Looking for a hassle-free way to manage your cryptocurrency portfolio? Look no further than the DigitalCurrencyTraders.com CryptoBalanceBot – Read the news release about this proven crypto signal service that has been providing successful crypto trading signals for years!
With CryptoBalanceBot, you can sit back and relax as our senior traders monitor the crypto market 24/7, analyzing market trends, identifying opportunities and managing risk. Our system automatically rebalances your portfolio as altseasons come and go to ensure optimal returns.
We also provide real-time trading signals to traders follow the portfolio without requiring the bot connection.
AltSeason, Automated
With CryptoBalanceBot, you’ll also enjoy a host of other benefits, including:
Increased profitability: Our trend following approach is diversified to maximize your returns, giving you the best possible chance of success in the crypto market.
Time-saving convenience: With automated portfolio rebalancing and trading signals, you can free up your time to focus on other things while still reaping the rewards of our cryptocurrency research.
Peace of mind: Our system is based on risk management first. We position to protect our investments, providing you with peace of mind and the knowledge that your portfolio is in safe hands.
Easy to use: The 3commas platform is easy to navigate and understand, making it simple for even the most novice investors to connect and have our bot manage a part of their cryptocurrency investments.
Who is it for?
You’ll need 0.2 BTC to follow the entire list of coins.
Learn more about the CryptoBalanceBot today and start taking advantage of our proven approach to trading Altseasons – and automate your cryptocurrency investments!
These software programs are designed to execute trades on behalf of the trader. While trading bots can offer a range of benefits to traders, they also come with a number of disadvantages and dangers. Get to know exactly how your bot will work before deciding to automate your crypto trading with a bot.
A crypto portfolio rebalancing strategy can enhance performance and outperform the average by using the filtering technique of a moving average crossover to flag the first moving coins when Altcoin Season conditions are right.
By assigning our team with the task of monitoring the ALT/BTC price spreads on your behalf, you can take advantage of the volatility of the market and we ensure you are positioned to make a profit – and you are not spending all of your time watching charts and analyzing data. Our bots trade cryptocurrency altcoin season trends with the correct strategy making your money work for you, while you’re doing other things.
Many traders in the cryptocurrency market focus on trading altcoins against the US dollar. However, by focusing solely on this approach, many traders may be missing out on valuable opportunities that trading the ALT/BTC price spreads can provide. Let’s explore how The Altseason Co-Pilot trades the ALT/BTC spread with a simple daily routine can help YOU achieve more success with your Cryptocurrency Portfolio Management in 2023.
Identifying Long-Term Trends for Altcoins
We analyze all of the ALT/BTC spreads each day so our traders can gain insight into long-term trend averages for altcoins. This data can provide traders with a broader perspective on market movements and help them identify when altcoin seasons may be approaching.
By staying current with these trends, a simple daily routine is all that is needed to position your money so it can capitalize on the insane pumps in crypto.
The AltSeason Co-Pilot, formerly known as the Crypto SmartWatch and the Crypto BullMarket Watch
Taking Advantage of Portfolio Diversification
Another significant advantage of trading the ALT/BTC spread is that it allows traders to take smaller position sizes and spread their portfolio across multiple cryptocurrencies.
By diversifying their portfolio in this way, traders can potentially benefit from explosive moves in the hottest cryptocurrency markets while minimizing risk in those coins that have not follow through.
With this approach, traders can take advantage of a wider range of opportunities in the cryptocurrency market – while keeping risks low.
Diversify into the Altseason Co-Pilot Cryptocurrencies, based on trend following trading plan.
Exit and take profits when the trend is over.
Implementing Effective Trading Strategies
To achieve success in trading the ALT/BTC spread, traders must implement effective trading strategies that consider a variety of factors, including market volatility, technical analysis, and risk management. By focusing on these critical elements, traders can make informed decisions and minimize the risks associated with trading cryptocurrency.
The Altseason Co-Pilot for Cryptocurrency Portfolio Management
Since 2016 our focus has remained on trading the ALT/BTC spread. We want to trade altcoins only when they will grow the number of Bitcoin we have – because we believe Bitcoin will go very much higher in value, while the US dollar… will not.
To achieve success with this approach, traders must manage risk until the trade is in Stage 3, and then surrender the results to the market.
