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Crypto Blog

Why is Bitcoin changing the way we think?

Bitcoin, the majestic internet bean, has caused quite an uproar in the past two years. Who has not heard of the mighty 300% increase in value from March 2020 to December 2020? Bitcoin resonated not only in the public mind, but investors and venture capitalists have also all turned their heads toward the insane revenues taken out of Bitcoin investments. Now even the governments around the world know that Bitcoin is here to stay. So, what is changing? Let me explore further. 

This article will be quite economical. If you like what you read, please let me know so I post more of my thoughts on this. Stick around till the end. I finish this article off with a short story that presents a world using Bitcoin with no alternative. 

High time preference is a side effect of consumerism driven by inflation. 

High time preferences mean that an individual focuses on his well-being in the present. A person having a high-time preference is rather happy to have their product now than in 30 years. But I understand them, it does not work like this anymore, saving has changed. Since our economies have only seen inflation since the invention of fiat currencies, the average consumer knows and feels the rate of inflation decreasing their purchasing power in the future. The average individual has no other alternative than to store their value in inflation-related assets or exchange it against a store of value subject to volatility related to the fiat market.

Moreover, thanks to inflation, the price of products is rising in the long-term, leaving the purchasing power of most of the population exposed to inflationary shifts. As a result, less money is being saved by the average family, more money must be spent on the same amount of goods without getting a significant increase in their wages. Our economies are clearly built on the idea of consumerism and high-time preference. 

Low time preference is the result of appreciation in the price of the chosen store of value. 

Saving is the best way to explain the features of a low time preference, meaning an individual lies emphasis on his future well-being. Since you expect an appreciation of your value in the long-term, you are more reluctant to consume. This is against all the economic principles we have right now. Consumption is the driving factor of our economy, but more and more people realize that their long-term situation will be worse than the more they spend now. The inflationary monetary system incentivizes consumption through inflation. Sounds like a bad deal now, doesn’t it? 

You are right. It is a bad deal in my eyes too. Now let us see how Bitcoin comes into play here and why it has a massive impact on the way we think. 

Bitcoin is changing our time-preference

Thanks to Bitcoin, you and I understand that we had no choice. There was only one option for many years, but this is changing. Bitcoin offers an alternative. It provides you more than just an alternative. Besides its other qualities, it gives you a sound store of value too. The more people keep holding their Bitcoin, the higher the price of Bitcoin will go in the long term. It is intuitive and easy to grasp. All you need to do is hold on to it, and it will eventually fire you to the moon. This is due to the scarce nature of Bitcoin. Since there are only 21 Million Bitcoin out there and there cannot be made more, the price of Bitcoin is directly subjected to the demand for it. So, if demand never leaves because people know that all they must do is wait to get more value in the long-term, Bitcoin will be bound to increase in the future. More and more people understand that economics should work this way, not how the governments think it works. Bitcoin changes the consumer. 

Bitcoin not only implements the need to save, but it also shows the consumer that their way of living has alternatives to choose from. Bitcoin is the best alternative because it offers an appreciating store of value while being a fully functioning monetary system. This offers opportunities. People start to see how real money should work, and by comparing it to what they have been using before, many begin to understand. 

Before we end this, I would like to show you an insight into a short story I am writing: 

In a world of Bitcoin

As the door opens, the room full of venture capitalists goes quiet. A small but steady man walks into the room, everyone greets him simultaneously. “Hi, Boss.” The short men sit into the small leather chair at the end of the table. The man to his left (wearing the same suit as the men to his right, just the tie is different) gets up and addresses first the boss and then starts speaking clearly into the room. 

Men to his left (Red tie) starts speaking: the situation is concerning. After the last appreciation of the market capitalization, we have seen a backslash as two years ago. We are expecting a depreciation of more than 60% in the coming week.

(Hysterical discussions erupt in the background)

Boss: (slams his fists onto the large wooden table) No one could have foreseen something like this. We thought we could correct the cycle of market corrections and break free of the chains of losing money. 

 Men to his right (blue tie): We need to save our money! What are we going to do?

 Red tie: There is no alternative! 

(Hysterical discussions erupt in the background)

If you like to know more about this story, please leave a like or a comment with a short mention that you liked it. Thanks.

To conclude, thanks to Bitcoin’s nature of scarcity and expected appreciation in value, many start to understand how a currency really should work and what a real store of value should be. This increase in interest is directly reflected in the price of Bitcoin. But why is Bitcoin bull-running now during a pandemic? Can I make a living by trading cryptocurrencies? 

 If you ask yourself questions like this, please check out my website. I have plenty of articles and podcasts that provide you with answers to these questions. I am doing a newsletter, too; the first 100 subscribers are free life-long. 

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Crypto Blog

How to start trading cryptocurrencies

Check out my latest podcast about how to start trading cryptocurrencies.

This episode will cover what you need to get started.

