42 Lessons You MUST Know To Maximise Profits In The 2021
Crypto Boom
The Story
Over the past 2 months, I have been inundated with requests from friends,
family, and people I don’t even know on how to invest in cryptocurrencies.
Being quite experienced,, entering the crypto space 3+ years ago and spending
several hours a day learning, I take it as my responsibility to make sure they
don’t make the same mistakes I did.
But providing all this support is overwhelming to say the least. There is SO
much to learn. And a lot of it is now second nature to me, so it becomes hard to
realise that even the most simple concepts are probably unknown to who I’m
speaking with.
It was on November 25th, 2020, that I realized that the key lessons I teach to
these newcomers are universally the same, and I end up just repeating myself.
So why not package everything I’ve learnt into a FREE, and comprehensive guide
on everything you must know for this crypto boom?
Two weeks later, I present ‘42 Lessons You MUST Know To Make Money In The
2021 Crypto Boom’
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
1. MOST ALTCOINS ARE SCAMS
If you wish to invest in altcoins, you must keep in mind that 95% of altcoins that
were created have FAILED.
-
Since 2016, 4 of the top 10 coins still remain in the top 10.
Of the top 10 coins in 2016, arguably only $BTC and $ETH have seen
meaningful adoption and usage for non-speculative purposes.
The results for what remains in the top 100 2016 is much worse.
2. You won’t get ‘rich’ off of holding Bitcoin
-
The 2000%+ gains of prior bull markets are likely behind us.
Bitcoin’s predominantly valued based upon its network effect. Network effect =
total users in the network. Bitcoin went 2000%+ in the last bull market because
its user growth was at a similar rate.
There are an estimated 25 million Bitcoin users. The user growth required for
price to 20x this bull cycle would ultimately bring the Bitcoin network to a halt.
Bitcoin has not scaled nearly enough to handle this level of growth.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Unless in the next few years Bitcoin can scale rapidly, this level of user growth
won’t be sustainable.
DISCLAIMER: If you have 6 figures + in Bitcoin, you will make A LOT of money
this bull market.
If you own $2000 of Bitcoin and expect to get rich, forget it.
3. Bitcoin is the ultimate inflation hedge
Bitcoin is one of, if not the only asset on earth which has a low FIXED inflation
schedule, consistently declining over time.
The current Bitcoin inflation rate is roughly 4%.
In 2024, the inflation rate will drop to 2%.
In 2028, 1%.
As Bitcoin becomes more and more scarce, the network becomes more and more
valuable for storing wealth.
More people storing wealth = more users = greater network effect = higher
prices.
This is why we HODL.
4. Best valuation metrics for Bitcoin
From 3+ years of searching the best ways to determine when to buy Bitcoin,,
these are the best tools I have found. They are simple and straightforward, so I
won’t break them down here, you can read into them yourselves:
1. Puell Multiple
2. Hash Ribbon
3. 200W Moving Average
4. Unrealised Profit and Loss
5. Cuban’s BTC spot buying guide
6. Funding and Premium Index
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
This last one is quite confusing, but is very powerful. I give a full breakdown in
my other free gumroad course here.
5. Second guess everything
This is another very important lesson.
Crypto was, and still is the wild west.
The most important part for 99% of people here is to make money.
And unfortunately, people are willing to do immoral and corrupt things to
achieve this.
Any new coin, premium group, analyst, trader, investor, coach, etc who you think
is good, you must personally verify their success
What does this involve?
- Track their signals and see how often their correct
- See what other big accounts in the industry think about them
- See if they post their equity growth curve. This is the ultimate receipt.
- As counter intuitive as this sounds, most scammers are not anonymous.
The best traders you will come across on twitter are in fact anonymous.
6. The 4 year cycle
The 4 year cycle is an interesting concept explored very in-depth by Bob Loukas
on his youtube channel
The basic premise of the 4 year cycle is that Bitcoin historically has followed a
pattern of 4 distinct price movements recurring every 4 years.
