How to become a better trader in uncertain conditions!

[AlgoSwan]

Here are my thoughts:

1. For the individual who is looking for some “secret knowledge” regarding the nature of price movements, I think you will be disappointed.

2. What I think about price action can be said in the phrase “ Buy low, sell high. ” When anyone asks me today, “How do you know when it’s high or low?” My answer is, “Read what I have to say very carefully.” That’s it. There is no easy way. Don’t waste your time looking for it. As you might discover, trading is really not about price action anyway. Don’t rip yourself off by trying to reinvent the wheel.

3. I hope you experience everything that I have — all the pain, the glory, the money, the broken dreams, the unexpected joy, all of it. I don’t think you will ever become a lasting success at anything, certainly not trading, until you do. The markets are the absolute best place to find what you are looking for. If you truly and completely desire to become what you could be, very few places will give you such a perfect and lasting opportunity to do so. It took me a long time to accept the lessons market offered me. But, I suspect most people won’t learn anything and will continue to do it the hard way. That is the razor’s edge. It takes a lot of effort to swing a dull axe. Be wise and sharpen the blade.

4. The raw material of your trading art is the unique part of you found within the context of the whole. No one can fully see things the same way you do. You will never see things exactly as I do. No one can take from you or me what we have paid the price to know. It ’ s my opinion that the reason so many people never become a lasting success at trading is because they have never paid the price to really know. The only reason I have achieved what I have from the markets is because I discovered the right questions to ask and eventually had the courage to answer them. What are those questions for you?

5. The fact is the markets are made up of people who all think differently for their own reasons. The only thing we have in common is that we all participate together. In this respect, it’s like riding the subway or standing on a street corner. The guy next to you could just as easily be an axe murderer or the president of Ford. Each has a different perspective of reality and what is happening around him. In trading the only thing we have in common is that we are buying and selling in the same place — each of us choosing to look at the markets in our own unique way.

Continue with the numbers...

[etparle]

Thanks for the read offered some useful insight, enjoyed my cup of coffee over it

[botany]

If you don't have the stomach for higher risk, it might be better to wait out the period of high volatility.
Once volatility decreases, trading might become easier.

[AlgoSwan]

6. The harder I work the luckier I get. The secret to the crypto market is like that: right mind, right habits, right techniques over the long term will produce good results. And it is always possible to be lucky, because this approach puts you in the way of luck, whereas wrong mind, wrong techniques invite (if not create) bad luck.

[~Bitcoin~]

I also don't trust in luck regarding my crypto trading but always watching market moves and executing orders timely always been key to me. I am still in learning phase however i came to know that patience is key in trading including alts trading by this time.

[ashkanb]

definitely a very intriguing & abstract approach to the concept of trading. enjoyed much reading through it.

i didn't really understand what you meant in number 6.
my approach to trading has always been much more methodical/statistical/systematical (probably because that's the way i was thought;)
since i cant really include "luck" in my calculations, i personally don't consider it to be an actual contributing factor in my trading system.

[AlgoSwan]

my approach to trading has always been much more methodical/statistical/systematical (probably because that's the way i was thought;)

Luck word used at no6 for an irony. Of course methodical/statistical/systematical way is the only way to become a master trader.

[AlgoSwan]

7. Looking back, all the pain I endured was completely self-created, as was my ability to get through it. Your trading and your results are created only by you and you alone. There is nothing else involved in any trading of any kind. My understanding came once I was willing to accept that the entire crypto market and all price action are a perfect reflection of my own thoughts. The true study of the BTC and crypto markets is the study of your own thoughts. That’s not to say technical, quantitative or fundamental analysis of the crypto markets doesn’t have its place. It’s just that people who trade greatly
overestimate their true usefulness.

8. The only way to consistent trading profits is through self-study. By that I mean real self-study. The kind that brings you face-to-face with what you don’t want to see. The kind that confronts the deepest part of who you are or think you are. The kind that causes you to change your behavior, how you spend your time, the ones you associate with; even those you love and why.