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Crypto Blog

What makes Bitcoin special?

Some of you surely know the sweet feeling of opening the charts in the morning and looking at the green numbers the markets are doing.

Usually, I get up, make myself a strong coffee, and while doing so, I fire up my PC. The charts’ first view still feels dreamy, and as I recheck my exchange to have a second view, my coffee starts to kick in. Bitcoin is bull-running. But why? Why now? In the middle of a pandemic? The answer to those questions is not easy, and to understand this better, let me break it down for you.

Bitcoin has no materialistic value; its value is of a subjective nature. As soon as Bitcoin rises in price, the public’s attention toward Bitcoin grows, which in fact, increases price again. Bitcoins price is solely determined by the demand for Bitcoin due to its limited supply and its non-materialistic nature. But why is that? Why is Bitcoin bull-running now?

This has to do with economic changes happening due to the pandemic. Investors and the public both realize that Bitcoin is a valuable store of value and that Bitcoin might save their money from inflation happening with the fiat currencies. Bitcoin not only an alternative, but it is the only alternative that is out there right now to do transactions or send money around the world. The other is the central banking system of the fiat governments. People realize more and more that their financial freedom is no longer dependent on using fiat. They can now send money around the world without having to pay ridiculous amounts of transaction fees to send their money through an inefficient banking system that has not innovated much in the last 20 years. The real question is, when will the government realize that?

They already did. And that’s why Bitcoin is so unique. The real value lies within the fact that Bitcoin is too important now to not get involved. Governments cannot miss out on crypto because they would miss out massively, not only technology-wise but also because their banking system virtually has no future in the current crypto market setup. They start to understand that. Which is fantastic news for Bitcoin and everything related to blockchain technology. The European government was one of the first in the west to come out with plans to create a Euro based on the cryptocurrency concept. China is already shifting its currency from fiat to crypto. Governments worldwide realize that the crypto train has not departed yet, and there is still time to jump onto it.

Bitcoin is not just superior because governments cannot do much about it except accept it. It is also notable because it gives you financial freedom. Investments into Bitcoin means that you invest money where only you have total control. This makes Bitcoin more valuable to you than to the government. The government will try to introduce their own currencies, which are hopefully linked to Bitcoin. Giving as a new “Gold Standard.” But that is unlikely to happen. They are probably introducing inflationary monetary systems connected to the blockchain to get their fair share of the market. However, that will not change the fact that Bitcoin will still be here after all and can not change it. Even though the government might want you to use their currency, but you know better now. Having money in Bitcoin feels so much better than having cash in the fiat currency system.

After reading this, many of you might be thinking, “another crypto geek that can not shut up about Bitcoin,” but I understand that Bitcoin will not change how governments work in this world. Bitcoin needs regulations. Everything needs regulations. The government should get involved in the regulatory aspects of Bitcoin and other cryptocurrencies instead of inventing a Keynesian cryptocurrency. That would be time well spend since Bitcoin is here to stay.

To conclude, the revolution of Bitcoin will motivate anyone to rethink their financial situation. Not even governments will be spared from this momentum. I dearly want you and your family to be part of this to understand what cryptocurrencies they are about and how they might affect you and your financial life. So, if you want to learn more about cryptocurrencies such as Bitcoin, make sure to check out my website. If you have loads of good stuff on there, I even have a daily podcast to scan the markets for you. Be sure to check it out!

I am also doing a newsletter. The first 100 people to sign up will be enjoying my newsletter for FREE life-long!

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Crypto Blog

How to start trading or investing?

It does not matter if you want to trade cryptocurrencies, stocks or if you just want to invest. There are 3 things that everyone needs to have or know before they can even start trading or investing. 

Trading and investing are ways to exchange your assets against tangible value. This value is often derived from either a service or a good (e.g., commodities). You either can enter the trade by expecting the value to increase (go long) or decrease (go short), depending on your strategy. To be able to trade your assets, you must use an exchange. Imagine yourself needing an apple. To obtain your apple, you must go to a supermarket or to a local apple-tree to get it. It works the same way with stocks and currencies. Trading can only happen over an exchange. Learn the language of the exchange and make the best deals by mastering it. However, be sure to bring some money, otherwise you will not be able to engage.

So, let me point out 3 things you need, to get started with buying and selling stocks or currencies. Make sure to read every point since I will give some tips on the way. 

