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Crypto Blog

5 things every trader needs to know

Trading is a buzz, especially when trying to figure out strategies. It is tough to stay concentrated with all those traders sharing their own strategies that apparently work wonders. Not being distracted by all the buzz is the key to becoming a profitable trader. Many newcomers think that the more they know, the better. It does not work that way. People sharing their strategies is a good thing, and I do not want to criticize that. Every trader needs some form of plan to get started. Many think it is about that “one” strategy that will make them buckets of money, and I am trying to point out why this way of thinking is not very productive. Even though the truth is quite near to that. There is no such thing as the “one “strategy because the strategy you decide to use is understood on a personal level. This means, the more familiar you are with the strategy you think suits you best is the one thing you should double down on. 

Make sure to stick around till point 4 or 5. I will give you some great extra tips from my personal arsenal. At the end of this article, I provide my own routine that you guys can use or even copy. Without further hesitations, let’s get started! Here comes the first one:

  1. Do not use more Indicators than necessary – As we discussed before, there is no such thing as the “holy” grail of trading. If you want to become good at trading. The fewer indicators you use to judge your execution of trades, the better typically. Indicators usually just add to the buzz you should be avoiding while trading, so the fewer you use, the better your executions usually become. You need to change your mind here. Indicators should not help you enter a trade. They only should keep you out of a trade. This is one of the best ways to avoid being influenced by the indicators. Indicators should not be a critical point of your strategy but a healthy fundament to build your strategy right on top. 
  2. Use a strategy – Do not just use any. Using the wrong strategy can really lose you money. Find a strategy that makes sense to you. Do not let yourself be talked in by trading mentors that guarantee you X amount of money with their strategy. The holy grail of trading doesn’t exist. This is the best way to improve, finding the strategy that works for you. Research every single strategy out there until you are confident that you want to use the chosen, focus on the selected strategy, and try to blind everything out that has nothing to do with your approach. Trading is about finding your focus and keeping that focus consistent like a death-ray.
  3. Use as many perspectives as you can before entering a trade – It does not matter whether you want to day or swing trade. The more perspectives and views you got on a particular trade set-up, the better your judgment usually gets. An often seen mistake is that traders look at a timeframe that would make them enter a trade, and as soon as they move up higher in the timeframe, they redecide. Different timeframes can give you constructive insight while trading.  

Now many of you probably knew about the first 3 points. So as promised to let me give you some tips that improved my trading in no time. 

4. Plan your trade and trade your plan – By planning your trade, you really learn to understand what it means to trade. You must think about every move you are going to make before even taking it. This helped me immensely because I stopped taking emotional trades, and it gave me the new thinking of “Did I really think about this?” before hitting the buy button. Making unelaborated decisions while trading is one of the main reasons why many newcomers drop out very fast. So keep your head cool and trick your consciousness into a new state of thinking about trading. 

5. Document every trade – This is my favorite tip I can give you guys because it is easy to do. All you need to do is taking screenshots after you made a trade. Make sure to save the screenshot because we are coming back to look at it again at the end of the week. Reviewing your trades is a great way to learn and really is one of the best ways to preserve the experiences you collected while trading. All it takes is time and consistency. If you find the time to judge your successes and your failures, you will understand what it means to take a good trade. 

Trading is by no means easy. But learning how to trade wrongly will not help you in the future. Ensure that when you choose a strategy, ensure that the strategy really suits your understanding of the markets. Do not be distracted by all these traders trying to teach you the new way of making your living. Find something that works for you and focus that death-ray on it. Make sure to have a strategy and a plan for every trade you are going to take. I would do it like this: 

  1. Plan my trade
    – Where is my entry?
    – Where is my stop-loss? 
    – What is my target? (1:1, 2:2)
  2. Trade 
    – Check the timeframe 
    – Check the indicators 
    – Entry as planned 
    – Get stopped out
  3. After the trade
    – Take a screenshot of your entry and your stop 
    – Save it and look at it at the end of the week again

By using this routine, you will bring consistency and simplicity into your trading. This model does not include a strategy, so you guys can use whatever strategy you feel most comfortable with. Use this routine every single time you execute your trades, and you will learn fast. 

If you need help scanning the markets, you might be finding my daily podcast very helpful, or my blog where I post my thoughts on the charts and the markets. Make sure to check out my website for additional tips and tricks. 

