BEST Crypto Trading Strategy Could 10x Your Portfolio
https://www.youtube.com/watch?v=DjTCy8quF-U
Transcript:
Making a 10X on your invested capital is actually pretty straightforward. The problem comes when we want to make that 10X within a very low timeframe. That’s when we have to get way more tactical. We have to time the market a little bit more. We maybe have to take some leverage. In this video, I’m gonna show you a very simple strategy.
You can relate this to Bitcoin, to altcoins, to S&P index, to Nasdaq index, to individual stocks, whatever. I’m just gonna show you this very simple technique of actually identifying what is the trend rate of growth of the asset and how does it trade in cycles and how can I take advantage you can use this over the short term if you want to trade take a bit more risk or over the longer term if you can wait a little bit more you can just work out how long is it going to take how much do I need invested etc so I’ll show exactly this in this video The first thing that I want to go over is how to chart the asset and
then try to figure out its price cycles. So the first thing, go to TradingView. This is completely free if you don’t have TradingView yet. So I’ll link them below. Just sign up with an email address. I’m going to go to Bitcoin here and just show you because Bitcoin is extremely cyclical and it has a lot of growth.
But you can use this on any asset that you want go to indicators I’m using the Haken Ashi RSI oscillator this is a price momentum indicator so there are many out there and you can use them they all show exactly the same thing I want to find out right because what we’re seeing here is this asset essentially is just going up okay so it’s going up in. So I’ve got an asset here that has a trend rate of growth valued in fiat currency. So it’s going up over, you know, let’s say a four-year period at a certain percent, right? But obviously, if I want to make returns over a shorter time period, I need to time those price cycles a little bit more effectively.
That’s what a momentum oscillator shows us. It shows us where the price is too expensive or too cheap in relation to its longer term trend. And that is the sweet spot for trading and how to make returns. So you need to pick an asset that actually has a trend rate of growth that is reliable that you can invest in.
That’s the first thing, because there are many assets that go up a lot in very short periods of time. Altcoins coins right they got 5 10 x 15 x within a few months or maybe a year or so but if it doesn’t have a trend rate of growth you’re taking extreme risks and having to get in and out and you actually have to be correct over a very short period of time whereas if you have a asset with a trend rate then you can actually get things wrong and you still have the ability to actually make money on that trade by waiting out the market and waiting for that trend rate of growth to pick up. So it depends where you
want to sit on this. You can go super risky, you can go super non-risky, right? It’s up to you. So this is a technique and you can just apply it to anything. What we need to find out, and this is very clear for Bitcoin, is that it has very individual and very distinct price cycles within its longer term trend.
You can see this with momentum, right? So bearish momentum to the downside, bearish momentum to the downside, bearish momentum to the downside. These are the bear markets for Bitcoin price, right? Very difficult to trade there. But you can also see that this momentum indicator very clearly shows us where that bearish momentum essentially bottoms out and starts to go into bullish momentum again and here right it actually had a second dip here but this was a pandemic so a little bit of an outlier and then here we have again so you can
use a momentum indicator to essentially show you there’s actually, let’s say, four opportunities here where the asset and its trend rate, the price is very low in relation to that. That’s four opportunities to make the most returns out of the asset, right? Because it’s growing at a trend rate and it has price cycles where the price is oversold where you can see me here and the price is also overbought you can see these here not quite overbought yet but you can see it coming up right so that is how you can time markets more by seeing the trend rate and then
the price cycles within that so do that for the nasdaq index do index do that for tesla stock or anything else you can just find the trend rate of the assetdaq index, do that for Tesla stock or anything else. You can just find the trend rate of the asset and then the price cycles that we can time if you want to time more.
Firstly though, I just want to go over the longer term way of actually thinking, well, how long will it take to make a 10x? I’ll leave all of these resources below because you need to figure out what the trend rate of growth of the asset is. And then that’s going to give you a time horizon. And then you can figure out, am I okay to wait? do i want to be a bit more tactical so firstly what i’ve done here has gone to grok and i’ve just said i’ve got an asset here and it’s going up 25 as a cag r cag r is compound
annual growth rate you may have heard it as arr which is annual rate of return right trend rate of growth is another one essentially you can’t uh you can’t learn that about an asset over one year you have to take at least a four year period right so four four year or five year compound of growth is another one. Essentially, you can’t learn that about an asset over one year.