  1. Choose your exchange – Choosing your exchange is of paramount importance, especially when you are starting out. The first exchange can make or break your experience in trading or investing for you. Make sure you use an exchange with a beginner-friendly interface. In the beginning, it is vital to get used to the tools of a regular exchange, such as the limited order, the stop-loss, and the stop-limit function. The faster and better an exchange shows you what these tools are and how to use them on the chosen platform, the better your trading experience will be. So, be sure to choose your exchange wisely. As soon as you think you mastered your exchange, do not stop there. Try out more platforms and use more than one exchange in the long run. Being friends with many exchanges helps you to avoid downtimes or outages of specific exchanges. 
  2. Start capital – Every trade needs money. Remember, we exchange goods or services in the form of value for money. So, be prepared to spend some money. However, never invest more than you can afford to lose, especially when you are starting out. You will lose money, and the chances of you losing money, in the beginning, is far greater than when you have experience. So, reduce your order size, meaning, invest less money while trading. Start out with 5% of what you initially planned on trading. Just to get the hang on how the tools work. As soon as you feel confident and you think you can trade more value, do so. Use an approach, do not just throw your money into the markets. Use a strategy.
  3. Strategy – Having a strategy will help you to stay in the markets for much longer. Just throwing around money has nothing to do with trading. You need an edge, something that gives you a reference between all these charts and ideas. Use the strategy to focus your attention. It will bring you consistency into your trading, making it easier for you to find the right perspective. Ensure that the strategy you chose matches your personal understanding of the markets. This is highly important since tons of mentors sell you the holy grail of trading that does not exist. Do not fall for these traps. Finding out how you understand the markets is essential. As soon as you have the basic understanding, find someone that matches your understanding, and then focus on that. Do not get distracted by all the gurus. Concentrate your focus like a death-ray and make your strategy work. 

I want to give you guys a bonus:

Always use a stop-loss – It does not matter whether you trade low-volatility markets or high-volatility markets. Having a stop-loss in place will surely save you a lot of money. A stop-loss is triggered when the price hits a specific value. The stop-loss sets a limited sell order at the chosen value and sells off for you by doing everything automatically. Having a stop-loss is like having a protective dog. It will bark when someone or something wants to hurt you, the same with the stop-loss. So be sure to use one.

To wrap things up, the beginning is not hard. However, staying in the markets for a long time is hard while trading. Be sure to have a strategy in place that protects you and your funds from significant losses, use an exchange that you trust, and have experience with while seriously trading. If you combine these 3 steps, you will become successful in the long run. Ensure that you stay consistent about your approach and do not let yourself be talked into something that does not exist (e.g., the holy grail of trading). 

If you need any help trading, ensure subscribing to my email list since I am creating a beginner’s course. Until then, be sure to check out my blog for more useful information to get started. 

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Crypto Blog

5 things every trader needs to know

Trading is a buzz, especially when trying to figure out strategies. It is tough to stay concentrated with all those traders sharing their own strategies that apparently work wonders. Not being distracted by all the buzz is the key to becoming a profitable trader. Many newcomers think that the more they know, the better. It does not work that way. People sharing their strategies is a good thing, and I do not want to criticize that. Every trader needs some form of plan to get started. Many think it is about that “one” strategy that will make them buckets of money, and I am trying to point out why this way of thinking is not very productive. Even though the truth is quite near to that. There is no such thing as the “one “strategy because the strategy you decide to use is understood on a personal level. This means, the more familiar you are with the strategy you think suits you best is the one thing you should double down on. 

Make sure to stick around till point 4 or 5. I will give you some great extra tips from my personal arsenal. At the end of this article, I provide my own routine that you guys can use or even copy. Without further hesitations, let’s get started! Here comes the first one:

  1. Do not use more Indicators than necessary – As we discussed before, there is no such thing as the “holy” grail of trading. If you want to become good at trading. The fewer indicators you use to judge your execution of trades, the better typically. Indicators usually just add to the buzz you should be avoiding while trading, so the fewer you use, the better your executions usually become. You need to change your mind here. Indicators should not help you enter a trade. They only should keep you out of a trade. This is one of the best ways to avoid being influenced by the indicators. Indicators should not be a critical point of your strategy but a healthy fundament to build your strategy right on top. 
  2. Use a strategy – Do not just use any. Using the wrong strategy can really lose you money. Find a strategy that makes sense to you. Do not let yourself be talked in by trading mentors that guarantee you X amount of money with their strategy. The holy grail of trading doesn’t exist. This is the best way to improve, finding the strategy that works for you. Research every single strategy out there until you are confident that you want to use the chosen, focus on the selected strategy, and try to blind everything out that has nothing to do with your approach. Trading is about finding your focus and keeping that focus consistent like a death-ray.
  3. Use as many perspectives as you can before entering a trade – It does not matter whether you want to day or swing trade. The more perspectives and views you got on a particular trade set-up, the better your judgment usually gets. An often seen mistake is that traders look at a timeframe that would make them enter a trade, and as soon as they move up higher in the timeframe, they redecide. Different timeframes can give you constructive insight while trading.  

Now many of you probably knew about the first 3 points. So as promised to let me give you some tips that improved my trading in no time. 

