A grandmaster strategy in crypto trading – Hacker Noon

The keys to big money wins and absolute zero losses

Photo by Mark Finn on Unsplash

Is it possible to have absolute zero losses? Emphatically yes! For you to make losses, you have to sell below the price you made the buy. As a crypto strategist, I don’t believe in stop-loss. The first rule of investing (in my own opinion) is; NEVER LOSE MONEY! Stop-loss makes you accept losses which only proves the fact that you didn’t do your homework correctly when you made the buy. This is why I don’t listen to the TA guys and chartists. Not that I ignore them totally but I don’t follow their tips or methods, however they give some nice perspectives which may be helpful in my own assessment. If you are not calling your own shots, you are not a trader.

The crypto world of trading is different from the traditional stock market. Certain principles and strategies that work well for the stock market won’t work for the crypto world. Some might want to compare crypto trading to forex, CFDs, and the likes, but I don’t think they are similar. Forex (and the likes) are too close to gambling as far as I am concerned. The fact that a person can lose more than the amount invested is disturbing. I’ve seen people move from 0 to 100 very quickly in forex but go from 100 to -1,000 twice as fast. I don’t know about you, but I don’t like uncertainty. I trade crypto for short term gains because I believe in its long term prospects. This is why no red market bothers me.

This is a glimpse into my strategy of trading and I hope it helps someone wake up and stop making losses. There are fundamental realities that I have come to terms with that affects the crypto world. Structuring your trading after those facts will help you trade well. Here are 5 of them:

  1. Good news from the team makes coin surge in value. And you can’t calculate for that
  2. When bitcoin sinks, most other coins also sink but at a faster rate
  3. When volume picks up, prices go up
  4. Today’s top gainers (especially those that gained over +40%) are tomorrow’s top losers. (Unfortunately, the vice versa doesn’t work)
  5. Every coin will have its day

Follow these 5 points and you’ll never lose money in crypto trading. Develop a strategy that respects these laid out points. Now, I must add that crypto trading is not a job. I do not consider it a job and certainly do not recommend it to anyone as a job. A job is what you do to add value that you are paid for. If you are buying and selling without doing anything to what you bought between the time you bought and sold, then that is not a job. It’s just a nice, smart skill. So, if you don’t have a job or a good source of income and you rely solely on crypto trading for income, you will lose money and will be a bad trader. This is because you will be desperate and unexpected market turns will make you literally sick. So, the ground rule of crypto trading is to have a source of income that can pay for your lifestyle already. Then crypto trading can help with the occasional big money flows.

To make money and never lose it is very simple in crypto. All you have to do is to never sell when you are in losses. And one way to see to that is to only buy the dip. How do you know the dip is the dip? Simple! Generate the chart; look at the 1 hr (that tells you what is happening at the moment), then the 12 hr (that tells you what the recent story is), then the 3 day (to know how it got to the 12 hr scenario) and finally the 1 month (to get the broad perspective). If you want to take a step further into genius, compare the long term coin chart with the chart of bitcoin of the same time frame. That will tell you what price is really the dip (relative to the price of bitcoin).

Just because you caught the dip doesn’t mean it can’t go dipper. How to catch the dip in the first place is to use limit order. My tip is to use like 1/4th of the amount you have set apart for this particular trade for this first dip. Then, set a price alarm for perhaps 3% further dip. If it achieves this in a very short time, go buy again with 1/8th of the amount you set for it. If the timeline is quite longer, another 1/4 might be ideal. And then on and on like that if it continues to dip. But then when it surges over your initial buy price by 6% (or even less, this depends on you) begin to sell gradually. Use limit order also. Check what the highest price for the day was and set a price a few inches lower. When trading volume begins to stagnate, that is your cue to take the rest of your stake out while you are still in profit (unless of course if you are holding for the long term or planning to use crypto coin for something different).

This is of course not an investment advice, it is just a glimpse into how I do my things. I do not get steady income from it but when I rake in, I rake in good. I don’t try to make smart decisions, I make decisions I’m comfortable with and wait for the day the market makes me look like a genius. Sometimes it’s hours, sometimes it takes weeks. But I’m not in a hurry, so I never lose money. I made up my mind that I’ll rather lose time than lose money. Which will you rather lose; time or money?

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