Obligatory this is not financial advice crypto – read on at your own risk and make sure you are comfortable with your own trades.
The old age saying of only put money into Crypto that you are prepared to lose is extremely valuable. This post will aim to give you a bit of an insight into how I became successful in day-trading crypto and give you some real examples of how I read the charts and try to minimize my risk. Day trading is not my only tactic, it took me years to get comfortable with a strategy that is successful so I’ll also hopefully give you some tips and tricks that will allow you to also get more familiar with the day trading concepts, but while minimizing your risk profile.
My Crypto trading fundamentals
These are some of my fundamental principles with crypto – again it’s not an exhaustive list and I’ve built this up over the years – but some of these set the foundation reasoning as to why I did what I did. Hopefully you’ll see some of the examples in my journey below – but if you want a tldr version of my most summary, then the below list is where to go.
- Research every project you invest into – for 3+ months before you invest. If you cannot explain it in simple terms to a non-technical person (e.g. your Grandma) as why it’s a good investment and what the niche is – you didn’t do enough research or the project is just shit and should be avoided.
- Do not touch leverage you fucking degenerate
- Make sure you have the keys / control your own crypto (the majority of your stack should be held offline, but you can trade some of your portfolio on a reputable exchange e.g. Coinbase/Kraken not some tiny shitty one with that has higher chance of going under)
- Never FOMO – if you miss a spike and pump, you missed the boat to buy more. YOU CAN ONLY SELL into a spike, NEVER BUY. Likewise if the price drops, YOU CAN ONLY BUY into a dip, NEVER SELL.
- NEVER BUY back in higher than you sold for – even if that means holding fiat for months/years
- Get a strategy and stick to it – as in do not change your mind. You can continue to DCA, but only review your portfolio/strategy every 6-12 months and see if the landscape has changed and you want to do something differently.
- Remember it is 100% impossible to perfectly time every single trade (unless you’re a whale with 1B+ in crypto assets that is a market maker). Do not get worried or panic that the price goes the wrong way – you cannot time it perfectly. You do not need to get every trade right – you do not aim for 100% perfection, you just aim to get more winners than losers.
- Never sell at a loss! (There is a couple of exceptions to this – if you review your portfolio after 12 months and want to change into another project then this is ok. Also if your project goes into a death spiral (see LUNA) – then you’re better to get out with 5% of your portfolio than 0.001%)
- Have multiple exchanges ready and with KYC completed – don’t just have 1 exchange that could have downtime during a big spike and leave you holding the bags.
- Do not trade emotionally. Make sure it fits your strategy and principles
- Plan your exit strategy upfront so you can execute it without emotion – this is part of defining your strategy. Do not try to come up with your exit plan during the hype phase and chase the potential gains – you will never time it perfectly and chances are you fail to cash out enough. (Example strategy, for every x2, cash out 10% so you never lose your entire stack)
- Lambos are for noobs – when you get money for a super car you will not want to buy one. Porsche’s are far better machines
- I always want some exposure to crypto (never cash out 100% of the portfolio fully to fiat or stablecoin)
- Do what the opposite of the market says – so check the fear and greed index. (It’s the same as the 2nd point above. Buy when it goes down and sell when it goes up.
Where it all started
Living in the UK, my first exposure to crypto was mining Bitcoin back in 2012 at University. I joined a mining pool and mined maybe 0.5 BTC which was worth almost nothing, and it’s gone to live with the crypto gods in a landfill somewhere in the South-West. Then I did almost nothing for several years – not even really following crypto developments because I had absolutely no money to buy anything with. (I was a student that used any spare money for beer – I have absolutely no regrets)
Then at the beginning of 2018, I was encouraged to make my first big mistake in crypto. I was ‘advised’ by my step-father to invest in XRP, because it was almost a sure fire bet. I think I started to buy in on the way down around £0.90 and the price never recovered. What a brutal landing into crypto – I was almost dissuaded, but then I sat myself down and tried to plan out a longer term strategy that would be successful.
