Day Trading Strategies For Cryptocurrencies

Day Trading Strategies For Cryptocurrencies

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Nonetheless, it's after 10:00 already, at least  where I'm sitting. Good morning, good afternoon   or good evening, depending from where in the  world you've joined us and welcome to our very,   very first webinar here livee from the PrimeXBT  Trading Academy. My name is Dirk and I'm the Head   of Trading Education here at  and I am what probably you would consider a  

professional trader. So I've been trading for 20  plus years, actually started my career in 1998,   so that makes it 24 years, so  already almost a decade already   have been working throughout my life for numerous  institutions such as banks, family offices and   brokerage companies, as financial advisor,  as a trader, as risk and many of us also   in Singapore. And since 2019, I have  decided, or in 2019 I decided that I   don't want to be an employee anymore because I  always loved very much trading as a profession.   But what I didn't like is, you know, all of us  corporate political games you sometimes have   in company. So I decided I want to run my own  trading book, which I've been focusing mainly  

since 2019 on in last year, I was approached by  a prime expert team and they basically told me,   Hey Dirk, you have been a client of us for quite  some time now already. You are very successful   in what you are doing with your trading, and we  are looking for somebody that helps us build up   a trading academy that takes our clients by their  hands and shows them from a professional point of   view. All those little trips that can linger out  there on your way to to becoming a professional   trader. And I think this is something you do not  see that often in this industry. So it was more   than happy to to join and, you know, and a couple  of times a week to share my thoughts on the market   on trading, whether it be with YouTube or in  the format of life webinars as such as this.   And we are also life now on our homepage. So if  you go to and the products here,  

you will find the trading academy on the right.  Here you always see the webinar that's coming   up next. So today, you'll see the webinar for  next week probably today. We have this section   called "That Crypto Show", where I once or  twice a week share my my thoughts on what   is going on in the cryptocurrency markets. You  can also find everything, of course, on YouTube.   You'll find platform guides here that show you  how to operate the PrimeXBT platform, basically,   and we have trading and crypto courses that you  know, go more into general things like focus on   what is technical analysis and more specific  things. For example, here's one how to find  

the perfect stop loss, so go and check it out.  You can find everything, of course, also here on   YouTube. And I'm, of course, very happy if  after this webinar, you want to check that out   and maybe become a subscriber. That's  of course free. So nothing to lose them.  

Also, before we start, of course, if we are going  to to talk about trading, about day trading today.   So I'm really I'm somebody that is very hands  on. I'm not going to talk very much like or   you should have could have and so on and so  forth. And I want to show you really a strategy   that I am trading almost daily and I'll show  you what trades. This strategy did yesterday   will use bitcoin as an example, but you can use  the strategy basically on every market out there.  

Nonetheless, guys, this is not a fire and  forget strategy. So this is very important.   Never follow somebody just blindly. Yeah,  I'm a pro. I know what I'm doing. I've been   doing this for a very long time and all  of what I'm showing you is working. But   just because it's working for me doesn't  necessarily mean it's working for you. Trading is   very, very individual thing, and I'll give you an  example of it. I used to have a colleague who was   a very, very good day trader when it came to oil  futures so he would trade WTI oil futures all day   was very good at that brilliant I would call him.  But when he tried to apply his trading strategy  

to other markets, he would utterly fail, fail. And  for me, it's the other way around. I'm pretty good   in a lot of markets, especially cryptocurrencies  and forex. But when it comes to trading oil,   I tend to always lose money. So this is what I  mean. You know, our trading strategy is always   something very, very personal. So I hope that  I can inspire you a little bit. Or maybe take   what I'm going to teach you about your day to stop  building your own trading strategy that is really   suited to your personal mindset. So that  is very, very important. And never just   blindly copy trade. Somebody always use your own  brain, do your due diligence, and there is no  

trading strategy out there that is like the  holy grail of trading with an indicator that   is correct all the time and that guarantees you  to become a millionaire within two weeks. If you   read about something like this out there.  It's 100 percent B.S., so please don't fall   for that. OK, so we're going to start here  before looking at the strategy itself by.  