Phase 1 is exponential highs
Phase 2 is a Correction
Phase 3 is accumulation
Phase 4 is recovery and continuation
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
-
Use this tool to understand what stage of the market cycle we are in, and
thus whether you should be a buyer or a seller.
7. It will be 3 years before you make money as a trader
You’re reading this and thinking: “Pssh, this guy doesn’t know what he's talking
about. I know me. I know I am good at managing my emotions. I’m really smart, I
went really well in high school!”
The market doesn’t care what your grades were, how well you can discipline
yourself to have cold showers, how fast of a learner you are, etc.
You WILL pay your tuition to the market.
The only way to speed up this process is to directly learn from a mentor who
already makes money trading.
Make sure when you begin your trading you trade with small amounts. Enough
to feel pain when you lose, but not enough that you can’t pay your rent.
If you can’t profitably trade for 6 months with $100, then you definitely won’t
with $1000 or even more so $10000.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
8. Crypto people to stay away from
I don’t know everyone in the space, but these are my list of people who are either
confirmed scammers, or not quite scammers but are fucking idiots.
1. Most crypto youtube accounts
2. 95% of female traders on twitter who use their sexuality to build a brand
(They don’t know how to trade or invest. This is not sexist, just stating
facts. There are some amazing female crypto traders/investors.)
3. Richard Heart (HEX creator)
4. Roger Ver
5. Craig Wright
6. Suppoman
7. Ian Balina
9. Accounts to follow
This is my tailored list of crypto twitter accounts from over 3+ years of searching
for the best content:
1.
2.
3.
4.
5.
6.
7.
8.
BitcoinJack (Amazing swing trader)
Classic Macro (The best macro analysis and how it relates to crypto)
Bob Loukas (4 year cycle guy, amazing trader)
Loomdart (Great at picking tops and bottoms, god with funding tool)
Beetcoin (Incredibly clean charts, great with market psychology)
Alex Saunders (All round good at everything)
Anbessa (95% hitrate on his trades, amazing trader)
Zhusu (DEFI expert)
10.
Best exchanges
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
I am going to list a few exchanges here, each with their own benefits that I will
outline:
1.
2.
Coinspot
Australian only exchange
No fee deposit/withdrawals
0.1% buy/sell fees (lowest in Australia)
Large selection of altcoins
LVL.com
- No fees at all
- $9/month
- Unlimited trades
- Small selection of altcoins
- Good choice for those in the US
3. Binance
- Crypto’s largest exchange
- Has almost every altcoin you would want to buy
- Low fees
11. Crypto terms
-
FUD (Fear, Uncertainty, Doubt)
FOMO (Fear of Missing Out)
Whales
Pump and Dumps
ATH (All-Time High)
HODL (Hold on-for Dear Life)
Moon
BTFD (Buy The Fucking Dip)
51% attack (When someone owns 51% of the network computing power
and can take control of the network)
Bear trap (Price breaks below a key level, and quickly rises back above,
trapping those who sold)
Shorting (Selling a coin in hopes to buy it back lower)
Longing (Buying a coin in hopes of selling it later)
Buy wall (Lots of buyers in one spot)
Fork (One coin splits into 2 different coins)
Gas (A measure of how much to pay for a transaction on Ethereum)
ICO (Initial coin offering)
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
-
KYC (Know your customer, this is used to verify you when you signup for
an exchange)
12.Best altcoins
These are my favourite coins. This is not financial advice. None of it is. This is
based on my research and understanding of the altcoin market for 3+ years. Take
from this list what you wish:
1.
2.
3.
4.
$HEGIC
$FTX
$AAVE
$YFI
13.The money is first made on paper by retail, and stays on paper
This is an important lesson.
In a bull market, retail makes lots of wealth.
They celebrate as they are euphoric at the top.
Showing off their newfound wealth to their normie friends.
They’ve ‘finally escaped the rat race!’