DCA is your friend
My average price was £0.90, on an XRP that was only going down. I was in a lucky position that I was still young (under 30) and being able to make investments while still having my own house (that was priority number 1 which is why I didn’t invest in crypto from 2012-2018 – ask yourself also should you invest in crypto if that money should be better spent elsewhere like a house / medication / car etc). My thought process was – lets go big or go home. If it all goes to 0 – I’m young enough that I can build up another portfolio for retirement. Many people don’t even start in their 20s so if it all goes tits up, I can start again with something safer like stocks in my early 30s.
So what did I do? DCA. Every damn month without fail, I was buying up XRP. I was not trying to spread my portfolio into many different projects (I was not researching much about crypto and to be honest, I cannot follow 10+ projects properly, I would rather follow one in more detail – again part of my own strategy. I wanted to understand what I am investing in)
By the start of 2019 – my portfolio looked something like this, continuing to DCA, the portfolio value was increasing and just about made it to a goal of 100k XRP – I was pumped. My wife (gf at the time) was a little less amused, she didn’t understand this at all and thought I’m just throwing away money in
Researching a backup plan
So XRP didn’t have a great start, the price was going down and I managed to get my average price to €0.30. (Yes it’s euro’s now not £ – I moved to live in the Netherlands in 2019). I continued to DCA but I was starting to think that maybe XRP was not the only horse I should back in the crypto race. This is when I started to spend a lot more time researching other projects and getting to understand the fundamental differences and the terminology (PoW vs PoS etc).
2019 was where I made my riches, but I only continued to DCA into XRP. That doesn’t make any sense right? No, you’re wrong. RESEARCH! It is so damn important, the average investor is dumb as a brick and there is so much stupid money in the financial markets its insane. (Don’t get started on DOGE or TESLA stock – but they are prime examples where things are worth way more than they should – it defies logic).
I was reading up about new projects and trying to find the new project that could come good – I didn’t want a super high risk micro cap that had a big change of going to 0, but also I didn’t want to bet on the big 2… BTC or ETH. So I looked at Coingecko and my strategy was to find a good project that had promise in the top 30. Let’s take a look at the crypto market cap ranking from the end of 2019:
Not all of these projects lived up to their hype – many have come and gone but some have stood the test of time. I was looking for something that would still be around in 3-4 years and ad the potential for more explosive gains. (Logically it seemed less likely to me that BTC would go x10 compared to say Monero which was ranked 16).
So I spent most of 2019 researching up on projects and getting to find their project communities. This is a key point – facts and news are hard to come by in crypto. The best source you can get is from the project itself where you believe you can trust them (there are scam projects and rug pulls of course – if they sound too good to be true then it probably is). But do not rely on crypto news outlets or YouTube shills to give you your crypto news. It’s 2nd hand information and you also receive the info after other people have bought in – they are unloading their bags on you… Don’t be a mug – see fundamental point 2.
My first portfolio rebalancing
So 2019 has come and gone, I’ve been researching crypto and start to understand a bit more about projects. (I can understand and explain in simple English what the top 15 projects are trying to do, and explain the advantages/disadvantages). XRP was going nowhere and I decided, I’m going to change my strategy. So I sold my XRP and bought ADA. I cannot remember the specifics of what I got out at on XRP, but I had about 100k tokens from DCA and went 100% into ADA and continued to DCA. My average buy in for ADA at the half way point of 2020 was about €0.06.
Why Cardano? It seemed like a well funded project that was doing things the right way and I had confidence they would be around in 3-4 years and the risk vs reward looked actually in my favour. (Risk was medium with a good potential – at least that’s how I viewed it). Again I’m still prepared to lose everything, but I see that from 2020, ADA looks like it has a brighter future than XRP and it’s time that I eat some humble pie and change direction.
I did not FOMO and change my strategy when things were not going great with XRP at the drop of a hat, I took my time and made sure I had a solid strategy and logic behind my next move. The biggest fuck up crypto and especially day-traders will do is panic and try to ‘get back their losses’. The past is done and in the past – you can only change the future direction you’re going in so do not get emotional and hold onto the ‘what if’. PLAN YOU NEXT MOVE AND STICK TO THE PLAY!