By having some thoughts, so when I come on to  my sit down at my trading desk in the morning,   I usually go through the news first because I want  to get an impression on how probably the market   that I want to or the markets that I want to trade  today are going to behave in terms of volatility.   So for those of you guys who don't know  what volatility is, this basically means   how high the swings to the upside and  downside are going to be. And as traders,   especially for day trading, we are always looking  for a bit of volatility. So we want, we want,   we want the market to swing up and down a little  bit because we need some movements in order,   of course, to profit from that. Nobody likes the  market but just goes sideways. You're not going  

to make money usually from that, except maybe you  are selling options, but that's a whole different   story. And so I want to make up my mind in the  morning. Is this going to be a low volatility   day today with asset? Is that going to be like  normal volatility? Or are we going to expect high   volatility because this is going to have an impact  on the decisions I allow my trading system later   on to to make? It's going to make different, more  conservative decisions, and the high volatility   setting is going to be a little bit more  aggressive when I expect it to low volatility.   So I'm going to show you later on the trade  with a system in bitcoin I did yesterday   for now. So yesterday I sat down and I kind  of expected Zoom in here a little bit for you,  

but it's probably going to be  somewhat emit today volatility because   the news out there yesterday were like not  so specific about what's like talk going on   here on Bloomberg, on that regulators across the  globe are. Kind of getting more serious about   regulation, but nothing that is my opinion  was not already in the market. Also, we were   approaching this middle band of the Bollinger  Bands. And usually the market is not going to  

go through that with a lot of momentum.  So I kind of expected for yesterday,   maybe we're going to attack this middle band and  then probably we are going to close above where   we started, which was correct. Yeah, as you can  see here, we're up here, wick down here with the   opening and closed pretty much together. So this  is what I like to call it Volatility Day if I'm  

expecting a high volatility day and this is always  difficult to expect, of course, because usually   price swings like this candle here, for example,  are coming. I wouldn't say out of nowhere, but   it's hard to to forecast them than low amid  volatility day. If you see something like this   and you are a day trader and you really see  the markets go crazy, like this day where   bitcoin really dropped by 12 percent. By the way,  this is too much volatility. Usually there is,  

at least from my experience, no trading system out  there that can handle this type of volatility. So   this is a typical day where you might want to  decide, Oh my God, things are going crazy. The   mechanisms of the market that usually work are  not working anymore. So I want to stay at the   sidelines today, and I'm just going to watch  the market participate in this. This is totally   legitimate and absolutely something you should do  because our main goal, especially the beginning,   if you're a beginner trader, is always to first  come to a point where we might to long term do not   lose money anymore. When you have reached the  point, then you can start thinking about, OK,  

now I want to go the next step, I want to start  earning money with it. So we made a volatility   decision for yesterday. We thought, OK, it's going  to be a middle volatility or low volatility day,   probably. And this is going to mean we can  maybe be a little bit more aggressive with   our trading system, with the entries and exits  of our trading system. And this trading system.   Is actually taking into account one, two, three,  four, five different things, so it consists of of   a shot. In this case, it's bitcoin here on the  left chart, the right shot, by the way, the S&P   500. More on that later. Why you have two shots  here for trading bitcoin. And so I have Bollinger  

Bands Simple Standard, Plain Vanilla Bollinger  Bands placed here on on my Bitcoin charts. It's   a five minute bitcoin chart, by the way, but you  can do trade the same also on on 15 minutes, 30   minutes an hour and so on and so forth. One minute  maybe might be a little bit difficult because   probably the trading fees at one point are going  to be too high in relationship to your earnings   expectations. You'll see what I mean by that later  on when I show you the statistics about yesterday.   Excuse me, I always need some coffee in my mouth.  So we want so we have a Bollinger Bands up here,   down here, we have an RSI and I like  to always call this my special RSI.  