[Stedsm]

9. Knowing market conditions and then getting into it. Some traders are too much into profits that they just open up a trade without seeing the profitability of that trade. Not necessary that each trade will be a win, and might cause you big loss than you expected. People thought they may make big through Brexit, it happened, but pound was bought to $1.5 before getting dumped to $1.32, the lowest, and many made huge losses by taking the wrong decision.

[deisik]

9. Knowing market conditions and then getting into it. Some traders are too much into profits that they just open up a trade without seeing the profitability of that trade. Not necessary that each trade will be a win, and might cause you big loss than you expected. People thought they may make big through Brexit, it happened, but pound was bought to $1.5 before getting dumped to $1.32, the lowest, and many made huge losses by taking the wrong decision.

Soros did it again, lol?

[SilverPunk]

9. Knowing market conditions and then getting into it. Some traders are too much into profits that they just open up a trade without seeing the profitability of that trade. Not necessary that each trade will be a win, and might cause you big loss than you expected. People thought they may make big through Brexit, it happened, but pound was bought to $1.5 before getting dumped to $1.32, the lowest, and many made huge losses by taking the wrong decision.

Yes ,this is a good statement .i also loss by taking wrong decisions to sell or not sell especially when the price was a little bit dump by an hour then the buying total is something like 0.05 then 0.1 to 0.5 onwards just always they dump and dump .so i don't get the best point on what coin to be invested.

[pooya87]

one thing is always on top of my rules in trading. when in doubt don't do anything!
which means whenever i am not sure about a condition or i can't figure out what is going on and where the price is headed i will never take risks and jump in with hope, i will just stay away until i become certain.

[enhu]

A much easier to trade when the coin is in ICO. the rule of thumb still applies of course buy low sell high.
but this time you can use the FUDster who just want the weak hands to dump and thus price drop too and that's when you can buy cheaper coins. you''ll see this method most of the time on ICO threads.

[freebitcoins4u]

true, i spend lot of time guessing if the price will go up or down and you cant really be sure.
if the price is down, it doesnt mean that it will go up again and vice versa.

[Schuyler]

Only one thing can teach you to be a better trader, and that is experience. If you are a trader who has experienced being whipsawed, seen all time highs, witnessed sudden drops and surges, that would be a good helping hand to make you better. If you are able to learn from past mistakes and accomplishments, that would yield more profits, I think.

[AlgoSwan]

one thing is always on top of my rules in trading. when in doubt don't do anything!
which means whenever i am not sure about a condition or i can't figure out what is going on and where the price is headed i will never take risks and jump in with hope, i will just stay away until i become certain.

There is no such thing as don't do anything on trading/investing/protecting wealth. Because whatever you do, you long on something be it BTC, usd, real estate, or something else. But you're correct on it would be unwise to take risks in uncertain conditions.

[JesusHadAegis]

one thing is always on top of my rules in trading. when in doubt don't do anything!
which means whenever i am not sure about a condition or i can't figure out what is going on and where the price is headed i will never take risks and jump in with hope, i will just stay away until i become certain.

There is no such thing as don't do anything on trading/investing/protecting wealth. Because whatever you do, you long on something be it BTC, usd, real estate, or something else. But you're correct on it would be unwise to take risks in uncertain conditions.

That is true to all veterans in the forum. And we got to admit that some higher ranks are using their ranks to scam or take advantage of newbies. Some newbies may take risk. That even if they fail they would learn a lesson. It's not applicable in this forum. Even higher ranks are taking risks so better to read posts like what the OP created.

[outatime1]

One tip is don't go "all in" at one time. If the price drops and you want to buy, leave a little cash to buy again if the price keeps dropping. This is basically leverage on the buy side.

[AlgoSwan]

10. The control or even the elimination of feelings should be the Holy Grail of crypto trading. If you’re out there high-strung, acting like a loose canon, you’re not trading, you’re gambling. You’re not in control of your trade. Emotions are like frenzied little voices in your head. They get riled when things don’t go as planned. They’re the part of you that freaks at uncertainty. Well, uncertainty in crypto trading is a given, a fixture, so ... what can you do about that?!