By doing so, our traders systematically keep their losses small, and leave their winning trades to maximize their returns.
The Altseason Co-Pilot is an experienced aviator who has navigated through every altcoin season since 2017
The AltSeason Co-Pilot can provide valuable opportunities for cryptocurrency traders who want to become crypto millionaires.
Stop over trading, and focus on identifying long-term trends for altcoins and taking advantage of portfolio diversification.
Members video update – login to view the video and portfolio update.
Feb 14, 15 and 16, Bitcoin prices spiked higher and Bitcoin Dominance also rose – indicating that bitcoin surged in usdollar value more strongly than the altcoins as a group. As we rebalance our crypto portfolio today, the two-part focus starts with
double checking all the exit status coins,
and an important focus on reviewing the profitable Stage 3 coins and plan the trade details if we find a place to add on and increase the size of our successful positions if markets move in our favor.
The group of altcoins can be sorted into the group of coins that are out-performing bitcoin, a group of coins that are hovering at about the same, and a group of coins that are under-performing. The Crypto SmartWatch spreadsheet is a powerful tool that lets us look inside BTC.D and sort out those good projects from the rest. Our crypto signal provider offers even more detailed trading service for those who are serious about becoming a crypto millionaire.
Feb 13 saw a significant up-tick in Bitcoin Dominance chart. This indicates the weaker projects that are in Stage 2 of the trade may be hitting our protective stops.
Altcoin Portfolio Rebalance
As we move from stage to stage in the trading plan, we have a different set of options in the flowchart in front of us.
I review 90+ coins from 1INCH/BTC to ETH/BTC and compare the stop levels for the positions we have open in our crypto signal provider PRO ALERTS model portfolio.
Price patterns were making a 1-2-3 bottom formation and showing early potential to break higher.
We could see the trading signal setting up and completed Stage 1 of the trade for our premium group. That is, we identified the entry, exit and stop and provided a screenshot to show how the trade matches our trading plan that anyone can learn.
ALERT triggers to HOLD
The spreadsheet sends a notification to our Discord channel and the model portfolios are updated in the website.
We get ready in advance of the 1-2-3 pattern breaking out so we can calculate our risk and prepare our position size correctly before the trading signal flashes.
Profit Target Hit
When prices hit our profit targets, one option is to take partial profits and cover the cost of the trade. Others may choose to close the trade and take all the profits. Both are good options.
Our PRO ALERTS remains open to the potential for a much larger trend and seeks to move the stop up on this trade and continue to hold until the 12 hour EMA crosses.
In fact, we are anticipating a pull back so we can add on and increase our exposure in this proven mover!
Positioning for the explosive growth in crypto is a good idea when a bottom formation is in place yet managing risk is always a first priority.
While most coins follow the general altcoin seasons and trend together, there are always a group of early movers and a group of laggers.
We can never know which will perform best in the future so we must diversify into those coins that cross the AltSeason TradingView Script entry signals.
We create crypto signals that work using a combination of trendline, chart pattern and our customized pinescript TradingView indicator created specially for cryptocurrency altcoin season trading. Our entries and risk control are planned in advance – but the exit has a number of options that will dramatically change your results.
Altseason TradingView Indicator that anyone can actually use. Customized Indicator and color coded signals can help you learn to trade crypto on your own. Our exclusive index uncovers the trend dynamics of altcoins to reveal the bell curve of best performing cryptocurrencies in the 2023 Altcoin Seasons.
Our Altcoin index signal is a compilation of our custom tradingview indicator, trendlines and chart patterns that objectively measure the price trend direction for over 300 individual coins. Our research team provides statistical insight into the overall trend momentum of the crypto market and filters the data to provide a simple daily action matrix.
Altcoin Index Live
Track the price of bitcoin and the changes in bitcoin dominance and stable coin dominance, along with the overview of the Crypto SmartWatch AltSeason Index.
How To Catch AltSeason Trend Changes
The Control Panel of our Crypto SmartWatch reveals Altcoin Season opportunities. We filter the individual altcoin trading signals into a Daily Action Matrix that makes it simple to rebalance a portfolio of cryptocurrencies in the ALT/BTC pair charts. We focus on diversifying your portfolio by investing a small amount in the variety of different altcoins as they pass our trend change signals.