So it's a relative strength index, a vanilla one,  and then I put two and moving averages over it.   First of all, a weighted moving average and  the second is exponential moving average.   And now the definition, like the textbook  definition of of an hour is a trading strategy   would be you want to sell if the RSI goes over 70  and you want to buy if the RSI goes under 30. But   this strategy does not work. So  there's a lot of research that has been   going on about RSI, and this textbook strategy  does not work, so we need to modify it. It's   still a good indicator, in my opinion, because it  shows you is up the price of the market of your   asset of bitcoin. In this example, at the  moment, prices that are out of what you can  

expect from is standard deviation. So from  the goss and bell curve, so to say or are   they in line, but you can if you treat it like  like textbook. So for example, you would have   entered the market here. At risk Canada already  at. So you would have thought here at thirty   eight thousand six hundred. But look what, what  happened after this? The market still went up   by more than 600 U.S. dollars, but the market  went against you and this is going to do stuff   to your mind, of course. So there must be better  ways of entering the market. And in my opinion,  

a better way of entering the market is to, first  of all, wait for those sorts of extremes and then   wait until with, in this case, a sharp decline  virus if it's below its moving averages. And if   you do, that's all you can see. But let me zoom in  a little bit for you here, so it's better to see   to see so that what has happened here at this  point. At this candles, so you would have thought  

at the I sort not would have in this case at  the opening of the next candle here at thirty   eight thousand nine hundred and fifty  roundabout or forty. And you can see much,   much better entry and then what you would have had  with a classic definition of our site. Right. And   so and so this is what we the first rule of thumb  here for this trading system. We want to wait  

for sharp corrections of the arrows. I know  those two moving averages. And you want those   corrections to be in extreme zones. So we don't  want to we don't want to see this. We don't care   so much about what is going on here between 40  and 60. So whenever you see across them, I'm   pretty much going to ignore that if we are in, if  I expect a day with that same medium volatility,   I might also trade crossings, which I see here  on the downside, between 30 and 40. That's why   I have lost two green lines here and sell the  market if I see shop crosses between 60 and 70.   Now the cross itself is not the only thing  I'm looking for here. I also want to see  

that the market has reached for by position this  lower end of my Bollinger Bands, and I want to see   the other four sell positions that the market has  reached the Upper Bollinger Bands or penetrated it   in this case already, because I want the market to  be as extreme overbought or oversold as possible,   and we can go through a trade here, for example,  my first trade on this yesterday. So I saw the   market coming down. We were already trading at the  lower Bollinger Bands here. I saw the RSI coming   back from under 30 and going over and over its  moving averages, so I entered the market. So here   on the next can open roundabout at thirty eight  thousand three hundred. And what I'm doing then is  

two things I'm going to wait. Obviously, I'm going  to set my stop loss at the last law, so that would   have been here or that was here in this case.  And then I'm going to wait and see if the market   really does an upswing once the market has reached  this middle line of the Bollinger Bands. I tend to   I tend to move my stop loss to break, even because  the market has gone into my direction already, and   I don't know if it's going to reach the upper end  of this point still. So I want to move my stop   loss to break, even to make sure I'm not losing  money on this trade anymore in this case, with   the market continue upwards. And my take profit  is going to be at the upper end in this case,  

a roundabout at thirty eight thousand four  hundred fifty three. Picture perfect trade   in this case worked out very well. What you will  see very often also and you'll see that later on,   is that once the market has reached the  middle Bollinger Bands, it's going to reverse   and maybe hit a stop loss. This is part of the  game, so don't be set. You know, if the market   comes back, then hits your stop loss, which at  this point probably is going to you're going to go   get out of the market without winning or losing  anything. It's just normal. And if the market   then continues up, well, salary, this is what  happens, but you just move on to the next trade.   So second, trade in this case was an extreme  trade. So I saw we saw this sugar spike up here.  

I mean, this is a five minute chart, of course.  The movements of March, the two percent always   look a very huge on on five minute charts, but we  saw the RSI, the market and the RSI spiking up. I   waited until we saw the cross again. It was a nice  cross over 70. So this is really an extreme sign.   Saw the market up here at around about thirty  eight thousand nine hundred and fifty. Market  

went down when it reached the middle end. I  moved my stop loss to break. Even in this case,   the market moved even further down. I got a  little bit nervous because I saw the market   approaching here and then retracting again, so  I closed the trade round about here already sort   of waited a little bit longer. I would have had  the chance to get out even lower. Nonetheless,   this was a great trade and this was a great trade  picture, perfect trade for this trading system.  