(P.S I’ve been struggling with that irony for my entire options trading career. I can never make my feelings disappear. I’ve tried to rid myself of them, but they’re part of me, they’re permanent residents: They’re just as attached as my hands and my feet, and just when things start to get rough in a trade, just when I need to rely on my wits and not my proliferating angst, that’s when they make the most noise.)

(P.S II I’ve learned that this problem must be dealt with proactively. The issue is just as threatening as hurricanes are to buildings. We have to construct strong defenses against our own primal reactions. In crypto trading, as in any other worthwhile endeavor, both anxiety and acquisitiveness are instinctive and neither can be removed, but lessening their damage is crucial. We must learn to corral them and manage them, just like a highly skilled animal trainer who effectively reins in his beasts.)

11. Our minds are hardwired with fear. This is the vital, indispensable reflex that keeps us alive and strong. Fear serves us well when we’re running from lions, or clobbering each other in wars. But when fear overpowers the detached, calm analysis that’s always required in crypto trading, the mechanism meant to secure our survival turns into the cause of our downfall.

Amateur traders, of course, get beat up the most by fear. Their lack of experience creates overconfidence, and that, creates recklessness, which causes nosedives to big losses. The result is someone who’s completely lost his nerve—now he’s completely scared and discouraged. From the quagmire of defeat he must now learn to rise and wield the great tool of true confidence.

True confidence is all about learning the virtue of old-fashioned, joyless-sounding prudence. Prudence is an extremely underrated state of mind. Prudence helps bitcoin traders discover the path to losing a much less, and successfully taming the fear.

(P.S When I was a beginner, the fear factor undid me. It messed with my need to make quick and wise decisions. It came down to two main scenarios. First, and most often, the fear would take over just before I entered a trade. I’d look at my charts and see a perfect setup, and just when it was time to get in it.... I’d stop. My emotions were suddenly churning. I was questioning my system of trading. I was suddenly thinking, The trade is too risky. My jam-up might take just 10 seconds, but in trading, 10 seconds can be way too long.

I eventually learned that the way to quell fear is to find a comfort zone. To find it, know it, and stick to it, always, as a mandatory self-imposed recourse.

Here’s a simple rule to remember: When you feel the fear, lower your risk. Don’t think about it, just do it. Do it right then and there. It’s the obvious way out, but in that kind of pinch, you might hesitate. So learn to automatically do it. If you’re about to make a trade with 10 BTC and the fear factor kicks in, immediately lower your exposure to 5BTC or 1BTC, whichever amount feels okay. I can almost guarantee that your anxiety will vanish if you’re programmed to immediately decrease your exposure.

[AlgoSwan]

12. Greed, just like fear, is inherent in humans, and it can’t be avoided, only tamed.

In crypto trading, we actually need a little greed. That’s the fuel that keeps us going. Acquisitive goals, the motives and the reasons to take higher risks, distinguish us from plodders and wage slaves.

But greed can create overconfidence. Greed can make a crypto trader reckless. Diametrically opposed to the fear factor, the greed factor causes the amateur to jump into numerous trades without enough hesitation. Uncontrolled greed can push him to break his sensible system, hazard trades he normally wouldn’t, and get himself in all kinds of trouble.

Greed is by far the most dangerous emotion. Fear, though detrimental, won’t make you lose big. The greed factor, however, can destroy you. Greed can lead to excessiveness, and in the end, inconsistency. Your greed can land you in a devastating number of ruinous trading situations.

The greed factor causes two downfalls.

The first can occur when you’re in a good trade, and you exit with a small well-planned profit. “Good” and “well-planned” are important terms here; they suggest that you’ve been prudent and patient.

But now you’ve just noticed that the bitcoin price keeps shooting on upward. So you eagerly opt to get back in, and follow the run-up even farther.

And that’s when your avarice kicks in. You’re avidly re-entering at a much higher level than you did in your good trade, and of course you’re expecting, with beginners’ foolish courage, to see the price trade to the upside.

