Categories
Crypto Blog

Five things I wish I knew before starting trading cryptocurrencies

This blog post is by no means my death note. I am still trading. Cryptocurrencies are very volatile, meaning that their value fluctuates at dramatic rates. These fluctuations can cause you to get kicked out of your trade very quickly and are a good reason why you must endure significant losses. Moreover, seeing your numbers going red in the beginning is a further reason for frustration. Head up, because this happens to every one of us. In fact, a trader knows the risks and tolerates that they are hard to avoid. But to be successful in these complex markets, having a wide range of experience is fundamental. Many newbies get kicked out of the market because they underestimate their risk, and they set their time preferences to high. Getting rich quick is very hard while trading and usually only happened when there was significant trade value from the beginning. Keep your head cool. Try to minimize the probability of substantial losses. By doing so, the chances are that you stay in the market for much longer. Staying in the market for longer also means that your likelihood of return increases. 

What I want is that you can stay in the market as long as you can. So, let me give you five tips that keep you in the market for as long as possible. Be sure to stick around till we get to point 5. I got a bit of extra advice ready for you that you don’t hear that often out there. 

  1. Consistency –  This hits the nail on the head and is one of the most critical trading factors. If you are starting, ask yourself: Do I know how markets move? If the answer to this question is no, go and learn it by scanning the charts with a consistent approach. If the answer to this question is yes, the same answer applies, keep on doing what you have been doing. The best thing to do is to create a routine around it. Wake up at 6 am, check the charts, listen to Yves daily podcast, see if anything interesting pops up. If there is not anything worth trading, come back in the afternoon. If there is something worth trading, take the trade but do not forget to come back in the afternoon too! Remember, we are committing to trading to obtain consistency. Seeing charts on a daily basis is the best way to get exposure to as many moves as possible. As soon as you feel comfortable observing the movements, get some experience trading. 
  2. Be willing to lose money – Making mistakes while trading means it involves you losing money. Losing money is a good thing if you get a return that gives you value back. Imagine you standing in front of a vending machine, hungry and willing to sacrifice 2$ in exchange for a delicious chocolate bar. To your despise, you find out that the vending machine takes your money but doesn’t give back that delicious chocolate bar in return. Now imagine, if you lose money while trading without learning a thing from it, you could be throwing your cash just as well into the vending machine described above. Making mistakes and losing money while doing so is fine. It should sting, which will increase your learning curve dramatically. Many fear the loss of money while trading, but you have to understand, with experience comes knowledge, and knowledge is the best weapon against fear. But to obtain knowledge that is practical, experience matters. Experience is worth the money because it will make money back and bring in more if you give yourself the time to grow on your mistakes and bad decisions. 

  3. Trading is nothing you can do while sitting at a party and have a drink with friends – Take your time trading. Dedicate at least an hour a day to trading if you are just starting. But do not be naïve; if you believe that your judgment is spot-on while you are not focusing on your chart, you are massively wrong. The market will be ruthless, and the market will take your money. I lost quite a sum of money because I installed an exchange app on my smartphone. The next thing you see is me taking trades left and right, trading my portfolio into the negative. The day I deleted the app, my portfolio went back into the green. Not because I was not executing trades on my phone anymore, but because I actually had to sit down in front of a screen and commit myself to the charts. Once I got the hang of it, trading started to make sense. You need time, focus, and you need the right mindset to trade. If you cannot align those three criteria, you better not be bothered looking at the charts. 

  4. Trade enough value – The only barrier to entry, practically speaking. In order to trade lucratively, you need quite some money. From experience, starting at 1000$, you are beginning to see some returns high enough to incentivize you to stay; making 1% with a 1000$ means, you make 10$ in profits. If you trade lower than that, you might feel that you aren’t moving into a profitable area with your asset. That is because you genuinely are not moving anywhere. There are maker and taker fees that destroy your return immediately. Trading with lower assets than 1000$ means that you have a lower risk of losing substantial amounts of money, though it is a great way to get started trading. By reducing your order size (the amount of money you invest), you effectively reduce your risk. 