Then price crashes. And all this wealth is wiped away.
They hold because ‘my money is with good investments’ ‘This is just a cool off
before new ATH’s’.
But the truth is, in every bull market in history, retail first makes money on
paper, and it stays on paper
Don’t be the sucker who never takes profit.
13. Understanding why the Bitcoin price moves like it does
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Bitcoin’s price action can be summed up into two distinct driving forces:
1. On a longer timeframe, Bitcoin’s price is driven by investor activity and
it’s adoption curve. The amount of users, how valuable Bitcoin is to
use/hold, as well as how developed the surrounding infrastructure is gives
Bitcoin an underlying ‘price floor’.
2. On a shorter time frame, price is determined by which direction can
liquidate the most traders on derivatives exchanges like Bitmex and Bybit.
Here is a simple illustration to help you visualise:
Reflexivity
If you only use one word to describe Bitcoin’s volatility it’s this.
Coined by George Soros, reflexivity is the theory that a two way feedback loop
exists in which investors' perceptions affect the market environment, which in
turn changes investors' perceptions.
Put simple, higher prices beget higher prices, and lower prices beget lower
prices.
Why does this occur?
Because reflexivity is foundational to the nature of Bitcoin, as no other asset on
earth derives such a significant portion of its valuation from its own Network
effects.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Network effect = total number of users of the network
As markets are future looking (people are trying to predict what happens) the
market is collectively deciding what the future adoption of Bitcoin will look like.
But because Bitcoin’s main use case is its ability to make money through
speculation, it creates this two way feedback loop:
This is why we get really big runups and subsequent big pullbacks. Reflexivity is
like a snowball rolling down a hill, getting bigger the further it goes, except it
goes both ways.
Every indicator, tool, script, and strategy is based off of the underlying
concepts as discussed above. This is the base level understanding you need to
gain, with which we can branch out from and go down the rabbit hole that is
crypto!
14. Trading is zero sum
Your gain is someone else’s loss
Most things in life aren’t zero sum. But some things are, including fame, and
trading.
Trading is zero sum because the sum of all gains and losses equals zero.
You need to keep this idea in the back of your head everytime you trade.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Your goal is to take someone else’s money because they make a mistake. And
they have the same goal.
If you only trade when other traders are likely to make mistakes (during periods
of increased volatility when they’re emotional) you will be more likely to succeed.
15. For every buyer there is a seller
This is similar to the last point, and is a simple concept.
Every time you buy Bitcoin, someone has just sold it to you.
You think you’re getting a good entry, and another is thinking they’re getting a
good exit.
Every time you enter/exit a trade, you must remember this. Ask yourself:
-
Why is someone letting me enter/exit here?
Am I potentially on the wrong side of this transaction?
Why is this person buying/selling to me?
Is their side of the argument more or less likely to occur?
This will allow you to keep your emotions at bay, and make sure you’re trading
from a place of rationality and logic, not emotion.
16. Everyone gets what they want from the market
It doesn’t matter if you make millions in crypto, lose millions, sit at breakeven,
EVERYONE gets what they want from the crypto markets.
Some like to gamble. They’re losses are the fee they pay to play.
Some are learning to make money. They’re initial losses are their tuition fee to
the market.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Some are patient and disciplined. Their gains are a result of them playing the
game profitably.
17. When markets are trending, place bids on the previous high once
broken above
I think this one speaks for itself.
18. In bull markets, 2 hours before the daily candle close, add to long
positions
Why? The daily close is used by traders to determine if the market is bullish or
bearish. In bull markets, whales will force the daily candle down around 2hrs
before it closes to make everyone think the price is turning bearish.
In reality, it’s generally a trick to fill their long positions.
19. Trading is not a competition with others, it’s a competition with
yourself.
At the end of the day, it is up to YOU if you make money trading.
It doesn’t matter what others are doing. YOU are the one who presses the buy or
sell button.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
20. Analyse your thoughts on the Bitcoin daily chart every day.
If you trade Bitcoin, it is best to trade in line with the HTF trend.