Unfortunately, it does not. The price turns against you, and now you’re losing money, and you regretfully, belatedly recognize that you entered these straits on emotions.

And there’s more. The greed factor isn’t yet through with you; here comes downfall number two. With the trade gone against you, now you hold. You hold with the hope (and isn’t hope an emotion?) that the price will go back up.

You’re now at the mercy of the market, with all your good planning shot, and all I can say is, Good luck. Are you getting a sense of the proverbial snowball, getting larger as it rolls down a slope? That’s the greed factor at work in you, doing its dubious magic.

(P.S One day I was trading BTC/USD and I stuck with it all day. I was trading smart. I was entering only when I knew my exit points. I was only buying 5BTC. It was a good day to trade—there was little volatility. The BTC price kept trending up. Virtually every trade I entered went up to my limit price quickly. Easy trading!!

It was 5:00 P.M. (London time), I was up about $162.5 for the day. I’d been trading consistently all day, in and out, with $10, $20, and $30 profits. I had a few stop/losses of $20 to $40, but that’s normal and expected. In this London evening of trading, I was watching the charts and lo and behold, I noticed a big spike in volume in BTC-e and Kraken. Then the price shot up about 15 dollars—in just under five minutes. It hadn’t spiked that much, that quickly, all day. There was no particular news about bitcoin, and the ETH and other cryptos were relatively steady.

It annoyed me to miss out on that spike. I wanted to make more money. I wanted to make a nice $500 profit for the day; I wanted a few more.

I wanted ... I wanted ... I wanted. That’s greed. And then it turned to smoldering envy. I felt as though everyone was getting rich but me. All day I’d been making chump change, and now that the BTC was running strong to the upside, I coveted a piece of that pie.

I began to psyche myself up. I convinced myself that the BTC was going to keep ascending gloriously. I let my greed morph to that dangerous headiness that makes you or breaks you—and breaks you more often. I abandoned my prudent consistency. I purchased 10BTC.

And soon after I bought that Bitcoins, BTC prices dropped $5.

No problem; I was used to $5 moves. That’s how things went, all day. The 1BTC meant a $5 move would gain or lose me $5. But this time, remember, I was strapped to 10 bitcoins. So this time, I was down $50.

I lost control. I could feel the greed completely take over. I didn’t care; it was just like a gambling compulsion. I began to average down. I purchased another 10BTC, then another, and another. By the time I realized how screwed I was, I was trading 50BTC.

The Bitcoin price dropped an average of $40/ on my 50BTC, accumulated while averaging down. Within 30 minutes, I was down $2,000 (50BTC × $40).

My greed then collapsed into panic. I knew that if the price continued to drop, I was going to lose much more money. So I surrendered and sold all 50BTC at a $2k loss.

Up till five o’clock I traded consistently in 5BTC. The very first 10BTC just happened to be near the top of the late-day spike. If I had purchased only a 5BTC I would not have gotten into so much trouble.)

[barbara44]

Every things take time to multiply, some multiplies with whole number and some with integer. We should have a power of patience to wait. If we invest in trade and want a profit from first day then we can’t see it. But if we wait and see the profit after a long time then we can see the profits certainly.

[yayayo]

A lot of advice is given in this thread of doing things somehow "differently" to become a successful trader. However I doubt that most of these recommendation is really helpful, since they can't be operationalized in a consistent way. They lack proper definition.

I'd argue that the vast majority of individual trading "strategies" are not consistently successful. If a trading method can't be implemented as a logical algorithm by defining all information that lead to a certain trading decision, I would not expect a positive return from it in the long run.

In general the probability to exit trading with a negative return is far higher than being successful. Traders tend to overestimate their ability to predict market movements, because they generate their predictions from the assumption that past developments have something to do with the future. But this assumption is fundamentally flawed.

ya.ya.yo!

[AlgoSwan]

Traders tend to overestimate their ability to predict market movements, because they generate their predictions from the assumption that past developments have something to do with the future. But this assumption is fundamentally flawed.