 Be sure to have that notebook ready because the last tip influenced my trading immensely:

  • Stop looking for trades to take; start looking for trades not to take – The common mistake I have been making by myself and seen done by people I am trying to teach trading is that they think that they must find the perfect trade to take. However, this is the crypto market, so remember, volatility can bite you in the ass if you do not keep an eye open. Even the perfect setup can be a negative trade. Change your mentality; try to start focusing on not taking a trade. As soon as you start focusing on the fact that preserving money is far more challenging than spending it, you see everything in a different light. By virtually eliminating every possible trade option because of a fixed base of rules is the perfect way to combine everything taught until now. By having those rules and only trading after these rules, you become consistent. If something is out of line, you stay out of the trade. If there is a big candle before your entry, it does not fit into your set of rules, walk away. 

Trading is about reducing risk by failing and succeeding again, and again, and again. There is a good reason why consistency is at the top of this list. The clue to success lies in how you bend the probabilities of success and failure. It would help if you experienced winning and losing money, be sure to learn as much as you can from every piece of information you can lay your hands on and take your time and space to commit. The faster you build your routine around trading, the quicker you become good at it. The better you become at analyzing, assessing, and executing trades in the cryptocurrency market, the easier it will be to trade the market. 

Every trader experiences a dead end at some point; getting a mentor will help you for sure. Be careful with doing courses out there and only learn from someone you could eat dinner with. Otherwise, they might not be able to connect with you and teach you how to trade. If you need consultation, don’t hesitate to contact me. 

Categories
Podcast

How to scan the markets 30.12.2020

Bitcoin at a new all-time high! Alt market is set to fire. Keep an eye on the charts today in order to catch some of those luctarive trades.

Categories
Crypto Blog

3 reasons why Bitcoin is bull-running

Let us get the terminology straight first, what is a bull run? 

A bull-run is an increase in the value of a cryptocurrency over a long period of time. And since the price is rising, direct demand is increasing too. The longer a bull run is, the more people enter the market and join the rally. Good examples of bull-runs are the Bitcoin bull-run in 2018 and 2020 (writing this during the bull-run).

So, is a bull-run a self-fulfilling prophecy?

No, even though this could be considered as a logical assumption, but it is nonetheless incorrect. Since many people enter bull-run thinking exactly that, most of them will be surprised when the price comes down again and sell-off. Let me evaluate this further by listing you 3 reasons why Bitcoin is bull running now at the end of 2020. Make sure to stick around for a reason number 3 since it is the one we all can relate to the best probably. 

  1. Retail Investors are entering the markets – Huge international corporations are turning their heads towards cryptocurrencies. Bitcoin and some of the Alt’s have outperformed every other market on the planet in 2020 and soared to new all-time highs. The financial world finally starts to understand that Bitcoin is here to stay, if they want it or not. Companies like Microsoft and Visa are the top companies on the list. Retail Investors start to understand that diversifying into cryptocurrencies might dabble in some nice and good profits to top of a strong year in all regards. Moreover, financial institutions like Square Inc. or Visa have added some Bitcoin to their portfolio in 2020. The news that Square Inc. would invest in Bitcoin was widely recognized as the reason why retail investors started to turn up with some money. 
  2. Limited supply – Since there are only 21 million Bitcoin out there and demand for Bitcoin is picking up, the value of Bitcoin is increasing too. This effectively means that the more money there is in the Bitcoin market, the likelier the price is to rise. This makes it the perfect store of value. And since the US government has been inflating the Dollar at rates never seen before in the history of fiat currencies, many investors realize that Bitcoin is, economically speaking, the only real store of value next to Gold right now. This year alone, did the US print 50% of all the existing Dollar supply. I understand that this money is needed desperately, but, in my opinion, the US requires discipline and not more inflation to solve its problems. 