4. Plan your trade and trade your plan – By planning your trade, you really learn to understand what it means to trade. You must think about every move you are going to make before even taking it. This helped me immensely because I stopped taking emotional trades, and it gave me the new thinking of “Did I really think about this?” before hitting the buy button. Making unelaborated decisions while trading is one of the main reasons why many newcomers drop out very fast. So keep your head cool and trick your consciousness into a new state of thinking about trading. 

5. Document every trade – This is my favorite tip I can give you guys because it is easy to do. All you need to do is taking screenshots after you made a trade. Make sure to save the screenshot because we are coming back to look at it again at the end of the week. Reviewing your trades is a great way to learn and really is one of the best ways to preserve the experiences you collected while trading. All it takes is time and consistency. If you find the time to judge your successes and your failures, you will understand what it means to take a good trade. 

Trading is by no means easy. But learning how to trade wrongly will not help you in the future. Ensure that when you choose a strategy, ensure that the strategy really suits your understanding of the markets. Do not be distracted by all these traders trying to teach you the new way of making your living. Find something that works for you and focus that death-ray on it. Make sure to have a strategy and a plan for every trade you are going to take. I would do it like this: 

  1. Plan my trade
    – Where is my entry?
    – Where is my stop-loss? 
    – What is my target? (1:1, 2:2)
  2. Trade 
    – Check the timeframe 
    – Check the indicators 
    – Entry as planned 
    – Get stopped out
  3. After the trade
    – Take a screenshot of your entry and your stop 
    – Save it and look at it at the end of the week again

By using this routine, you will bring consistency and simplicity into your trading. This model does not include a strategy, so you guys can use whatever strategy you feel most comfortable with. Use this routine every single time you execute your trades, and you will learn fast. 

If you need help scanning the markets, you might be finding my daily podcast very helpful, or my blog where I post my thoughts on the charts and the markets. Make sure to check out my website for additional tips and tricks. 

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Crypto Blog

Five things I wish I knew before starting trading cryptocurrencies

This blog post is by no means my death note. I am still trading. Cryptocurrencies are very volatile, meaning that their value fluctuates at dramatic rates. These fluctuations can cause you to get kicked out of your trade very quickly and are a good reason why you must endure significant losses. Moreover, seeing your numbers going red in the beginning is a further reason for frustration. Head up, because this happens to every one of us. In fact, a trader knows the risks and tolerates that they are hard to avoid. But to be successful in these complex markets, having a wide range of experience is fundamental. Many newbies get kicked out of the market because they underestimate their risk, and they set their time preferences to high. Getting rich quick is very hard while trading and usually only happened when there was significant trade value from the beginning. Keep your head cool. Try to minimize the probability of substantial losses. By doing so, the chances are that you stay in the market for much longer. Staying in the market for longer also means that your likelihood of return increases. 

What I want is that you can stay in the market as long as you can. So, let me give you five tips that keep you in the market for as long as possible. Be sure to stick around till we get to point 5. I got a bit of extra advice ready for you that you don’t hear that often out there. 

  1. Consistency –  This hits the nail on the head and is one of the most critical trading factors. If you are starting, ask yourself: Do I know how markets move? If the answer to this question is no, go and learn it by scanning the charts with a consistent approach. If the answer to this question is yes, the same answer applies, keep on doing what you have been doing. The best thing to do is to create a routine around it. Wake up at 6 am, check the charts, listen to Yves daily podcast, see if anything interesting pops up. If there is not anything worth trading, come back in the afternoon. If there is something worth trading, take the trade but do not forget to come back in the afternoon too! Remember, we are committing to trading to obtain consistency. Seeing charts on a daily basis is the best way to get exposure to as many moves as possible. As soon as you feel comfortable observing the movements, get some experience trading. 
  2. Be willing to lose money – Making mistakes while trading means it involves you losing money. Losing money is a good thing if you get a return that gives you value back. Imagine you standing in front of a vending machine, hungry and willing to sacrifice 2$ in exchange for a delicious chocolate bar. To your despise, you find out that the vending machine takes your money but doesn’t give back that delicious chocolate bar in return. Now imagine, if you lose money while trading without learning a thing from it, you could be throwing your cash just as well into the vending machine described above. Making mistakes and losing money while doing so is fine. It should sting, which will increase your learning curve dramatically. Many fear the loss of money while trading, but you have to understand, with experience comes knowledge, and knowledge is the best weapon against fear. But to obtain knowledge that is practical, experience matters. Experience is worth the money because it will make money back and bring in more if you give yourself the time to grow on your mistakes and bad decisions. 

  3. Trading is nothing you can do while sitting at a party and have a drink with friends – Take your time trading. Dedicate at least an hour a day to trading if you are just starting. But do not be naïve; if you believe that your judgment is spot-on while you are not focusing on your chart, you are massively wrong. The market will be ruthless, and the market will take your money. I lost quite a sum of money because I installed an exchange app on my smartphone. The next thing you see is me taking trades left and right, trading my portfolio into the negative. The day I deleted the app, my portfolio went back into the green. Not because I was not executing trades on my phone anymore, but because I actually had to sit down in front of a screen and commit myself to the charts. Once I got the hang of it, trading started to make sense. You need time, focus, and you need the right mindset to trade. If you cannot align those three criteria, you better not be bothered looking at the charts. 