Customized TradingView Indicator
Our adjustable EMA crossover indicator provides a color coded visual way to verify when the trend change signal flashes.
TradingView Indicator Backtesting
Outstanding results in back testing and forward testing gives our team great confidence in providing instruction, education and coaching to support new traders to build the daily habits.
Here are a couple samples from the strategy tester results:
Custom Tradingview Indicator Backtesting Results
Altcoin Season Index: Is it Altseason right now?
Altcoin season refers to a period of time when altcoins are growing in US Dollar value faster than Bitcoin is. We can tell when it is altcoin season when Bitcoin dominance is dropping and bitcoin price is rising or sideways. But that is still a very general way to identify when altseason is about to approach.
The Crypto SmartWatch is a way to look inside bitcoin dominance to see which are the front running coins that are pushing the change in bitcoin dominance. In other words, while the crypto markets tend to move together in a wave – the individual coins within that wave can be separated into the best performing coins and the flatliners that are dragging down the average.
Together with our risk control rules, The 5 Stages of the Trade and the customized Altseason TradingView Indicator – we get the Crypto SmartWatch Control Panel to filter a simple daily action matrix to assure we never miss another Altcoin Season opportunity in the ALT/BTC pair index.
Crypto Portfolio Rebalancing Tool with an objective trend following strategy that anyone can actually use! Diversify into the next Altcoin Season at the right time.
Diversification is a key strategy for low time-maintenance crypto investing. One way to achieve diversification in the crypto market is by using a crypto rebalancing tool, which can help to manage and optimize a crypto portfolio with the current phase of the Altcoin Season.
A crypto portfolio rebalancing strategy can enhance performance and outperform the average by using the filtering technique of a moving average crossover to flag the first moving coins when Altcoin Season conditions are right.
This is why we created the Crypto SmartWatch color coded spreadsheet. We now have an objective, clear visual tool for looking inside Bitcoin Dominance data and get specific about timing the start of each Altcoin Season.
We use objective data to determine when to expect the next Altcoin Season
The Crypto SmartWatch can boost the the performance of a portfolio by filtering a large number of digital assets to help to catch the earliest moving assets. Diversifying into this early-mover group will dramatically increase the likelihood that at least some of the coins in the group will out-perform the average.
What triggers Altseason?
Some of the known factors that can trigger ‘Altcoin Season’, or bull markets in cryptocurrencies include:
Positive regulatory developments: Clarity and favorable regulations on the use and trade of cryptocurrencies can increase investor confidence and lead to more mainstream adoption, which can drive up prices.
Institutional adoption: With better regulatory oversight, institutional investors, such as hedge funds manager and banks, will finally have the green light to move into the cryptocurrency market. This may increase demand and begin a sustained bullish trend.
Increasing mainstream adoption: As institutional business can begin to take advantage of cryptocurrency transaction efficiencies, better solutions make crypto easy and a bonus for the customer to use… demand will naturally rise for these assets, leading to higher prices.
Economic Factors: Global economic factors such as interest rates, currency valuations, and inflation always have an impact on the prevailing price trends of cryptocurrencies.
Innovation in blockchain technology: The advancement of a blockchain technology can also lead to a bull market in specific cryptocurrencies or tokens. As more people get excited about the benefits and potential use cases of the technology, prices may surge and fall back in dramatic and unpredictable ways known as Popcorn Moves.
How Do You Measure Altcoin Season?
We begin our measure altcoin season by reviewing each coin against a standard trading signal.
Then we count the number of coins in each stage of the trade to get our Daily Action Matrix and
we plot the daily totals over time and get a birds eye view of the altcoin season trends as they come and go.
Our Crypto Portfolio Rebalancing Tools
In a simple example, consider a moving average crossover that compares the movement of two different moving averages to identify buy or sell signals. A buy signal is generated when a short-term moving average (such as a 20-period moving average) crosses above a long-term moving average (such as a 60-period moving average), and a sell signal is generated when the short-term moving average crosses below the long-term moving average.
Check Out This Before And After Example
By filtering out the assets that are not passing the crossover, you can focus on the assets that are currently proving their uptrend may have started and avoid assets that have not yet crossed the threshold.
Remember, moving average crossovers above are just a simple example.