In the year 2020, many unfortunate events brought it down to this. The world now uses inflation as a tool to “fix” all the problems that we have. This is the reason why 2020 was the year for me where I started to understand what Bitcoin really means to the individual. It is crazy to think that the only alternative monetary system to the one we use to run our world is a magical internet bean with subjective value. But it is the reality, and to have the ability to use Bitcoin as an alternative system makes me more than happy. Luckily, we all live in a time where having Bitcoin is made possible. 

This brings me to point 3, so without further holdback: 
3. You and I are entering the markets – Since the general awareness about cryptocurrencies increased during the 2017/18 bull-run, the public only starts to understand and grasp the complexity of Bitcoin. We were not ready to understand this new technology in 2018, but more and more people nowadays. The younger generations realize that Bitcoin is the internet solution to a 2020 problem. The financial crisis and now the crisis caused by the pandemic have increased awareness among every age group that value preservation has changed in the past years. This time it feels different than in 2018, where the Fear of missing out was consuming the public. Many in cryptocurrencies have learned from 2018 and are now better prepared for the markets’ complexity and volatility. 

So, as I said before, the Bitcoin Bull-run does not work like a self-fulfilling prophecy because its value is based on the individual’s subjectiveness (how much some see value in Bitcoin). And since the public and retail investors do not act out of Fear of missing out anymore, they are likely to keep their Bitcoin for a longer time. Investors and you and I are all behaving more appropriately to the volatile market situation, which is excellent for a consolidating Bitcoin and hopefully a continuous run. This mentality change is crucial because it shows a maturing market situation that will eventually bring long-term price stability into the Bitcoin and cryptocurrency markets. 

So, is it too late to enter the market? 

NO, NO, and NO. It is never too late to enter the market, but please, never enter the market just for the sake of joining, do your due diligence and only invest if you have a strategy in place that might reduce the probabilities of losing your value. Starting out in cryptocurrencies is hard, but it is doable with a structured strategy and the willingness to sacrifice some time. 

To conclude, there are many reasons why the ever-growing interest in cryptocurrencies is not flattening out anytime soon. With Bitcoin set to crack new all-time highs and the growing interest of professional investors and ordinary people bring additional momentum, Bitcoin has a bright future in front of itself. Join this significant venture that combines the opportunity for independence and financial freedom. Bitcoin has outperformed this year, and it will happen in the coming too. 

If you need tips and tricks for trading and investing, do not forget to check out my website and follow my weekly newsletter tips and tricks for trading. If you need someone that shows you how to scan the markets, check out my podcast Yves talks Bitcoin on Spotify or YouTube.  

Categories
Podcast

How to scan the market 29.12.2020

Some Alt’s fired up while Bitcoin is consolidating at around 26k. Listen to the podcast to find out what there is to trade out there right now.

Categories
Podcast

5 tips to self-improve Podcast

Yves talks Self-improvement episode 1.

This episode will cover 5 tips to get started on self-improving.

Categories
Podcast

How to scan the markets 28.12.2020

Today Ethereum, Litecoin and Bitcoin all sit in the cradle zone, I am wondering where Bitcoin moves next, but the Bulls haven’t left the market yet, the Run is likely to continue.

Categories
Crypto Blog

The crypto-glossary everyone needs to have

The cryptocurrency vocabulary guide:
Digital assets offer a fresh alternative to the traditional markets; however, it is more important than ever to do your due diligence and homework about the coins you want to invest in. To understand cryptocurrencies, it takes a lot of time and effort to find the relevant information that lets you know a project. To avoid, to make a wrong decision, knowing the terminology beforehand often helps.
Let us obtain a deep understanding of what cryptocurrencies are and what they do. The best way to get started is with terminology.

Bitcoin – is a decentralized digital currency that allows an individual to send value to another individual through open-source, peer-to-peer software without using a central bank. Bitcoin is a scarce asset that cannot be inflated artificially. Many love Bitcoin because of its economic properties.

