” in crypto, is your toolkit to exploit the majority of market participants – novice traders – for profit. It is that simple. Trading is a game of psychology – using your knowledge and skill, to get ahead of those who aren’t in the know.
Trading is as simple as buying something whilst it is properly priced (and still in demand) – knowing that novice traders and gamblers will always be there to put money into your pocket when that coin rises 100%+.
As a trader, you have to understand that behind every short-term price movement is a long term trend. Behind every long term trend is a gargantuan amount of profit.
Therefore, those who concentrate only on short-term price movements – will always make less money (if any at all) than those who are authentically tuned into the long-term trend.
If you aren’t aware of the long-term trend, then you will never know when it is the right time to buy, to hold, or to sell. This would be the equivalent of attempting to drive a car that has four flat tires. You will go nowhere.
Tip:
Most people want to follow the roar of the crowd but, for the most part, following what everyone else is doing is rarely a way to make the largest amount of money. You may scrape some tiny winnings here and there, but you will eventually begin to suffer huge and hard to take losses. Look where others don’t and always remember that when prices are rising – the most skilled traders in the market are selling. Those sell orders that everyone runs through during a rally are placed by traders who are two steps ahead of the game. These trades accumulate while everyone else’s focus is on the latest “big thing.” Keep a keen focus on uncovering recurring price patterns, and you will begin to spot opportunities before the average trader.
SPR
If everyone knew just how simple it is to make money in the crypto market right now, then it would no longer be so simple. However, knowing how the vast majority of participants in this market make their trading decisions – you’d have to be a fool not to take complete advantage of this whilst the market is still in these early stages.
Alot of the time, you’ll hear people speak unfavourably about the altcoin market in particular. Claiming that it is a nest of risk and a safe haven for manipulators and other shadowy influences.
Maybe the very difficulty of altcoin speculation is what has brought it into disrepute. Most people who enter this market fail not because of manipulation or other outside factors, they fail because of their own lack of knowledge, thus their own inability to be successful. Naturally, people who fail at this enterprise – and they are in the majority – don’t speak to highly of it. But neither do those who have been unable to master golf mention that game with any praise.
Personally, I feel that the altcoin markets provide the largest opportunities – in terms of profit, than any other market in the world. The growth potential is monstrous.
Let’s take this SPR trade for example. I had originally gotten into this coin due to noticing a recurring pattern, which I explained
here.
Yesterday, SPR’s daily trading volume reached an all time high of 65 BTC. Pushing the price from 36k to 59K.
This move was made brutally obvious, just due to the blatant, yet methodical, accumulation that took place since Dec 19.
The average marketplace novice will profit by changing his perception of the market.
He needs to understand that every single inch of buying, and selling is displayed – in full – on the charts and in the order books. Thus, nothing can be hidden.
Therefore, in order to be successful, it is necessary to embrace and understand manipulation as opposed to running from it.
Tip:
Why do most unskilled traders lose out in the altmarkets? By avoiding the coins that at times may be particularly painful to own, they miss some of the biggest winners. In crypto, there is a persistent overall tendency for equity to flow out of the hands of the many and into the hands of the few. In the long run, the majority loses. The implication is: to win, you have to act like the minority. If you bring normal human habits and tendencies to trading, you’ll gravitate toward the majority and end up losing consistently. Novice traders lose money not only because they lack skill, but also because their inclination to make the comfortable choices in trading will actually lead to less than terrible results. Awareness of this inherent human handicap to trading is your first step in resisting the temptation to make trading decisions that feel good but are wrong on balance.
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.
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