The Crypto SmartWatch portfolio rebalancing tool is based on a transparent trading plan that our team uses with trendlines, chart technical patterns and our custom Exponential Moving Average crossover indicator to manually review and identify buy and sell signals for each crypto asset we are tracking.
Altcoin Signals You Can Actually Use
How long does altcoin season last?
If we review 2021 and 2022 we can see that each of the altcoin seasons lasted between two weeks and eight weeks.
It’s important to note that past performance is not an indicator of future performance, and no investment strategy can guarantee a profit or eliminate the risk of loss… yet we simply must project how long it would take us to become a crypto millionaire if we could trade the next big waves altcoin seasons in 2023 and beyond.
Historical Altcoin Season Data
The Crypto SmartWatch historical Altcoin Season data identifies a number of false starts in the past. We must be ready to deal with the fakeout altseasons if we are to remain prepared to catch the best performing altcoins in the next bull markets.
Yellow are ALERT zones, Green are bull waves of Altcoin Seasons in 2021 and 2022
The Crypto SmartWatch crypto rebalancer is a low time-maintenance crypto investing tool that can save you hours of time trying time the altcoin seasons and increase the performance of your crypto portfolio year after year.
By using the SmartWatch to diversify into the best-potential assets at the start of altseason, investors can focus their attention on positioning managing risk for growth and success.
Our advanced three week intensive course and crypto trade alerts may also combine an oscillator like the RSI, momentum indicator like the MACD, trend following tools like the Ichimoku Cloud and reversal indicators like the Bollinger Bands – with multiple timeframes – to fine tune and layer together our portfolio strategies.
However, it is important to remember that no single strategy or indicator can guarantee success in the uncertain crypto markets of 2023. Risk control strategies that protect your equity from the dangers of trading should be your first priority no matter which tools we might use to make informed investment decisions. Our job as traders is to position our money and to manage the risk and if we are correct, then the markets will naturally take care of the results.
Try our Crypto Portfolio Rebalancing Tool with an objective trend following strategy that anyone can actually use to diversify into Altcoin Seasons.
Four hallmarks of a good discord crypto trading signals community: (updated)
Transparency: The community should be transparent about its track record, methodology for generating signals, and the performance of its past signals.
Professionalism: The community should be run by professional traders with a proven track record of success in the market.
Responsiveness: The community should have a responsive team that is available to answer members’ questions and provide support.
Consistency: The community should provide consistent, high-quality crypto trading signals that can be relied upon to make informed trading decisions.
New Directions For our Crypto Discord Group
Our Crypto Discord Community provides support and encouragement for Crypto Bloggers.
As a community, we encourage and guide all ethical writers at any level (beginners are welcome and the most accomplished writers are encouraged to mentor others).
We create a collaborative atmosphere where we can all take the next step toward our success while supported by the enthusiasm of the group!
We are seeking to add new writers bringing different perspectives about crypto, investing and personal wealth building.
Our editorial team embraces diversity, values our writers, and helps them find their writing voice in a collaborative platform.
Personal and authentic experiences are helpful both for the writer and for the reader.
We each come to crypto for different reasons because we are each on a different stage of our financial abundance. Some are working two jobs while learning about crypto while feeding a family, while others are lifting from a strong income stream to greater wealth.
Many authors will be new students who may be beginners creating their first investment journal, while other authors will be wealthy with years of successful trading experience.
A trader can also see if the leaders are committed to providing crypto signals with a good track record, answering questions and providing guidance in a professional manner, giving access to important market insights and responsive in addressing member concerns.
Our discord, Digital Currency Traders has been one of the best crypto trading signal Discord groups since 2017 because it is well moderated and free of spammers.
Crypto Trading Signals Discord
The power of Discord for following crypto trading signals comes down to interacting with other traders who are studying the same trading system.
These interactions can be extremely beneficial to speed up your learning and shorten your journey to becoming a crypto millionaire. Here are a few key benefits of participating in the Digital Currency Traders community of crypto traders who are all working to master the same system:
Collaborative Learning: By discussing the trading system and sharing information with others, traders can learn from one another’s experiences and gain a deeper understanding of how the system works as we pass through each stage of Altcoin Seasons. This can help you prepare to manage risk, as well as to refine your own trading habits.