Everyday, you should first analyse the daily chart, and analyse where price looks
most likely to head.
- Is it bullish? Or bearish?
- Are we trending? Or ranging?
This is paramount for your profitability.
Once you have an idea on the overall trend, you can go to lower timeframes, and
enter positions in line with the thesis you just made.
21. Must-read crypto books
1.
2.
3.
4.
5.
Reminiscences of a Stock Operator
Market Wizards
The Psychology of the Stock Market
A Short History of Financial Euphoria
Trading in the Zone
22. ‘Mining death spiral’ doesn’t exist
You’re not a Bitcoiner if you don’t hear the charlatans chanting this one at least
once!
The ‘mining death spiral’ is a concept brought up pretty much every time before
we see large decreases in Bitcoin’s mining difficulty.
What is a mining death spiral?
- When the Bitcoin price crashes significantly, the same amount of miners
are now mining for a smaller share of USD denominated in the fixed
issuance of new bitcoins. Eg price drops from 14k-3k, that same 900
Bitcoins made every day are worth significantly less in USD.
- This causes miners to shut down, as the less profitable miners are no
longer making profit. This leads to a sharp drop in hash rate.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
-
-
The fear people have with this sharp drop in hashrate is in there not being
enough miners to mine blocks and thus process Bitcoin transactions. This
is related to the Bitcoin difficulty level. The more mining rigs mining
Bitcoin, the more hashing power on the network, the higher the difficulty
rises to account for this change. The difficulty level is basically how hard it
is for a mining rig to guess a significantly large hash number and ‘mine’ a
Bitcoin block to get the reward. So if the hash rate drops 20%, the same
miners must expend the same processing power to mine a Bitcoin block at
the same level of difficulty as before.
The Bitcoin difficulty will go down to account for this change, but the fear
is that this process will take to long, and we will see a pause of the Bitcoin
network, as at that overly high difficulty level it will be unprofitable for
miners to mine for Bitcoin, and thus they will shut off, leading to a pause
in the creation of new blocks.
Why is this assumption wrong?
This theory assumes that miners will shut off as soon as they are no longer
profitable, and that they have no vested interest in keeping the Bitcoin network
intact
As we have seen for the past 11 years, this hasn’t been true:
- Miners DO have a vested interest in making sure Bitcoin is able to run
smoothly, as if the Bitcoin network is to freeze, price will likely plummet,
crashing other cryptos with it, leaving their mining equipment mostly
obsolete.
- Miners also HODL significant amounts of their Bitcoin, so if they choose
to allow the network to freeze, their holdings will decrease even further in
value.
- Miners have historically continued to mine at a loss as they understand
the volatility and can hedge their income through buying puts.
- Bitcoin difficulty changes every two weeks, which is consistent enough to
avoid a mining death spiral from occurring.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
23. High fees are good for Bitcoin
High fees:
-
Contribute to security spend, and will replace the Bitcoin subsidy long
term
Price out uneconomical (wasteful) usage.
Force heavy users to optimize their block space usage
Encourage L2 buildout
24. When to use Relative Strenght Index (RSI) divergences
Generally speaking:
-
Bull and bear divergences are both good for ranging markets where price
goes sideways
Bull divs are great for bull markets
Bear divs are great for bear markets
24. ‘Alts are dead and they will never pump again’ simply means it’s
time to buy
Altcoins pump because humans are greedy.
Bitcoin leads the rally at first. It makes news headlines as it breaks old ATH’s.
People get excited but annoyed that they missed the big rally.
As humans do, we look for the ‘next big thing’.
What will that thing be? ALTCOINS.
It doesn’t matter if the coin is shit or good, as long as it seems legit to
newcomers.
Human nature hasn’t changed and likely won’t ever change.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Because of this, the cycle of ‘alts are dead they won’t pump again’ to ‘buy alts for
financial freedom, moon time!!’ will continually play out.