That's correct. Most of the guys writing trading books, courses, and hosting TV shows are not professional money managers. Hard truth: if they were such outstanding traders, they would be trading professionally. That is where the money is and that is where the cream rises to. The best traders in the world are likely guys whose names you have never heard.

[Herbert2020]

Traders tend to overestimate their ability to predict market movements, because they generate their predictions from the assumption that past developments have something to do with the future. But this assumption is fundamentally flawed.

That's correct. Most of the guys writing trading books, courses, and hosting TV shows are not professional money managers. Hard truth: if they were such outstanding traders, they would be trading professionally. That is where the money is and that is where the cream rises to. The best traders in the world are likely guys whose names you have never heard.

well, that is not entirely true.
i agree that many of those courses,... are made by people with little trading knowledge and they are only looking for selling their product and making some little money.
but there are still a lot of information and books on the internet that are written by experts that contain valuable contents. you just have to be able to find the difference and only use the good ones.

[AlgoSwan]

13. Confidence / Overconfidence: Confidence in trading styles is similar to the way a busy cook relates to his pot mitt. The wise cook, no matter how harried, always takes the time to put on his mitt before he grabs a pot off his stove.

So it’s not the inanimate mitt that protects him; the bottom line is that it’s the cook himself. Knowing when it’s necessary to put that glove on and having the good sense to do it is what he’s really relying on. Accordingly, the crypto trader must fully understand that it’s his judgment, much more than any system he’s learned, that affects his trading the most.

Confidence, just like the cook’s pot mitt, is a tool. If the crypto trader’s confidence wildly balloons and he becomes zealous, stubborn, or careless, then he’s just like the heedless, inexperienced cook who thinks he’ll get by without his mitt. In both of those scenarios, overconfidence burns.

(P.S I’m aware of no chart pattern or crypto analysis methodology that shows you a confidence factor. No system will tell you to buy or sell with 100 percent certainty—because there simply is no such certainty!

But we crypto traders need confidence—lots of it—in spite of the uncertainty. Without that mental asset, there would be no trading profits. Too much of it, however, can destroy us. Confidence it is a tool that must be utilized, but always judiciously. Otherwise, it gets in the way. It tosses good judgment in the trash. To literally understand this, you need only to think of the hurryup cook who doesn’t use his mitt when he should. You know what will happen to his hand, and then his ability to work.

For the crypto trader, overconfidence is that detrimental. Mastering confidence as a tool, not an obstacle, is a lifelong, ongoing process. I am still growing in that process, and at this point I’ve learned some reliable skills in it.

But during my first weeks of BTC trading, my confidence levels were overzealous: They were hardly a powerful tool. Soon I began to understand that overconfidence led me astray into two classic trading mistakes. Those mistakes are ignoring your predetermined stop/loss price and holding too long.)

[AlgoSwan]

13b. Predetermined SL:

I enter into a trade, it immediately goes against me, and I hold. This is after the triggering of my predetermined stop/loss price—and I don’t give a damn.

To hold is an act of stubbornness. It’s a lethally wishful kind of thinking. This is where I’m allowing my confidence to become, not a tool, but something irrational. Now I’m just being a daredevil, like a bungee-jumper. I’m bouncing in midair, and risking a deadly collision.

And then I make things worse for myself. I buy more—I average down.

At this point I’ve blundered into the minefield of way-too-confident trading. To buy more at a lower level, after the initial trade has gone against me? What was I thinking? Now my emotions control me. I got into a trade and it down-slid, and now I’m irritated and worried, and I’m kicking myself for failing to wait for it to decline before buying in the first place.

So basically, I’ve now bucked the system. Now all I’m doing is gambling. I’m betting that the price will go back up, with the faith of the fools at casinos.

Holding too long:

I’m in a trade and the price goes up, but in my opinion, not enough. So my overconfidence tells me to hold for just a while longer. Then (of course!) the BTC price retreats to break-even, so I’ve lost out on a good trade. That same trade might even continue to retrace into the red.

It doesn’t get any more ugly than that. I feel like an idiot for failing to sell when I had a profit and I should have had a clear plan of exit.