This is not written as an ADA shill, but the big reason I went into Cardano was that I liked their PoS model (there were other projects that had this potential so I could have chosen another, but this is what I picked). Cardano with PoS seemed much fairer than PoW and much more energy efficient. I have to be honest – compound interest is what really got me. At 5% returns per year – you can double your investment within 14 years. TIME IS WHERE YOU MAKE YOUR MONEY with compound interest, set it and forget it!
The saying of ‘look after the pennies and the pounds look after themselves’ seems like something your Grandma tells you with her words of wisdom – but this is how pension funds make their big gains over longer time periods. This is why I love staking and think it’s a legit way to accumulate more tokens. If the price remains stable then you’re happy earning rewards!
Following market pairs
Staking after a year and continuing to DCA.. My ADA portfolio was growing. The price was also starting to increase and ended 2020 at around €0.20 – I was now up on my €0.06 average and a bit happier – my perseverance and strategy was starting to pay off. DCA during that bad years of 2018 and 2019 had grown my portfolio in terms of fiat, but then the switch to ADA was what made this play successful.
Tracking market pairs is really important – when it comes to rebalancing your portfolio it is probably one of the most important metrics to look at. I do not like looking at the charts of each token in USD or EUR because they often are pretty correlated, I want to see the strength of 2 projects side by side, so make sure you follow the charts of a specific pair! See XRP/ADA example
Day trading doesn’t seem that difficult?
Day trading seems so easy right? But the stats seem to suggest that 90% of day traders lose money. They are correct – most people fail with fundamentals and panic. They rush into something and FOMO or invest in something they don’t understand. Following some of my fundamentals above should help you combat some of this – but again it is not easy.
How did I start?
Well, for the end of 2020 and beginning of 2021, the price of ADA continued to go up but staking and DCA was getting a bit boring. I wanted to look into getting alternative methods to increase my stack and I was getting more confident in crypto having spent longer here. I wanted to dabble with day trading but I was a bit concerned I could lose money and wanted to ‘test the waters’ before I jumped in with both feet.
So I started to manually track what trades I would make based on the current price in excel. I never actually made the trades – but I would say to myself, this is a prime selling opportunity – lets play around with selling 5% of my ADA stack and trying to buy it a bit lower to increase our token amount. I’d then manually say to myself – ok this seems like a nice time to buy back in and would manually input into excel what I would have made, and I did this for 6 months without even trading anything!
Then the moment came – after being successful in trading (hypothetically of course) the time came to put my money where my mouth is and start to trade with my own money. This is psychologically a big barrier to overcome and will test your nerve – but you need to have the stone cold killer mindset. This is just you executing a plan and strategy without emotion – you do not FOMO. You simply look at the charts/numbers and if they tell you to sell, you sell.
My day trading principles
These principles are on top of the crypto fundamentals I listed above
- You can only day trade when the market is volatile – so if it isn’t right it isn’t right. You cannot force it. I can day trade multiple times a day for several weeks in a row then go for a month or 6 weeks without day trading anything! I never try to force anything and only make the trade when my gut says this ticks all of the boxes
- Sell into pumps – market wide pumps or project specific is fine. (Project specific pumps can last longer than market wide pumps on a day trading scale – so you need to check the rest of the market. If your project is up 15% and the entire market is flat – maybe check a bit more into why this is happening and time your exit over the day (read this as DCA out))
- Set yourself a maximum amount of your portfolio that you will cash out into pumps (e.g. Lets say I hold 100k ADA, I will only ever max sell 20k in 5k increments as the price keeps going up – if it continues to go up then I hold the remaining 80k and wait to rebuy. If the price never comes back down – then I’ve just taken profit on the way up and hopefully it’ll be pennies in comparison if it is a legit moon shot and you won’t feel so bad)
- Check the volume and order book for your project on your exchange! See what the support levels look like (if there is a big wall at a psychological level e.g. 20k for BTC – probably it bounces off – so it’s an ideal selling opportunity to buy back lower) – if the trading volume if high on a specific day – then it’s a great opportunity to dump your bags and buy back in cheaper1
- Do not try to time your buy back in to be perfect – you won’t catch it at the fullest extent of the dip. For my tactic – I refuse to buy back in without making 2% on an individual flip – with the aim to complete this 4-5 times in a day if the markets are volatile – trading on 15 min charts. (The project can start and end the day at the same level but if can flip 2-3 times then I am growing my stack while the market is relatively flat). I personally, will go for bare minimum 2% on a flip, but can be upto 15% if the market tanks. I’m not holding fiat for long max 1 day if the markets are going down but also if the price continues to go up – I’ll sit and hold for as long as it takes to buy back in even if that takes months (again I only sell max 20% on my stack in smaller increments) – I am not looking to time it perfect and do not think in fiat terms. I think about how much of my ADA I was able to get each trade.