In my opinion, that happened. And if you have  one of those trades a day, you're already going   to make a bank. I can promise you that now as  we move forward in the in the day. So this was   yesterday at around 10:00 a.m. As we move forward  through the day, I'm going to start shifting   my focus to also look at the S&P 500. You see a  little bit forward, yeah, here we go. I'm going to  

also stop focusing on the S&P 500 for my bitcoin  trades. Now why am I doing this? Excuse me.   Because there's a large correlation between the  stock market and especially the S&P 500, which is   the most important index, a stock index in the  world contains the 500 largest publicly traded   U.S. companies by market capitalization. And if  we. If the S&P 500 or you can also do the same   with a nest egg, by the way, goes up or down  by a large margin, you will usually also see   cryptocurrencies doing the same moves. And this  is something normally we we cryptoassets. And as   you can see, I'm really a bitcoin enthusiast in  the long run is something we don't like to hear.   We don't like to hear that. Yeah, the stock  markets are influencing the cryptocurrency market,   but it's true. And the closer the  opening of the stock market comes,  

so the official opening of the S&P 500 of the  US stock market. New York Stock Exchange is at   3:30 p.m. my time with more on a normal trading  day. That is, you will see that bitcoin is going   to move very much like the S&P 500. And so I'm  have to switch here in my consideration of taking   positioning. And not only what is going on with  the RSI and the Bollinger Bands here in Bitcoin,   I also need to have an eye on the S&P 500. So if  I see, for example, the signal here, it tells me,  

Hey, I need to sell the market here. But the  S&P 500 is maybe at this lower Bollinger Bands.   I really have to strongly reconsider if  I want to trade this trend, because if it   if the stock market's been suddenly starts running  up, the chances of bitcoin copying that moves are   very, very high. This does not work every day like  this. Usually there is a correlation and there is   a correlation, by the way, because you have a  lot of algorithmic traders algo, but so to say,   trading this correlation. So it's a bit of  a self-fulfilling prophecy, and I'm going to   show you an example also from yesterday for this  now. Again, here we have bitcoin. So this was at  

at 130, around about 135 going up again.  The RSI going above 70, we were hitting   the upper Bollinger Bands here. We saw the  cross, the sharp cross that is so you don't   want a slide because you really want to slump  down in this case here again for for bitcoin.   So at this point, we're at thirty eight thousand  six hundred seventy five roundabout. And   but if you look here to the right and I hope  you can see my cause of it as well. The S&P   500 was also at the Upper Bollinger Band, but  if you look at the RSI for the S&P 500, it was   still a little bit in no man's land. So there  was not so much going on nonmember. The less  

I decided yesterday to take this trade and watch  what happened then. So I shot at the market here,   and at the same time I saw the S&P going  further up. Bitcoin was going a bit sideways,   so you could see really, OK, the market  wants to wants to go sideways here. And but.   Due to the rising stock market, there was also  pressure to the upside, as you can see in this   candle, it was like the market wanted to go  up, but it couldn't at that moment, very good   and I was, in this case, quite lucky. So because  we actually moved to this middle Bollinger Bands,   I was able to put my stop loss to my break, even  in this case. You can see market continued lower   then, but then reverse to the upside very, very  quickly again. And this is because S&P started to  

started to go to the upside as well. And you  can see, let me circle this here for you.   So it's maybe more more clear what I mean, like  if you look at this phase of the market, the S&P   on the right and the same face. For bitcoin, you  can see how much alike most movements are. This   is really because the closer we get to the opening  bell of the New York Stock Exchange, not with S&P.   Don't be confused. It's traded almost 24 seven,  but in the morning European morning with an  

invitation session with very low volumes. That's  why, in the beginning of the day, I'm always   not looking too much on the S&P 500. But the more  we move towards opening bell of the New York Stock   Exchange, the more I'm going to also consider what  is the S&P 500 doing or what's Investec doing and   taking consideration with my bitcoin positioning  here? And you can see the moves very much like   so bitcoin was merely copying the S&P 500 in this  case. And then at 3:30 opening bell, things always   go a little bit crazy on the stock markets vis  repositioning going on. Same here, Bitcoin. So  

it's going to become a little bit jumpy and  throughout the day, even until at least the   closing of the New York Stock Exchange, you were  on a normal day. See the cryptocurrency markets   pretty much copying what the S&P 500 is doing and  other things you want to have a close eye on are   economic events. So if we, for example, let's  see what we have today. Later on today, folks,   we have the ADP national employment coming out.  So this is pretty, pretty important. At 2:15,  