Altcoins – Any other digital currency next to Bitcoin is called Altcoins. Examples for Altcoins are Ripple, Bitcoin Cash, Cardano, Monero, or Litecoin. Altcoins follow alternative protocols differing from Bitcoin.

Shitcoins – Often used to refer to Altcoins. Bitcoin fanatics call Altcoins “Shitcoins” because of their effort to be like Bitcoin.

Blockchain – Is the technology behind digital assets. It is a distributed ledger system that stores information unchangeable and not erasable. A blockchain consists of a series of blocks that contain all the information of transactions completed in the network.

HODL – Commonly referred to as “hold” but actually means “hold on for dear life.” Slang to imply that you will keep on holding your asset and not selling it.

Long, going long, long position – Stands for “expecting the value of the asset to increase.” If you long Bitcoin, you expect its value to increase. Going long just simply means to buy an asset.

Short, going short, short position – Stands for “expecting the value of an asset to decrease”. If you short Bitcoin, you expect its value to decrease. Going short just simply means that you sell an asset.

Moon/ mooning – If Bitcoin moons, it appreciates in value rapidly.
Exchange – Market where you can buy digital assets. Not every exchange offers every token. Having more than one exchange will help get exposure to as many tokens and coins as possible.

ICO’s or Initial Coin Offerings – Describe the process where a company offers its token or coin the first time to the public to raise the value of the project. ICO comes from the initial term IPO (initial price offering) used in the conventional markets to describe the same situation just with stock and bonds instead of tokens or coins.

Airdrops – This is a method of distributing assets of a specific currency without exchanging value for it. In other words, you can participate in airdrops to get free tokens by signing up for an ICO.

Fiat currency – A currency established by a government with no real intrinsic value. Fiat currencies are inflationary currencies that can be printed more of. Examples are the USD, Euro, and Swiss Franc.

ATH or All-time high – Refers to the highest value Bitcoin has reached up to this date. If Bitcoins value has been 30k in 2020 but has never exceeded that value, this is called the all-time high.

ATL or All-time low – Refers to the lowest value Bitcoin has reached up to this date.
FOMO – This stand for “fear of missing out” and means that if Bitcoin dramatically increases in value, people tend to make a bad decision while buying or selling it because they fear to miss out on a new all-time high.

Market Cap or Market capitalization – The total market value of an asset. This can be easily calculated by multiplying the number of Bitcoin in holding times the price of Bitcoin.

Pump and dump – A scheme that involves people buying into a project to inflate the asset’s price unnaturally. As soon as they reached a specific value, they sell all their holdings and letting the currency drop to virtually zero.

Rekt – Means “getting wrecked” in the crypto-trading slang. Getting rekt means that an asset loses all its value, and the trader trading that value loses a significant amount of cash.

Bullish – This means that optimism in the market is high, and an asset’s value is appreciating. Assets are bought in a bullish market.

Bearish – This means that pessimism in the market is high, and the value of an asset is depreciating. Assets are sold in a bearish market.

ROI or return on investment – Indicates the expected amount of profits to be made on an investment. The anticipated return on investment is usually calculated before investing.

Whales – This is commonly referred to as traders or investors that move a significant amount of money. If an asset has low liquidity, one whale can determine an asset’s price by selling or buying it.

Satoshi Nakamoto – Is the famous pseudonym used to describe the founder of Bitcoin. His real identity is still, to this day, unknown.

Mining – Describes the process of forming new units of a specific digital asset. Every 10 minutes, a block gets mined on the Bitcoin network.

Noob – Beginners or newcomers are often referred to as “noobs” because they lack the necessary experience to understand the crypto buzz. It is not a very nice word.

To conclude, to understand the markets, you got to speak their language. This list of the essential terms you need in the crypto world will surely help you orient yourself and become a better investor or trader. Remember, always do your due diligence, especially when you dive into the deep ocean of altcoins.

Categories
Podcast

Market Scan 27.12.2020

This is today’s market scan. I will do a daily market scan with my set of rules. If you want to find out more on how I trade, subscribe to my newsletter and get in touch with me!