You have to take at least a four-year period, right? So four-year or five-year compound annual growth rate. What is that over time? So the S&P index is about 12%. The NASDAQ index is about 18%. Bitcoin right now is about 40%, right? And so you can just work it out now for 25 annual rate of return that’s a 10 year wait time now for the nasdaq for the s&p at 12 12 you’re probably looking at 20 years right so not great right do you want to wait 20 years probably not so where you like find yourself on that risk scale
is up to you right for bitcoin at a 40 percent uh kagar probably coming down a bit you’re probably looking at six eight years something like that depending on cycles and where exactly you buy there right so even less time um for assets that are faster than that maybe even less time but then you know what’s the risk i’ll link this below as well this shows you the kagar of bitcoin you can work this out for ethereum and some other assets as well but again it’s not just about the kagar it’s about getting an asset that you know, you know, has that longevity over
a decade, right? You need that first, because if you get trades wrong, right, if you get a trade wrong in an asset, and you lose 50%, you’re like exponentially further away from making 10x in your portfolio. So the main thing is getting that sweet spot of something that moves pretty volatile. But also you think now this is solid, it’s gonna be around in 10 years because if i get the trade wrong now i can wait and still make money and that’s important because you can wait then you can put more in at a lower price super important
to be able to do that and have the confidence to do that and a lot of all coins they go up then they go down you think i don’t want to touch it which is you know not the best position to be in so look up kagar and work out what the kagar of your asset is. You can go to Grok or anything and you work out how long that will take.
Eight years in investing is not a long time to make a 10X on your money. Just getting into the asset. So that’s the first thing. Work out if you can wait and try to build a portfolio around that first because you don’t wanna always be trading trying to time the market. You wanna be in with a portfolio that you can rely on of quality assets.
And you’re like, wait, eight to 10 years to make a 10X? Sure, I’ll do that. And then that gives you the strength once you have that, once you’re four years in or eight years in, and you’ve already made that 10X, then you can go ahead and trade short term and time the market more because you don’t have fear anymore.
And that means you can buy these dips, which everyone else capitulates in. You can buy these because you’re like, I’ve already made 10x. I’m going to go in now. I know this asset is strong. Even if I’m off by 20, 30, 40% on my buy, I think it’s going up again. I can wait. So you have the strength there first. So figure out what your mix is.
Is it S&P? Is it Nasdaq? Is it Bitcoin? Is it something else? Figure out your mix. Figure out how long that will take. Have that in your mind, right? And then have that first. And then over time, as you start to make returns, you become a much better trader because you don’t have that fear, that FOMO and everything else that everyone has. So that’s the first thing to do.
Now to come into more tactical trading or trading over shorter periods of time, we want to reduce the amount of time you make that 10x. And so again, it’s actually the same thing.
You need to find an asset with growth that you can invest in and that you think that will bounce from uh up from pullbacks within an uptrend so this is the longer term version of doing that which i think is the basis for any portfolio right investing in strong assets and investing a lot when the price is relatively weak in relation to the trend that’s what short term trading is as well you have an uptrend here it’s just a bull market it’s an uptrend and there are times where the price gets very overbought or very, very high in relation to that trend.
And then it does come down and pull back into that trend as well. So you need to just try and find areas where you can find these pullbacks in the trend. You can do this with dollar cost averaging. You just buy every week. You’re going to be buying some high, some low, it doesn’t matter. The assets going up at 40% a year doesn’t really matter, right? But for trading, how people will do this is they trade short-term and they trade with leverage. That’s the only way you actually reduce the time horizon
where you make those returns, because you need to get more out of the market than you have invested. That leverage and that day trading also increases risk substantially, which is why I think beginners, you know, just shouldn’t be doing this, right? You should just get that investment portfolio first.
But I’ll show you how this is done and then the risks as well. So the first thing is, why have I got these orange dots here? It’s not because of the price. It’s because of the momentum. By the way, I trade on Bybit. So I’ll leave them below. Up to $30,000 as a deposit bonus if you’re a new user. You can just click the link below and see that.
Whatever you deposit, you’ll get some sort of bonus. That’s not available for everyone, so I’ll leave some other links to exchanges you may need to trade on. Also, Apex is Bybit’s decentralized exchange. If you’re into crypto, you can just connect your wallet and trade from here. So you can trade futures and spot on here as well.
Super good. There’s a permanent fee discount by that link as well in the description. So we need to find out uptrend and the momentum of price. You can do that with oscillators like I showed you on TradingView, but those are super noisy and I don’t think they really show us much over short periods of time. What you can look at is on-chain data.
So this is SOPA, short-term holder SOPA, and it shows us during uptrends, which is very clear, it’s very clearly an uptrend here. So we have a bear market where SOPR is super negative and it’s actually rejecting, right? You can see rejecting from this level. Then we switch. And this is when the Heiken-Ashi chart showed that the momentum has switched.
And we also see that SOPR is now essentially in the green and using this as a support level. So during an uptrend, we want to trade drawdowns. green and using this as a support level. So during an uptrend, we want to trade drawdowns. So these areas here just show you the drawdowns perfectly. One, two, three, and then four, five, six. And there’s one here as well. So basically seven opportunities to just buy drawdowns with an uptrend.
Now, if you’re trading in the spot market, like I said, it’s no different to dollar cost averaging. You’ll be buying pretty much around there anyway. Just putting your investment in your portfolio and growing your portfolio and that’s great, right? And you’re making great returns and as long as the asset grows. For trading, to time that, right, and actually make returns, then you’re gonna be needing to increase the amount of money that you’re trading with because otherwise it’s just the same as dollar cost averaging and that means you need to take leverage.