Mentorship: Experienced traders in the community can provide valuable guidance and mentorship to newer traders. This can include providing tips and strategies for success, as well as offering feedback on trade ideas and setups.
Support: Participating in a community of traders can provide a sense of camaraderie and support, which can be especially important during times of market volatility or when traders are facing difficult risk control moments.
Access to High-Quality Signals: A strong community can also provide access to trading signals that match the trading plan. Like training wheels on a bike, trading signals are a valuable tool for traders. Digital Currency Traders provides guidance through all 5 Stages of The Trade, covering entry and exit signals, as well as more specific details on position size and risk control.
Performance Monitoring: When studying the history of the community chat, a trader can gain insights on how the community leaders have been providing a good crypto trading signals community over a long period of time. Look for a thread with a history of their #winning-trades. Look for signs of transparency when dealing with complaints, consistency in posting the same trading approach, professionalism in keeping the community free of spam, and responsiveness to user questions. The signs that you have found one of the best crypto discord communities can be easily be tracked by scrolling back through the past interactions of the community.
Discord Crypto Trading Signals community
Click to join the Digital Currency Traders (FREE) Crypto Trading Signals Community
Overall, participating in a Discord Crypto Trading Signals community of traders who are all working to master the same system can be a valuable way to improve trading performance and develop a deeper understanding of how Altcoin Seasons come and go.
By learning from others and sharing information and insights, traders can gain a competitive edge and be better equipped to navigate the often-volatile crypto markets.
In this article, we discuss 5 good reasons to use trading bots to automate your crypto trading strategy – at the end we’ll share unexpected disadvantages you should be aware of.
have become an increasingly popular tool among cryptocurrency traders looking to automate and optimize their trading strategies.
These software programs are designed to execute trades on behalf of the trader, using algorithms and technical indicators to make decisions based on the trading signal definitions.
Why automate your crypto trading strategy?
Time-saving: The first principle of wealth building is that your money should be working for you while you do other things. One of the biggest advantages of using trading bots is that they do the unending menial task of watching prices for you. If you find yourself watching the charts or constantly checking the markets to manually execute trades, consider learning how to set up a bot to make trades on your behalf – or find some proven copy trading profiles and follow their automations.
24/7 trading: Crypto markets never sleep and using a trading bot allows you to assign your money the task of monitoring price and executing trades even when you are not available. This can be especially useful for investors who want to trade a slow long term, trend following approach.
Diversification: A series of crypto trading bots across a portfolio of digital assets makes it easy to diversify into a new crypto portfolio at the start of the next Altcoin Season – and also to manage the work of closing trades at the right time. We have set up our trading bots to follow the proven Crypto SmartWatch strategy for different portfolios of coins. By diversifying your portfolio with a small position in many coins, you can spread exposure across different assets, thus increasing the potential for a single investment with massive moves boost your overall returns.
Backtesting: Another advantage of using trading bots is the ability to backtest different strategies. Our methodical backtesting allows better confidence to identify when Altcoin Season is starting and ending, helping us fine-tune the settings and timing of the trading bot operations. Our Crypto SmartWatch historical research is now invaluable for crypto traders to optimize their trading strategies in 2023. Improve your understanding of risk control in trading crypto currency trends before you start trading with a bot.
Emotionless trading: One of the most common mistakes made by traders is allowing emotions to cloud their judgment. This can cause trading mistakes when we are winning and trading mistakes when we are losing. A well-planned trading bot can eliminate this problem as trades are executed based on pre-set rules and algorithms rather than emotions, opinion or second-guessing. A Botted strategy will remove emotions such as fear, greed and excitement, which can often lead to impulsive trading and higher risk.
Our research has shown that trading bots can provide advantages when you correctly automate your crypto trading.
Trading Bots can be especially useful for investors who wisely take a hands-off approach to trading. Experienced investors leave their money to manage the work involved in watching the markets to capture opportunity at the correct time.
However, it is important to note that like any trading strategy, using a trading bot comes with its own set of risks.