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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. 

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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.  

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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.

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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. 

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Crypto Blog

Trading and Investing

What is day trading/ swing trading?

Yves Hofstetter1 day ago·5 min read

Day trading is the selling and buying financial tools and buying or selling them within the same day. Short-term action and lower timeframes are used to execute strategies based on indicators and trigger signals. Whereas swing trading is the buying and selling of the financial tools executing a strategy focused more on the long-term. The difference lies in how long a trader prefers to stay in a trade.

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5 reasons why you should day trade:

  1. Easy to enter — Day trading not only allows you to do what you like full-time but it also allows you to learn and see changes in real-time. This is a game-changer, learning how markets behave and executing trades daily is perfect to give you the understanding of the markets you need in order to see the long-term aspects of trading or investing.
  2. You can become independent — Day trading is a business if you think about it. If you manage to trade enough value and your execution is good, day trading might be the key to get you off your job and into a new field. But do not forget, trading is not easy, take your time learning it. You will only become successful when you practice and stay consistent with your approach.
  3. Work from wherever you like — This one sounds too good to be true, but it isn’t. All you need to trade is a stable internet connection, your laptop, and your everything else you need to be in the mindset. Trading even got easier through most of the exchanges offering Apps to download onto your mobile phone which enables you to execute your orders or manage your portfolio on the go.
  4. Day trading gets you off the idea “get rich quick” — I know, this one might sting. It is the truth, nonetheless. To become a successful trader, you need consistency, know-how, and the willingness to make mistakes. 90% of new cryptocurrency traders that just started out, end up with significant losses and no funds left after a month. Try to avoid being one of them, use a Stop-Loss, and manage your risk, if you need help with that, click here.
  5. If you can afford to lose money — The most important lesson to take away here. Be prepared to pay for your experience. Learning is a hard process, make mistakes but try to learn from them. Take screenshots, review your misjudgments, and don’t do them again.

5 reasons why you should swing trade:

  1. Less time consuming — Since you will not find yourself scanning the market all the time, you will have more time to work, do stuff with the family, or just enjoy some time off-screen. Swing trading is perfect for you if you need time off, all you need is a solid strategy and check on your investment once or twice a day.
  2. You can stay in the market for longer — Day trading needs you to set your Stop-Loss very close to your entry value which involves the higher risk of being taken out of the trade to early, swing traders can average their entry out by opening 3 -5 orders normally. However, by staying longer in the trade you increase the chance for a negative outcome and the risk.
  3. Rewards are usually way higher than day trading — Since swing trading allows you to adjust your Stop-Loss to a level that takes volatility into account too. Day traders normally use trailing Stop-Losses that take them out on the declining top of a candle. Swing traders are fine with giving back if it means that they can get more gains later.
  4. Cut out the noise markets are creating — Swing trading helps you to stay away from low timeframe charts. Hunting for news and trends is not necessary, just sit back and enjoy your strategy.
  5. Fit trading around your routine — Day trading is the other way round, to be successful you need a daily routine. Swing trading offers you the chance to plan your schedule when you check the graphs. You decide whether it is necessary to check the news for valuable information. Swing trading helps you to analyze the markets in a much shorter time since you are looking at the higher timeframes of the chart.

What is my recommendation?

Trading daily is fun and very good to get the hang of trading in general, having daily exposure to the charts and the movements of the markets will make you become a better trader. However, do not get lost in all the buzz out there. Day trading is full of people telling you what you should do and where you should invest. Keep it simple, stick to your strategy, and question everything you hear about trading. Do your due diligence and be sure that you invest in something with value. However, swing trading will help you to cut all that noise out of your trading, swing trading is the optimal way to test new strategies or prefect the ones that are already existing.

To conclude, I recommend starting with day trading, find the edge. Get yourself into it and learn what makes sense to you. There are many people out there trying to sell you something. First, find out if trading is something for you by using free material. Secondly, if you find yourself at a dead-end, get a mentor, and pay for a course. It is well worth the price if you find the trader that suits you best. I always imagine myself swing trading with 60 when I can’t be bothered looking at the charts anymore, that doesn’t have to be that way, swing trading is worth trying out as soon as you got your fundamentals right. It might be even perfect for you!

If you want to find more educational material covering trading, investing, and the economics of Bitcoin, check out my blog and subscribe to my email, I will be posting all my knowledge and experience for free on there.