you might want to try to stay out of the market  because if this number four most important   event is like very, very different from what is  forecasted, the market might go crazy for a little   while and all the technical analysis we are doing,  all trading systems usually cannot handle this.   So you might want to wait a little bit at the  sideline, maybe for a half hour or 45 minutes   until things have normalized a little bit again.  And this is especially true like first Friday   every and every month. So it's going to be this  Friday again when the unemployment report from the   U.S. comes out. All right. So quick summary again  here for strategy, and then I'm going to show you   some results of yesterday. This again, we want  to have we want to wait for a full set of signals   until the price of bitcoin reaches the high end  of the Bollinger Bands. We want to see the RSI  

falling below its moving averages, and the higher  the better that happens, the better the sectors.   If the market goes down, we're going to initially  put the stop loss at the last high, by the way. So   always, please always use a stop loss. Markets  can go crazy any time and you don't want to,  

especially if your trading desk without having  a stop loss in place. I can tell you stories,   for example, of a friend of mine who had a euro  dollar position, then went on a plane for an hour,   and when he got out, he had lot of her. He had  lost 50000 U.S. dollars just because he didn't   put a stop loss. And then the market went crazy  why he was up in the air flying. So you don't want   to do that and you protect your capital under all  circumstances. Once the market reaches the middle   Bollinger Bands, we are going to put our stop loss  to break even maybe a little bit more than break,   even because we're also, of course, paying  trading fees once we reach this area. Let me  

say of a lower Bollinger Bands we can close for  trade for a long trades is the other way around.   So we had an example here, folks, yesterday. And  as you can see, I like to play this conservative.   So here the market came about as I came back from  the low 30s crossed as moving averages market.   I entered the trade market went up middle.  Bollinger Bands hit move. My stop loss to   break even Upper Bollinger Bands hit and I take  profit them the later day. It gets all the more   we are getting into the area of the opening  of the New York Stock Exchange. The more we  

need to take into consideration also what the  stock market, the S&P 500 or nest egg is doing.   So if you have a signal here, even if it's in the  extremes, but you see the stock market's doing   something totally different at the moment,  you might want to decide to wait it out at   the sidelines because on normal days, the crypto  markets are going to copy what the stock markets   are doing that we don't like that, as I said, as  crypto heads, but nonetheless, it certainly is   true. OK. So let me show you some results. So for  this strategy yesterday, and this is, by the way,   another important part of being a trader, if you  want to do things in a more professional way,   you need to have something like a trading diary.  Take. Own take note of all the traits you did,   not only because you want to have an overview  by the end of the day and by the end of a month,   what you were earning and how your risk  reward ratio was. And all of us have a nice   little financial metrics. You can apply to your  trading, but you you really want to keep track of   what your net profit is if you want money. Have  you lost money? If you see, Hey, I lost money,  

you can go back and really into the shots  and say, OK, what was going on? There was   something maybe I didn't see that that  happened on the market. And for bitcoin,   as you can see the strategy, I'm trading on  a number of different assets out of them. And   with bitcoin, I made three trades yesterday. They  were all impressive profit. This was quite a good   day for the strategy yesterday. It does not have  to be like this every day, so it's totally normal.  

Also, if we have like crazy volatility days like  this to lose money with a strategy like this,   this is part of the the game. That's why it's  so important to never risk all of your money or   last large portions of your money on one trade.  So I risk you release something between one to   five percent maximum if I'm like, really,  really, very, very sure about a trade and   you can see I had to. So this is, by the way, bear  this diary takes on what happened in the trade. If   one bitcoin was traded later on, I'm going to show  you, I'm adjusting this with the leverage I took   on an individual trade. So I'm not always just  trading a leverage of one to one or one to five.   Depending on how good the signal is, I  might choose a higher or lower leverage.   And you can see with one bitcoin, I made 734 US  dollars from this trading strategy, paid a little   bit of ECL. Luckily, Prime Expertise is a trading  platform with very, very low fees, and you can see  