Categories
Podcast

Yves talks Bitcoin Podcast

This is the official Yves talks Bitcoin Podcast, here you will find every new episode posted weekly and daily. This Podcast will cover everything from trading and investing in Bitcoin and cryptocurrencies, but it will also focus on the economics behind Bitcoin and Austrian economics. Moreover, it will be covering tips and tricks for mental health, self-improvement. Be sure to subscribe, so you don’t miss out on any new episodes.

Introduction to Season 1
Categories
Crypto Blog

What is a risk assessment?

Risk assessment describes how hazards are identified and analyzed that may cause a negative outturn in the planned process. Potential negative impacts on individuals, assets, or a company are assessed and eliminated or avoided. Risk assessment while trading is looking for factors that keep you out of a trade. Hazards or unusual movements are quickly identified, and if appropriately assessed, they may even keep you out of a trade. 

Three steps to assess risk:

  1. Identify the hazards – Write them down, save them. Learning while trading is the only key to success. Learn what works and what does not. Strategies are a great way to avoid risk and trades that should not be taken. For example, if there is a general uptrend, but there is a significant negative sell-off on the way. This usually keeps me out of a trade because it does not fit my rules and messes up the chart. 
  1. Assess the possible outcome – Be sure to understand what it means if you decide to ignore a risk factor while trading. Sure, it is a game of probabilities; however, the chance of finding another chart with a better build-up is very likely. 
  2. Take the necessary steps to reduce a negative outcome – Reduce your order size if you feel like it is not the best build-up. Take your stop-loss close to your entry to minimize losses. Average your entry out, if possible, by opening 2-4 positions. 
  3. Record every detail – I repeat it often, but I can not stress this enough. Record your trades, learn from your past mistakes and misjudgments. Making a mistake once is fine, but you wasted the experience if you are not learning your lesson from it. Review your recordings after a fixed amount of time, judge yourself for taking dumb trades, cherish the good ones. 

Why is risk assessment important while trading? 

The proper risk assessment will kick-off your trading career. Focus on what you see, match it with your rules, execute consistently. Trading is grinding, reduce the probabilities of having a negative outcome; if your focus is on that, you increase the likelihood of having a positive outcome. Moreover, assessing risk also helps you to identify your costs. Many beginners forget about taxes, maker or taker fees, and transaction fees to be considered in their risk assessment. Identifying every detail is not easy and involves a lot of reading and thinking, but it is well worth it. As soon as you experienced every risk situation, your trading will surely improve. 

My own experience with risk assessment 

Risk assessment is something every trader or even an investor needs to know. Risk assessment helps me to stay out of a trade. While I am looking at every timeframe, identifying hazards, and scanning with my strategy, I am not looking for trades to take, and I am looking for trades not to take. Risk assessment taught me to think differently. My trade assessment changed from FOMO driven trading to a calm and objective scanning. When I find my trade to take, I get excited for sure. The ability to anticipate future events and create processes or methods to alleviate the possible outcome is vital for every trader. 

Three methods to reduce risk: 

  1. Stay out of the trade – This is obvious but not an easy one for everyone. Fear of missing out is the biggest enemy of every beginner, and I experienced first-hand FOMO by myself. Remember, you are here to stay. Making an uneducated decision is never a wise decision. 
  2. Use a stop loss – Using a stop loss is crucial; if you want to find out more about why that is, click here
  3. Reduce your order-size – By reducing your order-size, you reduce your potential gains and your possible losses. Going in all-in is something I do very rarely. If I feel that my risk is too high while trading the markets, I only trade with an amount I feel comfortable with. 

To conclude, every trader needs to know how to identify his risk and reduce them if possible. Trading means failing. Failing isn’t cheap, but failing without reducing risk first is more expensive. Use those tips to become more successful with your trading. 

If you want to find out more about trading and investing or the economics of Bitcoin, go and check out my blog, subscribe to my newsletter, and get insight into how I am trading.