Disadvantages Of Using A Bot To Trade
While trading bot services and the best copy trading platforms offer a range of options and tools, they also come with some disadvantages to be considered. Some of the downsides of using copy trading or following trading bot include:
Lack of flexibility: Trading bots rely on pre-set rules and algorithms to make trades. This can be beneficial in some cases, but it also means that the bot is not able to adapt to changes in the market or unexpected events. (For example we know that our trend following strategy, the Crypto SmartWatch, will take repeated losses in a sideways market so we have manual review of the activity of all our our bots.)
Lack of human judgement: Trading bots can also lack human judgement, as they make trades based on pre-set rules and algorithms. We must understand all of the conditions of the market and how our bot will respond so that we might pause the bot operation in some market conditions.
Risk of hacking: Trading bots are operated through software, which means they are vulnerable to hacking attempts. This will always put your funds and investment at risk, so we recommend funding your trading exchange with only a small part of your overall cold storage assets. Always take the time to set up 2FA and strong random passwords on your exchange accounts. Keep your cold storage digital assets on a hardware wallet.
High costs: You may think that many of the best trading bots on the market come with a high cost but you can select from a range of low price and high return bots to follow on 3commas or BitGet.
Lack of transparency: Most trading bots operate in a ‘black box’ with complex sounding things going on behind the scenes, which can make it difficult for traders to know exactly what trades the bot is making and why. The Crypto SmartWatch approach is completely transparent and easy to understand. We can explain why every trade is placed!
Are Trading Bots Even LEGAL?
It’s important to also note that depending on the jurisdiction you’re trading in, there might be some legal and regulatory restrictions around the use of trading bots. It’s important to be familiar with these before using bots, to ensure compliance with regulations.
Trading Bots and Your Tax Obligations
Using a trading bot will not change your tax classification. The classification of your trades and investment activity for tax purposes will be determined by
how often you trade and
the amount of profits you earn.
Large crypto profits will affect the tax bracket you fall under and thus change your tax obligation.
It’s also important to note that, depending on the jurisdiction and the way you use it, the use of a trading bot could change the way your profits are classified by the tax authorities.
Beware Of Day Trading Bots
For example, if a day trading bot is used for scalping, it may be classified as a business activity and may be subject to different tax rates and regulations than if it were used for long-term buy-and-hold investments.
It is always recommended to consult with a tax professional in your country to understand the tax implications of your crypto trading activity and how the use of a trading bot may affect it.
Keep Trading Records The Easy Way
It is also important to keep accurate records of all your trades and report them correctly on your tax return in order to avoid any issues with the tax authorities.
It’s good practice to keep track of all your crypto transactions and keep records of buying, selling and trading of any cryptocurrency, this would help in determining the capital gain/loss on them, as well as the cost basis. Simply import your trade data from your exchange API and CoinTracking.co will calculate the rest.
Crypto trading is subject to tax regulations in most countries, so it’s essential to comply with them to avoid any legal issues.
Automate Your Crypto Trading
Overall, while trading bots can offer a range of benefits to traders, they also come with a number of disadvantages and dangers. Get to know exactly how your bot will work before deciding to automate your crypto trading with a bot.
Crypto Investors should consider their own unique needs and risk tolerance when deciding whether to use a trading bot. Additionally, it is important to always do your own research, and thoroughly test and evaluate any trading bot before using it with your own funds.
More people are searching for proven approaches for reducing risk in crypto investments.
By following two simple risk control rules, it is possible to improve your returns and to effectively manage risk in your cryptocurrency investments – and at the same time resist the silky lure of price prediction.
How to reduce risk in crypto investments.
Managing losses in crypto trading
One of the most important risk control rule is to reduce or close your position unless it proves you correct. This means that if an investment is not performing as expected, it is important to reassess the situation and consider whether it is worth continuing to hold the position. If the investment is not meeting your expectations, it may be necessary to cut your losses and exit the trade.
This rule is important because it allows you to minimize potential losses by getting out of a trade that is not working in your favor. By holding on to a losing position, you are essentially doubling down on your initial error and increasing the risk of further losses. By reducing or closing your position, you are able to limit the potential for loss and to preserve your capital for future trades.
Another reason why this rule is so important is that it helps to prevent you from becoming emotionally attached to a losing trade. It can be easy to become emotionally invested in an investment, especially if you have a strong belief that it will eventually turn around. However, this can be a dangerous mindset to have, as it can lead you to hold onto a losing position for longer than you should. By following the rule of reducing or closing your position unless it proves you correct, you are able to maintain a level-headed and objective approach to your investments.