As a trader/investor, your goal is to identify PEAK fear and PEAK greed. It is in
these moments that the greatest opportunities present themselves.
Buy when people are chanting that alts are dead.
Sell when people are chanting about how their grandparents are now buying
shitcoins, and looking at all the islands they can buy.
25. STACK CASH, THEN INVEST SERIOUSLY.
Unless you have 5-6 figures+ in Bitcoin, your focus should be on increasing your
income.
Because you’re not going to get rich off of your $2000 Bitcoin investment.
‘B-but Bitcoin is going to $500,000!!!!, A-and moon lambo!’
No, sorry, it’s not. And even if it did, you are very likely to have gotten shaken out
of the market.
And think about it.
You spend all day looking at the Bitcoin chart, HODLing your $3000 for dear life,
and turn it into $35000
Where before you were a poor, unfit, unskilled and average person.
You’re now a *slightly* richer, unfit, unskilled and average person.
The only time I would digress from this line of thinking is if you were great at
finding small altcoins with large upside potential (20-100x+) OR if you genuinely
want to make trading a full time gig (95% fail).
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
If you don’t have 5-6 figures in Bitcoin, and you don’t wish to deep dive into
finding small alts with HUGE upside potential, focus on investing in YOU.
Whether that be:
-
A trainer to get in peak physical health
A degree, course, or online program to get a higher paying job/side hustle.
Experiences to build closer bonds with those around you
Any way you can network with those richer/smarter/more skilled than
you.
A trading algorithm showing you exactly WHERE and WHEN to buy/sell
so you don’t need to stare at charts all day.
A mentorship program to help you identify the most sound investment
approach to maximise gains in crypto
Because your purpose on this Earth is to live a life filled with love, pleasure, and
progression.
Staring at the Bitcoin chart is terrible for your mental health, and it hampers
your social life. It limits your Vitamin D intake.
And yes, I know, this is likely a controversial take.
But it is my opinion. And is a valid opinion for those who are aiming for
EXCELLENCE.
If you wish to live a normal life, with a normal job, and make a normal amount of
money from crypto, then by all means stick to staring at the charts.
But if you are like me, and want to travel the world, make amazing friends, build
businesses, become your healthiest self, etc etc, then this is the way.
STACK CASH. THEN INVEST SERIOUSLY.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
26. MUST READ Twitter Threads
1.
2.
3.
4.
5.
6.
7.
8.
9.
Bitcoin has no Intrinsic value, and that’s great
How to buy dips in bull markets
Bitcoin is a cult, fiat is a religion
How to get 0% fees on Coinbase
Counterarguments to common Bitcoin FUD
The bullish case for BTC
Bitcoin’s Security is Fine
Bitcoin is a demographic megatrend
Why we call everything a bubble
27. Bitcoin and Altcoins are largely correlated
You probably already know this one, but I will break it down anyway:
Like Bitcoin, every altcoin is largely valued based upon its network effect.
And as investors, we are trying to predict if that network effect will grow or
shrink.
So based on this thesis, we can understand how bull/bear markets are driven by
the belief that the future network effect will increase or decrease.
The majority of adoption for altcoins comes from investors who FIRST enter
through Bitcoin.
So when investors decide if they want to buy altcoins, they are basically deciding
in large “Is Bitcoin’s price going to rally, causing new investors to enter who will
buy my altcoin bags?”
Thus, this is how the Crypto money flow works:
Bitcoin ---> Majors (ETH,LTC,BCH) ---> Large caps ---> Mid caps ---> Small caps
New investors enter through Bitcoin. They then go up the risk spectrum as they
discover smaller projects.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
So basically, when you are looking to buy an altcoin (mostly for a trade), you need
to consider what Bitcoin is going to do.