how how the fees really affect. If I would have  paid something like zero point one, five or 0.2   percent, like a lot of the platforms out there  take in fees, I probably would not be able to   earn money with a strategy because the fees would  eat it up all. And so I'm going to take this down   for every asset I am trading. I'm going to do  adjustments for leverage and conversions because   I usually count my profits and losses in U.S.  dollars. So I need to convert them, of course,   to U.S. dollars. And then by the end of the day, I  have a total. I have this extra sheet summarizing   and adjusting the leverage for every asset. I'm  trading the strategy and as you can see, bitcoin  

because I took a little bit more leverage on the  second trade than a very good signal. It was like   really the superstar yesterday. Quite a lot of  money. But you can also see here, for example,   Ethereum and especially in Apple and and the  next tech where this didn't really work out   well yesterday. And this is very, very normal. If  you trade this kind of strategy on any strategy on   a number of markets, you always have markets.  But David, don't work out too well. You have   markets that work out very, very well by the  end of the day and one thousand eight hundred   and fifty us on us with this, and I  paid 690 U.S. dollars in trading fees.   And I mean, they match. And this is worth 0.05  percent. Imagine this would have been 0.10,  

then I would have paid already double for trading  fees. That's why it's so important to to have a   platform where you trade something like this that  has low fees and luckily PrimeXBT is one of those   platforms. So by the way, if you are not yet a  client of prime expertise, I'm going to leave   you a link where you can sign up. I'm going to put  this in the chat and hope you guys can see this.   And the beauty of it is that if you sign up  under this link and the guys out there will   see that you are a student of the training academy  and they are going to have some nice perk every   now and then for you. And if you want to start  training already, you can also use a promo code.   So this is this one here called TRADINGACADEMY,  and you can enter the promo code if you go to your   margin account and win here on the left  account, the promo code, the trading academy,   all in capital letters. And then you can get up  to 7000 U.S. dollars in bonus on your deposits.  

So it's quite nice and gives you some some extra  margin and you can trade with and secure your   trades. OK, so I have enough advertisment on that.  I hope I kind of inspired you guys a little bit   with how you can approach trading. So my goal  really is that after this, we now know which   is going to end in a couple of minutes that you  maybe sit down and not copy this one to one, but   understand that through first of all, no trading  strategy is always going to work. Second of all,   you can take classic trading strategies like the  RSI and modify them and play a little bit around   with the averages, with the Bollinger Bands, with  a settings for this until you find something that   you are comfortable with and that you understand  that market influences of the financial market is   the biggest puzzle, in my opinion of the world.  That's why I'm personally so fascinated by it,   because you have all those little tiny wheels  that end up influencing if we focus on the   S&P 500 or bitcoin is going up or down. And it's  our task as traders to find out what was turning   wheels are actually investment banks had for  hedge funds, spend hundreds of millions of US   dollars every year to find out exactly that.  And so these are the guys when it comes to day  

trading sometimes that we are competing against.  So we have to choose our trades very carefully.   And you can see I'm talking about day trading  here, but in the case of bitcoin, I only did   three trades yesterday because it's important  to be patient. It's important to wait until you   really see a good signal. I do not trade because  of the click click click action and the adrenaline   it gives you when you when you enter or exit a  position trade, when you see that a good sign   and a high probability set up. And even if the  set up fields well and move on to the next rate,  

don't take it personally. Never risk. More than  one to five percent of your account balance per   trade must always remember for for every good  trade, for every good day trading day out there,   but it's going to be a better day on the horizon  coming up and a better day where you make losses   with both. Any trading strategy should not be  a day that really blows, account or destroys   50 percent or even 100 per cent of your account  balance. Don't do that because this is going   to mess you up mentally. All right. Thanks for  your attention. I hope you liked this. Later on,  

check out our website again. So next week, I'm  definitely going to be back with another webinar.   And if you have any questions, any requests,  maybe specific assets that you would like to   to me to talk about and or to analyze. You  can also write to us and the academy at.   Prime sbt dot com. So this is this this email  with a directory reach me and my promise is I'm   going to answer every single e-mail coming back,  so don't be shy and request some things other than   that. Remember to go to our YouTube page and leave  us to like, subscribe to our channel. I'm going to   see you again next week. Take care. All the best.  And remember, always use a stop loss. Goodbye.

2022-02-07 13:14

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