Increasing profits in crypto trading
The second risk control rule is to press your winners correctly without exception. This means that if an investment is performing well and meeting your expectations, it is important to take advantage of this success and to maximize your profits. This can be done by “pressing your winners,” or increasing your position in the investment.
This rule allows reminds you to take advantage of market opportunities and to push your correct position. By adding onto a winning position, you are able to capture a larger share of the potential profits. This can be particularly important if you are trading in a long trending market, as it allows you to capitalize and to potentially generate significant returns.
This rule is so important because it can prevent you from second guessing yourself and being too conservative in a position that has been proven correct. It can be tempting to take profits early and to lock in your gains, but this can also prevent you from maximizing your returns. By pressing your winners, you are able to stay engaged in the market and to potentially capture even larger profits.
Manage Risk, Don’t Predict Price
Managing risk is considered to be the primary job of a trader. This is because, while predicting price movement can be an important part of the trading process, it is ultimately not within a trader’s control. Crypto markets are especially unpredictable and require proven and tested strategies for following the trend while diversifying at the beginning of altcoin season. There are simply too many factors that can influence price movements, including economic events, new regulation changes, political developments, business failures, high level frauds, and even social and psychological factors… to name a few…
As a result, it is simply not realistic to accurately predict price movements on a consistent basis.
The primary job of a trader is managing the two sides of risk
mitigating the potential for loss.
maximizing the potential for gains.
A crypto traders primary job involves identifying and analyzing potential risks, developing strategies to mitigate exposure to those risks, and implementing those strategies effectively. Their secondary job is to increase exposure to risk when the trade is going in our favor.
By following a risk management approach that feels good and is easy to manage, traders are prepared in advance to preserve capital and maximize the potential for large and significant profits.
Why Do We Focus On Price Prediction?
Talking about price prediction is more seductive than talking about reducing risk in crypto investments for traders. It allows us to feel a sense of control in an unpredictable setting and we gain prestige and recognition from others when we are correct. However, it is important to recognize that price prediction is an unreliable activity and ultimately – it is not the primary focus of any pro trader.
Relying on our own price prediction it too heavily can lead to poor decision-making. If a trader becomes overly focused on trying to ‘be right’ on the direction and size of price movements, they may make trades based on their predictions rather than on sound risk management principles. This can leave a trader open to much bigger losses.
Top Crypto YouTubers and social media influencers may focus on price prediction because of a desire to gain approval from others and to earn income from views. This desire for approval can be particularly strong when it comes to activities that are perceived as challenging or prestigious, such as trading.
Price prediction leads new traders away from the job they are supposed to be doing…
For many traders, the pursuit of profits and success in the markets can be closely tied to their ego and their desire for social recognition. They may feel a sense of pride and accomplishment when they are able to predict price action and seek validation and approval from their peers and colleagues.
This desire for social recognition is a powerful motivator, but it can also lead to negative consequences in trading. For example, a trader who is overly focused on seeking approval and recognition may make risky trades in an attempt to impress others, even if those trades are not in line with their overall investment goals and risk tolerance.
Surrendering to the unknown can be emotionally challenging because it requires letting go of our ego’s desire to be in control and to have a sense of predictability. It can be difficult to accept that we cannot always know or control what will happen, and this can lead to feelings of anxiety and uncertainty.
However, surrendering to the unknown allows us to release our attachment to certain outcomes and to expect reversals against all of our best analysis.
When we focus on managing risk right now and not on potential results that ‘should’ happen, we naturally find a greater sense of freedom and peace in managing out trade positions.
In the context of trading, surrendering to the unknown is simply part of the job.
The markets are inherently unpredictable and volatile.
However, with a good trading plan we can learn how to let go of our need to control every outcome and to predict every price movement, we can free ourselves from unnecessary stress and anxiety and focus instead we assign that difficult work for our money to do on our behalf while we do other things.
Our only job is effective risk management. Our two risk control rules – reducing or closing your position unless it proves you correct and pressing your winners correctly without exception – are the keys that will keep you focused on reducing risk in crypto investments in order to tip the odds in the unfavorable game of trading… to your favor.