- Try not to buy altcoins when Bitcoin looks like it’s going to dump
- Try not to buy altcoins when Bitcoin price is pumping (Unlikely altcoins
outperform Bitcoin until Bitcoin consolidates)
There are exceptions to this however. For example, LINK has historically always
performed better when Bitcoin retraces a big rally. It has generally been
inversely correlated to Bitcoin.
28. BTC generally generates all of its upward price performance
within 10 days of any year!!!!
Read this tweet to understand
https://twitter.com/fundstrat/status/1113163417278406656?s=20
-
This is why we HODL!
29. ‘Blockchain not Bitcoin’ is BS
That’s it. All you need to know on the topic.
30. Diversification in crypto is a myth
Diversification is a great tool for reducing risk, as you allocate your funds to
investments in different industries, instruments, and other categories.
For example, when you buy stocks you may allocate to FANG stocks, as well as
the energy industry, and also stocks which perform well in market declines
(food, consumer staples, etc) to reduce risk.
Too many investors believe this same concept works in crypto.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Truth is, it DOESN’T! (at least not yet)
99% of alts are driven by the same macro catalyst (normies entering creating
an alt season), and also act as high beta to Bitcoin’s price movements.
In an alt season (which is what investors hope for when buying alts) EVERY alt
pumps regardless of if it’s shit or good.
When 99% of alts all move relatively the same, diversification simply adds issues.
With diversification in crypto, you get:
-
Increased time you must spend checking in on investments
Increased risk if you hold these funds on different exchanges
Increased fees if you use different exchanges
No decreased risk as 99% of alts respond as high beta to BTC (positively
correlated with BTC returns)
There are however exceptions to this rule. Some coins seem to operate in their
own market cycles.
For example, LINK has historically been inversely correlated to Bitcoin
movements, and continued to make new ATH’s through the entire bear market.
So what should you do?
- For your own sake, try not to hold more than 5 positions other than
Bitcoin and Ethereum.
31. The Bitcoin market summed up in two sentences
Long term price is determined by investor activity and adoption curve. The
domain of on-chain fundamentals.
Short term price is determined by a random walk of pivots in the direction of
liquidating the most traders on BitMEX.
Thanks to Willy Woo for this one
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
32. You do not need to hold Bitcoin to be a Bitcoiner
Some of the most prominent Bitcoin supporters in fact own little to no Bitcoin.
To support Bitcoin, holding the native token is the LEAST supportive thing you
could do. Instead:
-
Contributing code
Funding/building Bitcoin startups
Narrating cohesive no-coiner counterarguments
Adding BTC as payment for your own business
Get your coworkers, friends and family involved
Are all much more valuable ways to support the Bitcoin ecosystem, and don’t
require you to hold Bitcoin.
33. Finding tops is harder than bottoms.
When finding bottoms, there is price action underneath where you can identify a
likely place for Bitcoin to bottom
When finding tops, if Bitcoin is making new ATH’s, the only resistance levels you
can really use are Fib levels and psychological resistance levels (10k,20k,50k, etc)
Selling tops is basically near impossible. Especially if Bitcoin is in a parabolic
uptrend. Focus on HODLing your position, and looking for mass euphoria, where
you can slowly DCA out of your position. ‘
34. The best coins to buy the dip on during BTC dumps are the one’s
which went down the least
Yes, this sounds like a contradictory statement, but let me explain:
Bitcoin’s price is a constant referendum on the potential success of
cryptocurrency. When BTC is tanking, the odds of crypto succeeding drop. Aka
alts have zero chance, as they piggyback off of Bitcoin’s success.
When BTC is up it’s the inverse. Alts thus require a strong BTC for this reason.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
This is a momentum style trade.
When Bitcoin is pumping, it shows a greater chance of success in gaining
adoption, which increases the success of alts seeing adoption as well.
The alts that dump the least when Bitcoin is dumping are good buys, because it
shows that they have an underlying momentum that will likely continue in the
short term.
Think about it: If BTC dumps 20% in a day, and $XYZ coin is only down 1%, there
is a REASON why it didn’t dump.