  4. Trade enough value – The only barrier to entry, practically speaking. In order to trade lucratively, you need quite some money. From experience, starting at 1000$, you are beginning to see some returns high enough to incentivize you to stay; making 1% with a 1000$ means, you make 10$ in profits. If you trade lower than that, you might feel that you aren’t moving into a profitable area with your asset. That is because you genuinely are not moving anywhere. There are maker and taker fees that destroy your return immediately. Trading with lower assets than 1000$ means that you have a lower risk of losing substantial amounts of money, though it is a great way to get started trading. By reducing your order size (the amount of money you invest), you effectively reduce your risk. 

 Be sure to have that notebook ready because the last tip influenced my trading immensely:

  • Stop looking for trades to take; start looking for trades not to take – The common mistake I have been making by myself and seen done by people I am trying to teach trading is that they think that they must find the perfect trade to take. However, this is the crypto market, so remember, volatility can bite you in the ass if you do not keep an eye open. Even the perfect setup can be a negative trade. Change your mentality; try to start focusing on not taking a trade. As soon as you start focusing on the fact that preserving money is far more challenging than spending it, you see everything in a different light. By virtually eliminating every possible trade option because of a fixed base of rules is the perfect way to combine everything taught until now. By having those rules and only trading after these rules, you become consistent. If something is out of line, you stay out of the trade. If there is a big candle before your entry, it does not fit into your set of rules, walk away. 

Trading is about reducing risk by failing and succeeding again, and again, and again. There is a good reason why consistency is at the top of this list. The clue to success lies in how you bend the probabilities of success and failure. It would help if you experienced winning and losing money, be sure to learn as much as you can from every piece of information you can lay your hands on and take your time and space to commit. The faster you build your routine around trading, the quicker you become good at it. The better you become at analyzing, assessing, and executing trades in the cryptocurrency market, the easier it will be to trade the market. 

Every trader experiences a dead end at some point; getting a mentor will help you for sure. Be careful with doing courses out there and only learn from someone you could eat dinner with. Otherwise, they might not be able to connect with you and teach you how to trade. If you need consultation, don’t hesitate to contact me. 

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Crypto Blog

3 reasons why Bitcoin is bull-running

Let us get the terminology straight first, what is a bull run? 

A bull-run is an increase in the value of a cryptocurrency over a long period of time. And since the price is rising, direct demand is increasing too. The longer a bull run is, the more people enter the market and join the rally. Good examples of bull-runs are the Bitcoin bull-run in 2018 and 2020 (writing this during the bull-run).

So, is a bull-run a self-fulfilling prophecy?

No, even though this could be considered as a logical assumption, but it is nonetheless incorrect. Since many people enter bull-run thinking exactly that, most of them will be surprised when the price comes down again and sell-off. Let me evaluate this further by listing you 3 reasons why Bitcoin is bull running now at the end of 2020. Make sure to stick around for a reason number 3 since it is the one we all can relate to the best probably. 

  1. Retail Investors are entering the markets – Huge international corporations are turning their heads towards cryptocurrencies. Bitcoin and some of the Alt’s have outperformed every other market on the planet in 2020 and soared to new all-time highs. The financial world finally starts to understand that Bitcoin is here to stay, if they want it or not. Companies like Microsoft and Visa are the top companies on the list. Retail Investors start to understand that diversifying into cryptocurrencies might dabble in some nice and good profits to top of a strong year in all regards. Moreover, financial institutions like Square Inc. or Visa have added some Bitcoin to their portfolio in 2020. The news that Square Inc. would invest in Bitcoin was widely recognized as the reason why retail investors started to turn up with some money. 
  2. Limited supply – Since there are only 21 million Bitcoin out there and demand for Bitcoin is picking up, the value of Bitcoin is increasing too. This effectively means that the more money there is in the Bitcoin market, the likelier the price is to rise. This makes it the perfect store of value. And since the US government has been inflating the Dollar at rates never seen before in the history of fiat currencies, many investors realize that Bitcoin is, economically speaking, the only real store of value next to Gold right now. This year alone, did the US print 50% of all the existing Dollar supply. I understand that this money is needed desperately, but, in my opinion, the US requires discipline and not more inflation to solve its problems. 

In the year 2020, many unfortunate events brought it down to this. The world now uses inflation as a tool to “fix” all the problems that we have. This is the reason why 2020 was the year for me where I started to understand what Bitcoin really means to the individual. It is crazy to think that the only alternative monetary system to the one we use to run our world is a magical internet bean with subjective value. But it is the reality, and to have the ability to use Bitcoin as an alternative system makes me more than happy. Luckily, we all live in a time where having Bitcoin is made possible. 

