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Part one - Free Crypto training course
1. HOW MUCH TO INVEST.
Don't invest at the cost of ruining your life. Your investment should always be an almost insignificant amount. If you lose it, it should hurt a bit but not ruin your life. Don't go all in. EVER. Don't invest more than you can afford to lose.
2. TRADE SPOT. THEN FUTURES.
Practice a lot BEFORE trading. Watch live charts, draw your levels, then paper trade. After you're comfortable with this, trade spot for sometime and ONLY THEN move to leverage/futures. Using leverage without spot experience is a crime.
3. TWO SAVIOURS.
You cannot and will not survive in the long term without following the two tools of capital preservation.
i. Stop Loss.
ii. Risk Management.
Both these tools are FAR more complicated than they sound. Read, understand and ONLY then trade.
4. DON'T BE A HERO TO FIGHT THE TREND.
Don't try making quick trades by fighting the trend. Use the weekly time frame and the 50 day moving average to find the trend and trade only in the direction of the market.
5. NO GOOD ASSETS.
There are no good and bad assets. Don't get attached to a coin or a stock. Your aim is to make profits, to buy low and sell high. Keep your logics, attachments and emotions away and TRADE THE CHART. Eg. Cardano is shit but I made good money there.
6. EXIT AT THE FIRST SIGHT OF BEARISHNESS.
Don't pray for a trade to go right. Don't hope. Your aim is to leave the market ASAP. Once the trade goes the opposite direction, don't give control to the market and keep hoping. EXIT. Start afresh. Cut your losses. Keep them small.
7. PLAN.
Don't trade if you don't have a planned entry, exit and invalidation point. Listening to opinions of others will always get you rekt. Don't even listen to me. YOU have to plan your entry, position size and invalidation points.
8. IT'S SIMPLE YET MOST DIFFICULT.
Trading is easy, you don't need complicated tools and 5 monitors. My mentor still trades with S/R lines & volume, on his laptop.
The catch is,
- you need a plan.
-Manage position size.
-Pre-determined entries.
-Exit on invalidation.
-Cut losses.
9. TRADE MORE. When learning, trade a lot. A LOT. Trade with the trend, as many times a possible. Your methods need real market testing. Trade more, let the market give you feedback, as much as possible. The only way to get better at free-throws is to keep practicing.
10. LEARN. LEARN. LEARN.
Trading is the most rewarding profession, ever. You can't expect it to be easy. Journalise all trade. Take notes and keep learning. I have made tutorials for all topics here. It works. It's free.
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Part two - Free Crypto training course
Bitcoin Trading MasterClass in PDF PART ONE
Part 1.
-Jargons
-How to use TA
-Finding entry zones. W
Link to Course PDF Viewer or to Download a copy
We begin from the extreme beginning and will cover all concepts of trading in the following sections. Read. Practice.
This is ALL you need.
Bitcoin Trading MasterClass in PDF PART TWO
- Deep Dive into Candlesticks.
You should NOT be trading if you don't understand candlesticks fully.
Let us try to master it in this PDF. AN INTRODUCTION.
Link to Course PDF Viewer or to Download a copy
PLEASE share. It might help a beginner.
Free Bitcoin trading master class
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Part three - Free Crypto training course
Mastering HORIZONTAL SUPPORT and RESISTANCE for Trading Bitcoin.
This is the most comprehensive real-world guide to Support and Resistance.
This is everything that you need to master it.
It’s an exhaustive guide, don’t read, STUDY IT.
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Part Four - Free Crypto training course
How not to lose your money
Fact- 90% of the traders lose money. We will learn how to be in the top 10% by mastering Risk management in the next few threads. The most important but most ignored concept. According to me, ALL of trading knowledge is futile if you don't follow Risk Management. Period
Since 90% of the traders lose money due to lack of risk management, we don't need to further discuss its importance. If we don't manage risk mathematically, we WILL FOR SURE lose all the capital. FOR SURE. In this thread, we will try to understand 'Optimum position sizing'
The 5% Rule NEVER risk more than 3-5% of your portfolio on a single trade. 3% is what I prefer, 5% is an aggressive approach. This might sound bizarre, a waste of time but let's understand it further.
The total amount risked in any one market should be limited to 5% of the total equity. This 5% refers to how much the trader is willing to lose if the trade deosn't work. This is important consideration in deciding how many contracts to trade and how far away a protective stop should be placed. A $100,000 account should not reish more than $5000 on a single trade.
Trading with only 5% of your capital doesn't mean your trade/position size is only 5% of your total capital. What it means is that you're RISKING 5% of your equity in a single trade. Whatever happens, you will not lose more than 5% of your equity on a single trade.