If BTC crashing couldn’t make XYZ go down, then what could?
XYZ coin went down 1% when BTC went down 20%, so imagine what it can do
when BTC is up 10% on the day.
35. Trading stocks is much easier than trading crypto
Trading shitcoins on a low timeframe is actually very difficult.
-
You are very likely to get stopped out.
Price is very volatile
You have to also watch what Bitcoin is doing incase it dumps
Stocks on the other hand trend incredibly well.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Let’s look at an example:
STOCKS- Apple
-
Trend really nicely. When price goes up, it goes up slowly with little to no
dips. Same happens when the price goes down.
Price trends UP over time, as it is supported by: The FED, USD inflation,
growing population, innovations in efficiency
Bullish continuation patterns (IH&S, Bull flag, etc) have a much higher %
chance of working
CRYPTO - Verge ($XVG)
-
As you can see, price moves all over the place. Big wicks which make you
get stopped out of your position. Price breaking critical levels then
pumping back above weeks later.
Crypto prices trend DOWN over time as token treasuries are constantly
liquidated which act as immense downward pressure on price.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
-
New coins are also constantly being created which leads to inflation as
new investors have more choice in what to buy.
The valuation framework of altcoins is largely unknown, which is thus
why price is so random and unorthodox.
35. Some coins are correlated, and you should use this to your
advantage
For example:
- When XRP pumps, XLM pumps shortly after
- When XMR pumps, BTC pumps shortly after
- When BTC dumps, LINK pumps
- ICX, AION and WAN typically move in tandem
Plus many more which you will come to discover
36. The earlier a breakout from a consolidation pattern (bull flag,
ascending triangle, etc) the more strength it has
If a coin spends more than 70-75% of its time in the consolidation pattern, it
shows a weakness in the trend to move in a decisive fashion
When you look at the chart, you will see plenty of wicks showing failed
breakouts
You must ask yourself 'why did these breakouts all fail?'
If the trend was strong, buyers would not get lots of easy long entries, and
instead they would be forced to chase price as it rallies out of the consolidation
pattern
This is why trading shitcoins is generally annoying
Everyone wants 'alt season' and thus they look for longs, but the truth is alts
spend most of their time going down/sideways. Thus, those bullish consolidation
patterns don't work out 90% of the time, as the general trend is not in your
favour.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
37.consolidation patterns get super tight in the consolidation zone, and 90% of
the time fail.
37. HODL isn’t a meme
HODL was the best investment strategy during the last bull market from
2015-2017
HODL was a meme for the bear market of 2018-2020
HODL will likely not be a meme for the bull market of 2020-2022
You must realise that different investment strategies work well in different
stages of a market cycle
As mentioned in a previous lesson, most Bitcoin gains occur in only 10 days of
any given year. This is why we HODL, because if you are out of the market at the
wrong time, you will miss these big gains.
However with that being said, during bear markets, the worst thing you could do
is HODL.
So how do you know when to HODL and when to not HODL?
It’s really simple:
1. Put this trading tool on your chart and go to the 1D timeframe
2. Buy when it goes green and HODL
3. Sell when it goes red and don’t HODL
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
As seen on the chart above, this strategy allowed you to:
- Buy at $250
- Sell at $11200
- Buy at $5000
- Sell at $10000
- And do a few smaller swing trades between then and now
38. Ways to determine if Bitcoin is in a bull market
1. Moving averages, eg price is > 200DMA or 50DMA > 200DMA
2. Price relative to key levels, e.g above X. (Eg for Bitcoin, when we were at
$3000 in 2019, most people agreed that when Bitcoin broke above $6000
we were back in a bull market)
3. Price rise over x time
However, keep in mind there is no single accepted way to determine if an asset is
in a bull market.
39. Low US interest rates are good for Bitcoin
Interest rates lower for longer/higher lending is not bullish crypto because
“bankers are printing money”
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Low interest rates are theoretically bullish crypto as low rates and ample
liquidity push investors to chase yield and move out the risk curve (go into
riskier investments to generate returns).