Categories
Crypto Blog

Why using a Stop-Loss is crucial while trading?

The most common misjudgment of volatility always happens when people think using a Stop-Loss is not necessary. A Stoploss is a trigger that takes you out of a trade because the trade outcome is negative. This trigger will take out the value you decide and convert it into your standard currency. Using one effectively means that you reduce your risk of losing more than you want to, it will make what you dictate, so if you are on the toilet and price changes rapidly against you, you will not miss the moment to sell. Using a Stop-Loss is crucial to becoming a successful trader or investor, and Stop-Losses will help you regret bad decisions less than not using one at all.

Five reasons why you should use a stop-loss while trading or investing

  1. Risk assessment – By determining the Stop-Loss, you calculate your immediate risk. Let us say you own a portfolio of 1000$ in Bitcoin; you decide to set your Stop-Loss to 5%. What that means is, when the price reaches the level of where your money is only worth 950$, it will take you out of the trade no matter what. Price movement can be very sudden, and these moves are often ruthless in kicking you out of your trade at a loss. However, trading is about winning and losing money. A good trade with a negative outcome is better than a bad trade with a positive outcome since this seduces us into the thought that what we did is right (which is wrong). If you just traded poorly, the Stop-Loss will be your friend. Bad Trades are common; your only friend reducing the damage is the Stop-Loss. So, use one, or the market will be greedy.
  2. The market can and will go lower — No one could have foreseen the huge impact the pandemic had on this world’s economies. Supply chains have been disrupted, economies have been stopped, and many businesses went out of business. 90% of new traders lose their capital in the first month because they underestimate the volatility or the risk of the market; many never used a Stop-Loss. Trading Crypto is anything from easy, but if you are dedicated to being successful and get a second chance on your trading career, us the Stop-Loss, you will not regret it. Moreover, beginners always think they must predict the market, do not be one of them. Predicting markets is rubbish—Trade what you see, not what you think.
  3. Trade what you see, not what you think — I wish I would have known this one earlier. Being new in space is very exciting. As soon as you realize how much money and potential there is in cryptocurrencies, you will probably never want to go back to the fiat currencies you came from. Please do not get too emotional about it while you trade, be clear, trade your strategy, and stick to it. 
  4. Make mistakes — Without making bad trades, there is no learning. Make negative trades, lose some money, get a feeling of how the markets work, and try to learn from the mistakes you are making on the way. The best way is to screenshot every trade, review the trades after a few days or weeks, and assess your mistakes again and again. Be learning from your mistakes; you will prevent future mistakes. Successful traders know precisely when a trade is good to take or not. You can only get the hang of this if you do those mistakes repeatedly. By taking screenshots and judging yourself on your past misjudgments, you will see a fast improvement in your trading. To improve, you need money to trade with, so use a Stop-Loss to use the money to learn and not to waste.
  5. Take your time — Learning to use a Stop-Loss in a volatile market such as the cryptocurrency market is not easy. Use it as often as possible and find out which values work best with your strategy. Try to adapt too. Finding the perfect spot to place a Stop-Loss will never exist. Markets move unpredictably, so wrongly placed Stop-Losses will happen. Try to place your Stop-Loss with the thinking: “how much can I afford to lose?”. By limiting yourself through this thought, you will not be able to trick yourself into changing the value again due to misjudgment or FOMO (fear of missing out).

To conclude, trading is risky; using a Stop-Loss is reducing that risk. It reduces your risk to a factor that you can lose. Using no Stop-Loss will stop you out at zero. Moreover, Stop-Loss knows no emotion. Getting out of an investment that makes an unpredicted move is never a bad thing. Opportunities for gain further down the path might open a new entry, and securing profits is more fun than being pissed about losses. Both are trading. Changing the probability of one can have a massive impact on your success rate.

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Crypto Blog

How to start a business with cryptocurrencies

How to start a business?

March 2020. The pandemic was raging through Europe and forced me to go into the home office. Due to the insane amount of extra time, I thought to myself: how to start an online business? The answer is, there are thousands of options.

There are many ways to make money in crypto; trading and investing are the standard methods of getting your fair share. Thanks to dApps, you can game yourself to being rich, or even starting your nod to mine cryptos is already a business idea. As you can see, there are tonnes of options. Find the one that suits you, and let me display my favorites.