This brings me to point 3, so without further holdback: 
3. You and I are entering the markets – Since the general awareness about cryptocurrencies increased during the 2017/18 bull-run, the public only starts to understand and grasp the complexity of Bitcoin. We were not ready to understand this new technology in 2018, but more and more people nowadays. The younger generations realize that Bitcoin is the internet solution to a 2020 problem. The financial crisis and now the crisis caused by the pandemic have increased awareness among every age group that value preservation has changed in the past years. This time it feels different than in 2018, where the Fear of missing out was consuming the public. Many in cryptocurrencies have learned from 2018 and are now better prepared for the markets’ complexity and volatility. 

So, as I said before, the Bitcoin Bull-run does not work like a self-fulfilling prophecy because its value is based on the individual’s subjectiveness (how much some see value in Bitcoin). And since the public and retail investors do not act out of Fear of missing out anymore, they are likely to keep their Bitcoin for a longer time. Investors and you and I are all behaving more appropriately to the volatile market situation, which is excellent for a consolidating Bitcoin and hopefully a continuous run. This mentality change is crucial because it shows a maturing market situation that will eventually bring long-term price stability into the Bitcoin and cryptocurrency markets. 

So, is it too late to enter the market? 

NO, NO, and NO. It is never too late to enter the market, but please, never enter the market just for the sake of joining, do your due diligence and only invest if you have a strategy in place that might reduce the probabilities of losing your value. Starting out in cryptocurrencies is hard, but it is doable with a structured strategy and the willingness to sacrifice some time. 

To conclude, there are many reasons why the ever-growing interest in cryptocurrencies is not flattening out anytime soon. With Bitcoin set to crack new all-time highs and the growing interest of professional investors and ordinary people bring additional momentum, Bitcoin has a bright future in front of itself. Join this significant venture that combines the opportunity for independence and financial freedom. Bitcoin has outperformed this year, and it will happen in the coming too. 

If you need tips and tricks for trading and investing, do not forget to check out my website and follow my weekly newsletter tips and tricks for trading. If you need someone that shows you how to scan the markets, check out my podcast Yves talks Bitcoin on Spotify or YouTube.  

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Crypto Blog

The crypto-glossary everyone needs to have

The cryptocurrency vocabulary guide:
Digital assets offer a fresh alternative to the traditional markets; however, it is more important than ever to do your due diligence and homework about the coins you want to invest in. To understand cryptocurrencies, it takes a lot of time and effort to find the relevant information that lets you know a project. To avoid, to make a wrong decision, knowing the terminology beforehand often helps.
Let us obtain a deep understanding of what cryptocurrencies are and what they do. The best way to get started is with terminology.

Bitcoin – is a decentralized digital currency that allows an individual to send value to another individual through open-source, peer-to-peer software without using a central bank. Bitcoin is a scarce asset that cannot be inflated artificially. Many love Bitcoin because of its economic properties.

Altcoins – Any other digital currency next to Bitcoin is called Altcoins. Examples for Altcoins are Ripple, Bitcoin Cash, Cardano, Monero, or Litecoin. Altcoins follow alternative protocols differing from Bitcoin.

Shitcoins – Often used to refer to Altcoins. Bitcoin fanatics call Altcoins “Shitcoins” because of their effort to be like Bitcoin.

Blockchain – Is the technology behind digital assets. It is a distributed ledger system that stores information unchangeable and not erasable. A blockchain consists of a series of blocks that contain all the information of transactions completed in the network.

HODL – Commonly referred to as “hold” but actually means “hold on for dear life.” Slang to imply that you will keep on holding your asset and not selling it.

Long, going long, long position – Stands for “expecting the value of the asset to increase.” If you long Bitcoin, you expect its value to increase. Going long just simply means to buy an asset.

Short, going short, short position – Stands for “expecting the value of an asset to decrease”. If you short Bitcoin, you expect its value to decrease. Going short just simply means that you sell an asset.

Moon/ mooning – If Bitcoin moons, it appreciates in value rapidly.
Exchange – Market where you can buy digital assets. Not every exchange offers every token. Having more than one exchange will help get exposure to as many tokens and coins as possible.

ICO’s or Initial Coin Offerings – Describe the process where a company offers its token or coin the first time to the public to raise the value of the project. ICO comes from the initial term IPO (initial price offering) used in the conventional markets to describe the same situation just with stock and bonds instead of tokens or coins.

Airdrops – This is a method of distributing assets of a specific currency without exchanging value for it. In other words, you can participate in airdrops to get free tokens by signing up for an ICO.

Fiat currency – A currency established by a government with no real intrinsic value. Fiat currencies are inflationary currencies that can be printed more of. Examples are the USD, Euro, and Swiss Franc.