40. Try not to store your coins on exchanges
As they say, “Not your keys, not your coins”.
-
In total, $292,665,886 worth of cryptocurrency and 510,000 user logins
were stolen from crypto exchanges in 2019.
I personally had a small amount of BTC lost in the Cryptopia hack.
So yes, the danger of exchange hacks are very real.
For exchanges like Binance, the risk of losing your funds is very very minimal.
They are an incredibly legit and trustworthy exchange.
But the same can’t be said for smaller exchanges. With crypto, it’s better to be
safe than sorry.
41. Moat = value accrual
The best crypto investments are those projects who can create a moat
A great example of a project creating a moat is $YFI. The project has done
several partnerships/mergers with other crypto related projects.
For example, they recently partnered with Cream Protocol, and merged with
Pickle Finance.
This is crucial for yield farming projects in particular. As we have seen in the
past few months, with the rise of projects like $SUSHI, the yield farming TVL
(Total value locked) can fluctuate rapidly between projects depending on where
the yields are best.
Why are moat’s important?
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Due to crypto being a generally open, permissionless and borderless
technological innovation, it is quite easy for copycat projects to come along and
steal market share from its competitors.
At one stage, Tether was basically the entire stablecoin market.
Then competitors came along, and slowly ate away at that dominance.
These competitors were only slightly different, mostly specialising in being
more regulated.
But because of Tether’s network effect, brand trust and immense
exchange trading pair integration, it was able to create a moat.
So when you’re looking at the next crypto projects, you must realise there is
immense competition, and thus carefully assess if they will have the ability to
gain network effect/a moat over its competitors.
42. You won’t fully understand Bitcoin until you’ve been through an
entire market cycle
The beauty of Bitcoin is you can experience a full market cycle in 3-4yrs, whereas
it may take 10+ years in the stock market.
To fully grasp how Bitcoin price action trades, you need to have experienced a
full market cycle.
Why?
-
Bitcoin has a very specific and unique price movement depending on the
stage in the market cycle.
It will give you an understanding of why bull/bear patterns work
better/worse in certain market conditions
You won’t face the same emotional baggage in deciding where to buy/sell
You will begin to see recurring patterns in price action, sentiment, etc and
more easily determine when to buy and sell.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
Conclusion
If you’ve read this far, I GUARANTEE you have just increased your profits for the
next bull run immensely.
You have done yourself a major favour, so congrats.
In summary:
- Focus on HTF
- You won’t trade profitably for the first 2-3 years.
- Stack cash, then invest
- Most alts are scams
- Be careful who you follow
Your next steps
So you’re probably sitting there super excited, motivated, pumped up, slightly
confused, overwhelmed with information, and much more!
Well take it from me, to learn all of this I was once in your shoes.
And what I wish I knew when I started was the value of surrounding myself
with smarter people to maximise the profits I can make from crypto.
And for most of you reading this, you probably don’t have connections to those
who can help you in such a way.
Well, that’s why I’m here.
I run a small and exclusive trading/investing room where I teach everyone inside
exactly how we’re going to maximise our profits from the 2021 bull run.
A real, day-by-day implementation of the lessons taught in this book.
But only open for a limited number of people.
You buy coins in the hope that they rise 10x in price.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom
So why wouldn’t you invest in yourself to allow you to make 10x more from this
bullrun?
If you truly are ready to take your investing to the next level, and create the
future YOU want to live, then I’ll hear from you soon.
You also NEED to get inside my free telegram community.
I post trading and investing ideas, run regular livestreams to teach crypto
related topics, as well as host giveaways.
If you have any questions or simply want to get in contact, either message me
here or Email me at danmc1@protonmail.com
Thankyou for reading this far, and I wish you all the best in your endeavours to
financial freedom.
-CryptoDan.
Twitter.com/cryptodan19
Dan’s Trading Room: https://t.me/danstradingroom