Trade Size will be determined by the LEVERAGE on that 5% equity. This is illustrated in the note below. Notice how 5% equity at risk of $100,000 becomes a position size of $100,000 by risking just $5000
total Equity $100K
Capital risk 5% is £5000
Trading size = Leverage x Capital at risk ( eg. Leverage at 20)
= $5000 x 20 (Leverage should be chosen based on the needed stop loss point.)
Leverage usage is a function dependent on the Stop loss determined based on TA. I use only technical analysis to determine the stop loss and the leverage multiple shall be determined by it. We will learn the application of leverage in the "Stop Loss" thread.
But Why risk so little capital? Per math, even if you have a very high strike rate (ratio of winning trades) eg 70%, there will come a time when you will have 6 consecutive losing trades. High equity risk trades are historically proven to deplete all capital as explained below.
The chart here shows the consecutive losses a trader will DEFINETELY face over a period of time with the given hit rate. Now imagine if someone with a respectable hit rate of 70% risked 40% of his capital in each of the 6 losing trades. REKT.
It might come as a surprise that the most successful and long term traders have a strike rate of around 40%. The best traders that I know personally and even myself don't have that high of a hit rate. Then how does such low strike rate lead to profits in the long run?.....
The best future traders make money on only 40% of their trades!!! Most trade wind up being losers. Even though they wrong most of the time they make money because futures contracts require so little margin. Even a slight move the wrong way results in a forced liquidation. A trader might probe the market many times to catch the result they are loking for.
The only way to come out ahead is to ensure that the $ or £ amount of the winning trade is greater.
The profitability is gained from obtaining a good R:R (Risk to reward) ratio over a period of time. Link to graph
Don't risk more than 3-5% equity on a single trade. -Position size matters, not leverage. -Your position size can be as big as needed while risking only 5% of your equity. -Leverage needs to be determined keeping the stop loss in mind. DON'T RISK MORE THAN 5% ON ONE TRADE.
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Part Five - Free Crypto training course
Technical Analysis Masterclass - Risk and Reward
'Entering the trade' Entering a trade without ascertaining a certain things is gambling.
In this masterclass we will learn the pre-requisites to enter a trade.
DON'T ENTER A TRADE WITHOUT DETERMINNG THE FOLLOWING.
We understand what reward to risk (popularly called risk to reward) is. It will be denoted by R:R. We will also try to bust a few myths about R:R and how to avoid losing trades. Before entering a trade, you need to determine 3 things.
1. Entry trigger
2. Stop loss
3. Target
1. Entry trigger = Reasons for entering a trade. There could be multiple reasons or a single reason for entry. Generally a set of reasons AKA confluence is a higher probability trade and a generally a safer entry. Example of an entry trigger.
2. Stop Loss. The price in the opposite direction of the trade where the trade is exited, at a loss. At this level, the reason for the entry becomes invalidated according to TA and the price can then move in the opposite direction, probabilistically. Example chart
3. Target is the possible price level that the asset might touch based on previous trends or confluence AND where a possible reversal could occur. Target is the next path of least resistance from where the price might reverse. We will always ONLY use TA to determine all 3.
Example Chart
A combination of the three coming together forms R:R. We will try to understand what really R:R in this thread. R:R simply is the ratio of the distance between entry and target, and entry and the stop loss. Here is an example of the R:R ratio
R:R is generally denoted in ratio form such as 2:1 or 3:1. If the target is 10% above the entry and the stop loss is 5% below the entry, the RR is 2:1 YOU SHOULD NOT BE ENTERING A TRADE UNLESS THE R:R IS KNOWN.
Myth. A fixed minimum R:R is necessary for taking a trade. Even Murphy in his book has advocated for the same but in my opinion it is a wrong benchmark to have. Sticking to a fixed RR can prevent us from entering a high probability trade at times, eg at confluences.
So what is the right way to use R:R and how do traders with low Win rate turn out to be profitable? Profitability depends on 2 factors. R:R and win rate. Study the chart Here.
The chart describes how much R:R is needed for a certain level of win rate. Eg. If your win rate is 50%, you will be at breakeven at a R:R ratio of 1.
The above might seem confusing but the crux of the matter is, -Test your strategy -Find your win rate -Use only the R:R setups which suits your win rate. Eg. Always choose a trade with R:R greater than 2 if win rate is around 33%
Conclusion.
1. Find your win rate. Choose trades with R:R which suits your win rate.
2. Base the above only on TA.
3. Never enter a trade without knowing the target and SL.
4. Don't get stuck with a fixed R:R.
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Part six - Free Crypto training course
MASTER-CLASS on Stop Loss here
99% of the traders fail because they don't understand Stop Loss. Stop Loss is the most important topic to prevent liquidation and avoiding bankruptcy.
Stop loss Chart
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Part seven - Free Crypto training course
Volume Analysis
Understanding price and volume
Link to Volume Analysis