- Build yourself a tracker in excel where you can track your trades and give yourself some perspective on how you are getting along – bonus points if you build yourself out a compound interest calculator & exit strategy into it to.
- I only make trades when I can manually do them myself when I am awake – meaning I do not set limit orders. I want to be in a position to make the trade myself and reach the market sentiment and charts – again this strategy might hinder me – but it’s what I’m comfortable with. (Only exception to this can be setting a real low buy price and hope some idiot fat fingers a trade – these tend to happen maybe once every 3 months on Kraken/Coinbase for lower liquidity projects and you can hoover up free money this way – best fuckup someone ever made for me gave me 5k free ADA lol)
- Always have a small % of fiat available to buy a ‘black swan’ type of event – or a big unexpected dip. I don’t believe crypto will disappear but I always have some fiat on hand separate from my normal day trading money ready in the event the market turns bad and you see 40% discounts across the board in a single day.
2021 – the year of ATHs
2021 was incredibly and absolutely life changing. I managed to execute my exit strategy and buy myself a nice house and Porsche GT3. Pic of the beast for those car enthusiasts: https://preview.redd.it/z7n5mh53dnt71.jpg?width=960&crop=smart&auto=webp&s=ea7ff4d2c4cad3ae1522c434a954c58f35030736
I cashed out max 50% of my stack and continued to stake, DCA and day-trade. Getting to a point where at the end of 2021 I had traded over $40m in volume and a net worth of over 7 figures. It’s absolutely unthinkable to me that this was possible and I still pinch myself to this day – all of this is not real and just numbers in an app somewhere until you cash out. Life is too short and you can get hit by a bus tomorrow – make sure you do take advantage and cash out some of your profits (even if you’re a little crypto shrimp and that is taking your partner out for dinner instead of buying a house) – get something out of it! If crypto goes to 0 – you better be damn sure you come out of it better than you went in.
The second portfolio rebalancing
ADA had given me incredible returns, with a DCA in and a DCA out – for the profits I was taking I was up x25. It was time to start planning my next portfolio rebalancing. I’m always continually researching and reading up on crypto – so I already had an idea on where my next project could be (I’ll mentally have a top 5 other projects that I would invest in to be prepared). In the summer of 2021 I decided to exit my ADA position and move into LRC – where I remain with 100% of my position until this date without taking any further profits. I continue to day trade successfully albeit with lower volumes because the market is not pumping.
Where do I think I can improve my own strategy?
This is a difficult one – but probably having a better strategy for bear markets. I do great selling into pumps – but if the market is going down, I only have so much fiat to be able to buy the dip. I will continue to DCA but I should be looking at the MACD trends and be able to accumulate more on the down trends. I could improve this by cashing out more on the bench and waiting for a longer dip to take place – but I get anxious with less crypto exposure. (I do not want to miss the pump). Therefore one of my strategies is to make sure I never cash out all of my crypto – only small %’s at a time.
Also as my portfolio grows even more – I should start to invest into other projects and split the risk rather than going 100% in one project (I know this – but I do not have sufficient time with a toddler and work to research 5+ projects sufficiently enough and stay up to date with the news)
I hope my journey was an interesting read and you maybe learned something new. My journey is far from over and my biggest advice is to just plan and research your own strategies that you can execute. If you do this – then you are much more likely to be non-emotional when it comes to trading and that is where a large amount of the 90% of failed day-traders go wrong.
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