So now I could see that it was getting imperative to harness my confidence, somehow. To grab it and throw it onto a table, deep inside my head, and strap it down and hone it into a tool that would fit my needs.

After a day of that self-search, I understood what to do. My confidence, if made precise with prudence, would help me pick my own realistic entry and exit price levels. Overconfidence amounted to a careless lack of that precision.

I needed to trust and never abandon a system of reliable stop/loss and limits. I’ve never regretted those insights.

Trading with confidence is all about being familiar with your cryptocurrency, and prudently sticking to your plans. Trading with overconfidence is neglecting to know your crypto and haphazardly changing the exit points while already in the trade. If you’re an amateur trader, that’s a very perilous stratagem. Only the experienced trader can handle it, and even he might regret it.

If you think you can trade like a pro, then most likely you’re overconfident, and most likely, you’ll lose your shirt. Stick to the program, every time! Be reasonably certain, not reckless! If you’re a born risk-taker or daredevil, it will take force of will to achieve that.

[enhu]

One way to trade good still is by follow the buy order and sell order of the experienced traders on exchanges.
you need not to be an expert by doing this yet of course you should at least know what they are doing.

[AlgoSwan]

14. The most dangerous time for any trader occurs right after a major loss. The instinct for revenge trading (the desire to get it all back at once) can be far more damaging than the initial loss, leading many
traders to make impulsive, irrational decisions that often lead to complete destruction of the account.

Protect your capital—Protect yourself by using Crypto Options:

Clint Eastwood would be a great crypto trader because he told the Million Dollar Baby that rule number one in boxing is to protect yourself. And I think the same is true in crypto trading. If you want to trade, your capital is everything. So, if you want to be a great trader, you have got to protect that capital. No capital, no trading, no life and its the same whether you want to be a Million Dollar Baby in boxing or a Million Dollar Baby in crypto trading, I think it’s the same thing—protect your capital.

(P.S The market will forgive many things including bad, even stupid trades, but it will not forgive the loss of capital. Once all of your capital is gone there is no opportunity to recover. Learn how to protect yourself by using crypto options first.)

[Stedsm]

15. Always use TP/SL.
You must have a set goal and only that should be reached, no more greed. If you have decided to get out at a specific point, just get out without touching your take profit, and never let your loss make you go bankrupt. Always use it to minimize your losses because something is better than nothing as it would help your recover in the end.

[Nascor]

you should always try to diversify and "hedge"

hendging is when you are buying something which "reverses" your initial investment (to some extent)

for example, when shares are high (stocks etc.) gold tends to decrease in value, and vice versa

so, if you have a lot of shares, buy some gold as this will minimize your loss in a downtrend

[zombie6]

Thanks for the read offered some useful insight, enjoyed my cup of coffee over it

Are you under the shpeka? I fucking can not understand what you wrote, dude 
having a cup of coffee  aaaaa

[deisik]

14. The most dangerous time for any trader occurs right after a major loss. The instinct for revenge trading (the desire to get it all back at once) can be far more damaging than the initial loss, leading many
traders to make impulsive, irrational decisions that often lead to complete destruction of the account.

Protect your capital—Protect yourself by using Crypto Options:

Clint Eastwood would be a great crypto trader because he told the Million Dollar Baby that rule number one in boxing is to protect yourself. And I think the same is true in crypto trading. If you want to trade, your capital is everything. So, if you want to be a great trader, you have got to protect that capital. No capital, no trading, no life and its the same whether you want to be a Million Dollar Baby in boxing or a Million Dollar Baby in crypto trading, I think it’s the same thing—protect your capital

Some people can learn it only the hard way

While some cannot learn it at all. I once tried to explain to novice traders here that their primary objective (at least, first time) should be not earning insane or just handsome profits (that will never be an issue once they learn how to trade sanely and safely) but preserving their capital at all costs in the first place. Needless to say, I was basically laughed at and humiliated by all those crowds of wannabe traders flooding the forum back then. I'm curious where they are all now