Insights from a BTC trader who made 10x profit in 7 days.

Leo

23-03-31 15:39

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Original author: Ice

Original translation: Leo, BlockBeats

Recently, a BTC trader gained 220,000 USD with a cost of 20,000 USD in a 7-day BTC trading period and shared his trading strategy insights, which is helpful for Crypto traders. BlockBeats has compiled and translated the information as follows:

Firstly, a declaration:

This article does not constitute financial advice;

Trade within your means and never risk more than you can afford to lose;

Trading is difficult. Don't rashly imitate my trading strategy just because you think you are skilled and have found that it is effective.

Going back to the beginning, at that time I reset multiple trading accounts and didn't want to touch contracts anymore. I mainly wanted to be a "fundamental-driven" on-chain investor because that was the way for me to get the highest returns. But why did I need to open another trading account?

Most of my investment portfolios are long-term investments, and I won't stop investing until my views are validated or invalidated. At the same time, from a trading perspective, I don't want to sit and wait for death. A trade is either profitable or losing, and it can't be stable. I know I'm not good at trading - that's why I want to learn. Initially, I chose a quantity that would be painful to lose in order to learn. But I can invest actively without any worries. At first, I used a scientific method to formulate hypotheses, analyze variables, test, analyze results, and evaluate.

There is no emotional influence in these trading processes, as I treat them as a serious lesson and try to understand how the market performs, creating a psychological model of how variables interact with each other.

Unlike before, this time it's not:

-If I can't win this deal, I'm done.

-I just want to make money quickly;

-Maybe this time I can finally make some money.

Another way of saying this is:

-I hope to lose this transaction so that I can confirm whether or not I am making a mistake.

-If I win, it means my ideas are correct. How should I continue trading?

-I am not afraid of losing this transaction, I am just confirming my hypothesis. If it is wrong, I can improve my personal trading system.

Once the account changes reach the scale that breaks through this "emotionless meditative state," I will stop trading. In actual trading, I deal with momentum, emotions, and levels. If you are good at independent thinking and autonomous trading, this is definitely crazy. After this, I feel that all quantitative data is useless.

This strategy is evolving every day and is almost impossible to backtest. It is completely different from the way I am used to, and trades are made based on "market volatility, moving averages, and intuition".

Actually, there are some KOLs in the market who share data charts of EMA and Hull MA technical indicators. They use momentum undercurrents + quick little pinescript to display momentum triggers and also indicate ranges and obvious levels, as shown in the following figure:

To be honest, the indicators are arbitrary. Is it really important to use 12 EMA (exponential moving average) or 11 EMA? The only useful thing is that they trigger deeper questions:

- Why do prices follow a certain MA/line/level?

- Why Momentum/Range Strategies Work

- When/why do technical indicators start/stop working?

Additionally, it is necessary to have a certain understanding of macro events (crypto seems to be under its control) and develop plans for each possible scenario, which is very helpful. It is important to know when certain events occur that are irrelevant to the market and when situations involve transactions that go against consensus.

A large part of my profits come from the long-term fud of the market towards Circle, such as the understanding of concepts such as asset-liability ratios and term risks, and the attention to macro news - hoping that the Fed will announce $2 trillion in support.

These news/FUD peaks/trades that create or break a certain level, if the market does not immediately react, you must reduce your position, these data will greatly increase leverage. I learned to look for these moments and place bets.

Another important lesson is that it is difficult to make money trading Altcoins. They are only the BETA version of BTC, and unless you have "MMs hunting stops" or overreactive trading behavior, you will lose 20% when BTC falls 2%, and only earn 10% when BTC rises 2%. In fact, trading BTC with slightly higher leverage is much easier.

Based on following the trend of trading, I feel comfortable with only buying or only selling. In an uptrend, I do not short the pullback - I only buy. In theory, I can make more money this way, but shorting the pullback in an uptrend is technically reasonable and psychologically difficult to accept.

A very important lesson - the importance of waiting for the right opportunity. Sometimes, the K-line may form below the high point, but the price will oscillate above the high point, indicating a bullish trend, before eventually returning below. By managing your schedule and waiting only for K-line changes, you can save a lot of money.

If my momentum indicator is declining, even if it hasn't failed, I have learned to TP before achieving my goal. Interestingly, people are easily no longer believing in what initially made you profitable, and that "PA feels tired" feeling is often reliable.

In addition, even a $100 transaction can help you closely monitor the market, get up close and personal with the market, and provide information for LT investments (such as entries/outlook) decisions. At the very least, as an investor, you can see that your understanding of the market is interesting.

It is worth mentioning that I still believe that betting on DeFi in the medium to long term is more desirable than normal crypto trading and will yield most of the returns. However, I cannot continue to increase my account with such high risk and reckless attitude, nor will I try to do so, just learning.

Of course, this situation will definitely make me think "Am I getting better at trading, or did I just happen to go long during this year's surge?" Honestly, I really don't know, but I have learned some things that I think are pretty cool during this process and will continue to learn in the future.

Finally, it is not recommended to imitate. In any case, strictly control risks and trading account funds, and only use assets that I am willing to lose to place bets.