ATH or All-time high – Refers to the highest value Bitcoin has reached up to this date. If Bitcoins value has been 30k in 2020 but has never exceeded that value, this is called the all-time high.

ATL or All-time low – Refers to the lowest value Bitcoin has reached up to this date.
FOMO – This stand for “fear of missing out” and means that if Bitcoin dramatically increases in value, people tend to make a bad decision while buying or selling it because they fear to miss out on a new all-time high.

Market Cap or Market capitalization – The total market value of an asset. This can be easily calculated by multiplying the number of Bitcoin in holding times the price of Bitcoin.

Pump and dump – A scheme that involves people buying into a project to inflate the asset’s price unnaturally. As soon as they reached a specific value, they sell all their holdings and letting the currency drop to virtually zero.

Rekt – Means “getting wrecked” in the crypto-trading slang. Getting rekt means that an asset loses all its value, and the trader trading that value loses a significant amount of cash.

Bullish – This means that optimism in the market is high, and an asset’s value is appreciating. Assets are bought in a bullish market.

Bearish – This means that pessimism in the market is high, and the value of an asset is depreciating. Assets are sold in a bearish market.

ROI or return on investment – Indicates the expected amount of profits to be made on an investment. The anticipated return on investment is usually calculated before investing.

Whales – This is commonly referred to as traders or investors that move a significant amount of money. If an asset has low liquidity, one whale can determine an asset’s price by selling or buying it.

Satoshi Nakamoto – Is the famous pseudonym used to describe the founder of Bitcoin. His real identity is still, to this day, unknown.

Mining – Describes the process of forming new units of a specific digital asset. Every 10 minutes, a block gets mined on the Bitcoin network.

Noob – Beginners or newcomers are often referred to as “noobs” because they lack the necessary experience to understand the crypto buzz. It is not a very nice word.

To conclude, to understand the markets, you got to speak their language. This list of the essential terms you need in the crypto world will surely help you orient yourself and become a better investor or trader. Remember, always do your due diligence, especially when you dive into the deep ocean of altcoins.

Categories
Crypto Blog

What is a risk assessment?

Risk assessment describes how hazards are identified and analyzed that may cause a negative outturn in the planned process. Potential negative impacts on individuals, assets, or a company are assessed and eliminated or avoided. Risk assessment while trading is looking for factors that keep you out of a trade. Hazards or unusual movements are quickly identified, and if appropriately assessed, they may even keep you out of a trade. 

Three steps to assess risk:

  1. Identify the hazards – Write them down, save them. Learning while trading is the only key to success. Learn what works and what does not. Strategies are a great way to avoid risk and trades that should not be taken. For example, if there is a general uptrend, but there is a significant negative sell-off on the way. This usually keeps me out of a trade because it does not fit my rules and messes up the chart. 
  1. Assess the possible outcome – Be sure to understand what it means if you decide to ignore a risk factor while trading. Sure, it is a game of probabilities; however, the chance of finding another chart with a better build-up is very likely. 
  2. Take the necessary steps to reduce a negative outcome – Reduce your order size if you feel like it is not the best build-up. Take your stop-loss close to your entry to minimize losses. Average your entry out, if possible, by opening 2-4 positions. 
  3. Record every detail – I repeat it often, but I can not stress this enough. Record your trades, learn from your past mistakes and misjudgments. Making a mistake once is fine, but you wasted the experience if you are not learning your lesson from it. Review your recordings after a fixed amount of time, judge yourself for taking dumb trades, cherish the good ones. 

Why is risk assessment important while trading? 

The proper risk assessment will kick-off your trading career. Focus on what you see, match it with your rules, execute consistently. Trading is grinding, reduce the probabilities of having a negative outcome; if your focus is on that, you increase the likelihood of having a positive outcome. Moreover, assessing risk also helps you to identify your costs. Many beginners forget about taxes, maker or taker fees, and transaction fees to be considered in their risk assessment. Identifying every detail is not easy and involves a lot of reading and thinking, but it is well worth it. As soon as you experienced every risk situation, your trading will surely improve. 

My own experience with risk assessment 

Risk assessment is something every trader or even an investor needs to know. Risk assessment helps me to stay out of a trade. While I am looking at every timeframe, identifying hazards, and scanning with my strategy, I am not looking for trades to take, and I am looking for trades not to take. Risk assessment taught me to think differently. My trade assessment changed from FOMO driven trading to a calm and objective scanning. When I find my trade to take, I get excited for sure. The ability to anticipate future events and create processes or methods to alleviate the possible outcome is vital for every trader. 

Three methods to reduce risk: 

  1. Stay out of the trade – This is obvious but not an easy one for everyone. Fear of missing out is the biggest enemy of every beginner, and I experienced first-hand FOMO by myself. Remember, you are here to stay. Making an uneducated decision is never a wise decision. 
  2. Use a stop loss – Using a stop loss is crucial; if you want to find out more about why that is, click here
  3. Reduce your order-size – By reducing your order-size, you reduce your potential gains and your possible losses. Going in all-in is something I do very rarely. If I feel that my risk is too high while trading the markets, I only trade with an amount I feel comfortable with. 

