Thursday, August 6

Trading

Trading as a business

A General Strategy on How to Select a Crypto Fund, Part 1
Crypto News, Trading

A General Strategy on How to Select a Crypto Fund, Part 1

Digital assets, as a new asset class, exhibit interesting characteristics that could benefit a diversified portfolio of traditional assets. There are, however, many ways to get exposed to digital assets — passive investment, actively managed, short or long term investing, etc. — and with over 800 funds of all sizes, ranging from passive index to active trading funds to venture capital funds and fund of funds, it can be hard to sort the wheat from the chaff. Just like hedge funds, crypto funds come in all shapes and sizes, and investors tend to look at them through their usual hedge-fund analysis prism. However, as crypto funds deal with a new asset class that has unique characteristics — digital assets — investors can be led to misleading conclusions when traditional asset metrics are use...
Exchange Activity Explodes Following Bitcoin’s $10K Breakout
Crypto News, Trading

Exchange Activity Explodes Following Bitcoin’s $10K Breakout

Bitcoin’s (BTC) recent breakout was accompanied by a massive spike in on-chain exchange volume activity, according to data from Glassnode. On-Chain exchange activity. Source: Glassnode. Unlike regular trading volume that is often artificially inflated by the exchanges, on-chain activity may be more indicative of the true patterns. Interestingly, the only metric that experienced a downward trend is the number of exchange deposits. This may be a bullish sign in its own right. Weekly percentage change in volume. Source: Kaiko. 700% growth in DAI/USDT The data for the previous week indicates a major spike in off-chain trading volume as well. For instance, the BTC/USD pair saw a 70% increase in its biggest bounce since April; DAI/USDT spiked by over 700% in the same time period. Bloom...
The Art of  Strategy Design – In Theory
Trading

The Art of Strategy Design – In Theory

I have refined a standard procedure that I use to work my way through the process of creating a strategy. We will start with the big picture and make increasingly more detailed decisions about the strategy. We will begin with the major assessment of what type market action we want to trade and what kind of trader we want to be. We will end up with making decisions on exits, and how far away to put our money management stops Pick the Market Type Again, the first decision you must face is what type of market action you want to trade. Although on the surface this may look like an easy decision, in fact, it is a difficult judgment. The reason it is difficult is because most new traders only consider one aspect, profits. They simply try to pick the strategy that makes the most money. Unf...
Profile  of a Winning Strategy – The secret to successful trading strategy development
Strategy, Trading

Profile of a Winning Strategy – The secret to successful trading strategy development

At this point in the development of your strategy, you have a clearly defined direction in which you are heading. You've decided on the strategy type and market type you are going to trade, and you have a feel for the types of patterns on which you want to capitalize. Many traders at one time or another have become frustrated with strategy development. Not because they don’t like it, but because they run out of new ideas to test, or haven’t found anything that works for them. For example, most traders have tested the Dual Moving Average Crossover Strategy sometime in their trading career. The average trader will look at this strategy and believe that the only thing to test is the length of the two averages. New traders will experiment with many different lengths for the averages. W...
Markets,  Strategies & Time Frames
Strategy, Trading

Markets, Strategies & Time Frames

The first step in developing a trading strategy is to select the market action and corresponding strategy type that you want to trade. As I’ve discussed, selecting a strategy type is a very important part of strategy trading and you should take your time in evaluating the alternatives. Many factors will influence your decision, but your own personality will ultimately direct you to the strategy that is right for you. In making the choice, the most important thing to remember is that it is yours to make alone. Read everything I have to share with you about different types of strategies, but then decide for yourself. Only you really know what type of person you are and therefore what type of trading is best for you. This chapter will help you to understand some of the conditions that ca...
The Path  to Successful Trading
Strategy, Trading

The Path to Successful Trading

In the broad category of “trading the markets,” there are basically three types of trading: discretionary, technical, and strategy-based. When I sat down to write this book, my intent was to write only about strategy trading. But then I realized that to fully describe strategy trading, it was also necessary to discuss discretionary and technical trading. It’s important that you understand the difference between them, which is not always clear. I’ve met many people who believe they are strategy traders when they’re actually technical traders, and vice versa. I have known and taught many traders, and have observed that there are four distinct stages of trader education: discretionary trader, technical trader, strategy trader, and complete strategy trader. All successful traders have gon...
The Principles  of Successful Trading
Trading

The Principles of Successful Trading

Over many years of trading, I’ve found certain principles to be true. Understanding and using basic principles provides an anchor of sanity when trading in a crazy world. Whenever I find myself under stress, questioning my judgment or my ability to trade successfully, I pull out these basic trading principles and review them Don’t Try to Predict the Future I used to think that there were experts and geniuses out there who knew what was going to happen in the markets. I thought that these traders and market gurus were successful because they had figured out how to predict the markets. Of course, the obvious question is that if they were such good traders, and if they knew where the market was going, why were they teaching trading techniques, selling strategies and indicators, and...