Cryptocurrencies as a business

I know, this isn’t probably the thing you expected to read as the first thing to recommend as a business idea but hear me out. The cryptocurrency niche is a fascinating one. It plays with the idea of an alternative monetization system while our government prints their fake money as if it was not relevant. With inflationary money (commonly referred to as fiat currencies), the longer you save your money, the less it is worth. Crypto’s taught me that not only what money is and what money should be, but they also inspired me to become independent and take the risk of becoming an entrepreneur. Understanding crypto means understanding risk.

Risk as the first step to a successful business — Trading

Cryptocurrencies are risky, very risky! So be cautious and do your due diligence. Understanding the risk of cryptocurrencies and using that risk to eliminate probabilities will help you understand the business world more comprehensively. Trading cryptos is already a business. However, by trading with your own money, you increase your risk factor dramatically. So let me give you some tips on how to handle the risk and become the best trader you can be.

1. Understanding cryptocurrencies

This is a hard one. Cryptos are super complicated and very hard to comprehend since they come in such complexity. However, resources like Youtube and Reddit are a fantastic way to get started. Learn about Bitcoin and Ethereum at least. Do your homework here. Understanding something takes away fear. I will link to relevant links at the bottom of the blog.

2. Never invest or trade more than you can afford to lose

Probably one of the most important ones, the golden rule of trading with your private assets. Limit yourself by using the stop-loss function that most exchanges provide and be consistent about your approach.

3. Make mistakes, lose some money

Right now, you are probably asking yourself if you should stop reading but hang in there; I will explain myself. By making mistakes while trading, you definitely will lose some money. However, look at this as an investment. The money you lose is money you paid to learn, but you get knowledge in return. Learning must be painful to be the most efficient. Trust me, if you ever do something stupid while trading, you will understand me.

4. Be consistent

Have an approach or a strategy. By trading with your strategy, you will get a reference point. You can go back to the trades you failed and revise them. By doing so, you will get better with every approach. Don’t do courses if you don’t know what you are doing. Start learning by yourself, educate yourself as much as possible, and then make the most important trade, your first one. Get courses if you are at a point where you need help. However, be careful of what you are buying, find the strategy that works for you, and then go with it. Tailor it until you trade the best way you can.

Being able not to use spare money — Investing

1. Learn how to HODL

HODL is a crypto term and often referred to as “holding.” It means to be able to leave a certain amount of money in a currency with the expectation that this currency’s value will increase over a period of time.

2. Understand what you are investing in

Is the project aligned with your principles? That’s a super important question because it will help you to believe in your project and keep your money where it is. Don’t be too emotional about your approach; keep your cash in for a determined amount of time. Don’t get distracted by buzzy short-term news.

2. Never invest or trade more than you can afford to lose

Only use money that you can afford to lose. Once again, the golden rule of trading applies here as well. If you understand this, there is nothing that can stop you anymore.

3. Be consistent

I know it isn’t easy to see your money increase and not able to touch it. Be consistent with your goals. Being able to avoid the urge to retrieve your money will make you successful.

Noding and dApps

Since I am very interested in trading crypto, I did not have much time to dive into dApps and Noding, but I made 275 USD while playing a dApps game called Axie Infinity. It’s basically Pokemon, but with Axies instead, you can sell them on a marketplace where people are super willing to pay you insane amounts for one of these Axies that you trained and raised. It is exciting, and I got to dig into it deeper. I will update here.

I looked into operating a stake pool for Cardano. However, the incentives of owning a nod are not very appealing right now. If you want to know more about dApps and Noding, check out Reddit, there are tons of lovely people out there who have the same questions as you have.

To wrap things up

Cryptocurrency is the market that brought out the most millionaires in the last 10 years. You could be one of them too, dig into it, and find out more about cryptocurrencies and how they might be able to change your life.

End word

If you want to know more about me and my business journey, do not hesitate to contact me and check out my business and it’sits social media.

Stetterrings.com– My Website, where you can find more information and future blog posts if I get some reactions.

Stetterrings — On Instagram and Facebook

Check it out and leave some love if you like what you see, if you have any tips to become a more successful writer or anything else, please do not hesitate to contact me.

Recommendations:

Coin market cap — That website is a must-have to get started.

Tradingview — For the in-depth analysis of the markets.

Kraken — My recommended exchange.

WRITTEN BY Yves Hofstetter