To conclude, every trader needs to know how to identify his risk and reduce them if possible. Trading means failing. Failing isn’t cheap, but failing without reducing risk first is more expensive. Use those tips to become more successful with your trading. 

If you want to find out more about trading and investing or the economics of Bitcoin, go and check out my blog, subscribe to my newsletter, and get insight into how I am trading. 

Categories
Crypto Blog

Trading and Investing

What is day trading/ swing trading?

Yves Hofstetter1 day ago·5 min read

Day trading is the selling and buying financial tools and buying or selling them within the same day. Short-term action and lower timeframes are used to execute strategies based on indicators and trigger signals. Whereas swing trading is the buying and selling of the financial tools executing a strategy focused more on the long-term. The difference lies in how long a trader prefers to stay in a trade.

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5 reasons why you should day trade:

  1. Easy to enter — Day trading not only allows you to do what you like full-time but it also allows you to learn and see changes in real-time. This is a game-changer, learning how markets behave and executing trades daily is perfect to give you the understanding of the markets you need in order to see the long-term aspects of trading or investing.
  2. You can become independent — Day trading is a business if you think about it. If you manage to trade enough value and your execution is good, day trading might be the key to get you off your job and into a new field. But do not forget, trading is not easy, take your time learning it. You will only become successful when you practice and stay consistent with your approach.
  3. Work from wherever you like — This one sounds too good to be true, but it isn’t. All you need to trade is a stable internet connection, your laptop, and your everything else you need to be in the mindset. Trading even got easier through most of the exchanges offering Apps to download onto your mobile phone which enables you to execute your orders or manage your portfolio on the go.
  4. Day trading gets you off the idea “get rich quick” — I know, this one might sting. It is the truth, nonetheless. To become a successful trader, you need consistency, know-how, and the willingness to make mistakes. 90% of new cryptocurrency traders that just started out, end up with significant losses and no funds left after a month. Try to avoid being one of them, use a Stop-Loss, and manage your risk, if you need help with that, click here.
  5. If you can afford to lose money — The most important lesson to take away here. Be prepared to pay for your experience. Learning is a hard process, make mistakes but try to learn from them. Take screenshots, review your misjudgments, and don’t do them again.

5 reasons why you should swing trade:

  1. Less time consuming — Since you will not find yourself scanning the market all the time, you will have more time to work, do stuff with the family, or just enjoy some time off-screen. Swing trading is perfect for you if you need time off, all you need is a solid strategy and check on your investment once or twice a day.
  2. You can stay in the market for longer — Day trading needs you to set your Stop-Loss very close to your entry value which involves the higher risk of being taken out of the trade to early, swing traders can average their entry out by opening 3 -5 orders normally. However, by staying longer in the trade you increase the chance for a negative outcome and the risk.
  3. Rewards are usually way higher than day trading — Since swing trading allows you to adjust your Stop-Loss to a level that takes volatility into account too. Day traders normally use trailing Stop-Losses that take them out on the declining top of a candle. Swing traders are fine with giving back if it means that they can get more gains later.
  4. Cut out the noise markets are creating — Swing trading helps you to stay away from low timeframe charts. Hunting for news and trends is not necessary, just sit back and enjoy your strategy.
  5. Fit trading around your routine — Day trading is the other way round, to be successful you need a daily routine. Swing trading offers you the chance to plan your schedule when you check the graphs. You decide whether it is necessary to check the news for valuable information. Swing trading helps you to analyze the markets in a much shorter time since you are looking at the higher timeframes of the chart.

What is my recommendation?

Trading daily is fun and very good to get the hang of trading in general, having daily exposure to the charts and the movements of the markets will make you become a better trader. However, do not get lost in all the buzz out there. Day trading is full of people telling you what you should do and where you should invest. Keep it simple, stick to your strategy, and question everything you hear about trading. Do your due diligence and be sure that you invest in something with value. However, swing trading will help you to cut all that noise out of your trading, swing trading is the optimal way to test new strategies or prefect the ones that are already existing.

To conclude, I recommend starting with day trading, find the edge. Get yourself into it and learn what makes sense to you. There are many people out there trying to sell you something. First, find out if trading is something for you by using free material. Secondly, if you find yourself at a dead-end, get a mentor, and pay for a course. It is well worth the price if you find the trader that suits you best. I always imagine myself swing trading with 60 when I can’t be bothered looking at the charts anymore, that doesn’t have to be that way, swing trading is worth trying out as soon as you got your fundamentals right. It might be even perfect for you!

If you want to find more educational material covering trading, investing, and the economics of Bitcoin, check out my blog and subscribe to my email, I will be posting all my knowledge and experience for free on there.