We can also see here with Glassnode, which I’ll link below, the potential drawdown in bull markets. 20% to 30% in this bull market. Same here, 20% to 30% drawdowns. And then here was actually a bit more, a couple of 50% drawdowns. And that shows you the risk of trading. If you’re buying an asset that you think has long-term growth, then you buy these drawdowns, you get drawn down some more, you don’t care, you wait.
You can see that during an uptrend, essentially you get a drawdown, then you go back up to an all-time high, right? That’s what you’re trying to trade. Draw down within an uptrend, back to an all-time high. You’re trying to time those. The reason why you don’t buy peaks is because when you’re trading with leverage, when you buy a top, that can easily draw down 30%.
Now, when you’re taking leverage, 30% turns into 50 or 60% drawdowns, and that’s when you start getting liquidated on your trades. So that’s where the risk comes in. So I’ll show you how to do this. But essentially, if you’re dollar cost averaging, you just buy these drawdowns. If they draw down more, you buy some more with your income, right? But what we need to find out is if we’re trading with leverage, how that works.
So what is leverage? So I’m using 2x leverage on Bybit here. You can see that 2x. Essentially, what this means is you go in with $1,000. 2x leverage means you can trade with $2,000 in the market. The reason why the exchange lets you do that is because you have $1,000 of cash there to pay for the loss if it happens so with 2x leverage my thousand dollars is now two thousand dollars in the market if the price goes up 50 that’s actually a hundred percent on my invested capital i’ve got a thousand dollars of cash in there i’ve got two thousand
dollar trade because up 50 now worth three thousand which is a thousand dollar profit on my thousand dollar invested so 50 move turns to 100 move The unfortunate thing on downside as well is that if you’re in a 50% move turns into a 100% move on your original capital. So if $2,000 invested goes down 50%, that’s a thousand dollar loss on your invested capital.
That’s a thousand dollars lost, which is a hundred percent of your original capital. So that’s where leverage can make wins and losses much more. That’s why you can’t use that as a long-term strategy. It can only be used short term with specific parameters. So I know that average drawdown maybe 20 to 30%. So what I’ll do is go to the chart here and say a 20% drawdown is somewhere where I want to go in and buy and if I’m dollar cost averaging in my investment portfolio, then I’m just buying and putting in there, getting a decent price.
If you’re trading, you have to be much more tactical and say, okay, 20% drawdown, but it could go down 50%, which is this right here. So if I’m getting in at this level and I’m using 2x leverage, my trade can have this breathing room. So if I get in here with 2x leverage, the price can actually move from here all the way down to here before I get liquidated on my $1,000. And the exchange says, you haven’t got any money to pay for the loss.
And so we’re selling out your trade and taking $1,000 back to pay for the loss, right? So that’s how far the trade can move. Now, if you’re using 3x leverage, that’s a 30% or 33.3% move until you get stopped out of your trade, which means here to, you know, somewhere around here. So you have less breathing room to be wrong.
If you’re using even more leverage, 10x leverage means basically this move wipes out the original invested capital that you have, right? So the more leverage you take, you basically can’t be wrong with 10x leverage, right? It’s basically a bet at that point. And that’s not really investing or trading, right? You’re just betting, right? Basically, the price will not go down at all from here.
It’s basically like, you know, put your money in betting, right? You can’t do that. So 2x leverage, I’d say, is probably the max, two, two and a half leverage, right? And that gives you some breathing room in the trade to say during a bull market, the odds are that if I get in at a 20% drawdown, the odds of getting drawn down from there, another 50% are fairly low.
And so if I have maybe seven or eight opportunities to do that in a bull market, maybe five or six of them would be pretty good trades. And so what I can do is take leverage on that. And that means that on the upside, if we do get a 20, 30, 40% move, like if we went in here and I’ll just go at this point right here, and then we came in for a 50% move, that’s like 100% move to X leverage, right right that is how you increase the amount of returns that you make by trading within cycles then you put that back into your investment bags because the assets still growing over time maybe you want to trade out the
cycle where do you trade out we trade out the top of cycles right and that’s pretty clear you can see when the momentum changes when the momentum changes right not really here right now but when the momentum changes you don’t Not really here right now, but when the momentum changes, you don’t want to be taking positions up here.
You don’t want to be long in any trading positions. If you’re an investor, I think you just kind of wait a bit, right? Wait four years, wait eight years, you’ll make 10x on your money. If the price draws down like 50%, does it matter? It’s going to go up again in the next one. So that trading, trading can increase returns in cycles. But for most people, that extra risk is maybe not worth it.
That’s up to you, but that’s how it works. That’s how you can try to essentially make a 10X with very low risk and waiting a long time or taking higher risk and volatility, waiting a short time, and then day trading leverage is like the highest risk. The risk of loss is more.
You definitely don’t want to be losing anything because then if you lose money then you’re exponentially further away from actually making that 10x but just choose your assets what you want to trade how you want to trade them everyone can take this strategy and implement it in whatever way that they want with the assets that they want
