My plans for cryptocurrency trading in 2018

Crypto currency trading in 2018I mentioned in the December update post that I had spent some time over Christmas reading up on cryptocurrency trading, particularly short term day trading.

The main resources I used were:

Quickfingers Luc Cryptocurrency trading YouTube channel

 

What have I done so far?

I took the plunge last weekend and signed up for a Coinbase account. I only want to get a feel for how everything works this month so I spent a whopping total of £100 buying Ethereum and then then signed up for a GDAX exchange account and transferred the Etheruem into there. After a few days I sold the Ethereum at a higher price and made 11% profit.

My next trade was a day trade yesterday (Ethereum again) but I lost about 3% because I was holding out for a higher profit (I could have sold at 2%) but then the price rebounded and I put a stop limit in at 3% loss. I did another trade the same day on Ethereum and made a 2% profit; I could have made more but the price was fluctuating so I set a stop limit at 2% profit.

Only 2% profit!

Some of you might be thinking why am I only aiming for 2% profit. I’m basically following the strategy from John Omar where he talks about the compound effect of making 1% profit per day on an initial $/£1,00o investment. Looking at it very simplistically, if you started with a £1,000 initial investment and made 2% every day (my goal) o £1000+ trade, after the first month you would have made £794 profit and then by the end of the second month you would have made £1,455 profit that month. It’s a very simplistic way of looking at it and des not include losses, etc. but hopefully you can see how the small gains add up.

My strategy

My plan for dealing in cryptocurrency is the following:

  • Start with a 1-2 week test (completed by 21 January latest) to get a better understanding of the ETH/BTC markets, the exchanges and technical analysis. This will also allow me to test my trading strategy before investing larger sums of money. I need to earn 10% minimum profit by the end of this period in order to go-ahead and scale into larger sums of money.
  • Adopt a day trading approach (3-5 hour trades) aiming to make 2% minimum profit on each trade
  • Cash will initially be transferred into Coinbase to buy ETH/BTC coins at a low price. I’ll be moving some funds from my match betting accounts to facilitate this.
  • Initial deal in Ethereum and Bitcoin (in Euro) on the GDAX exchange. I’m sticking with these two coins to start with so I can closely follow and understand their charts.
  • Any profit above 2% will be held in ETH/BTC and either kept in these coins or I’ll use these to day trade in alt coins on the Binance exchange.
  • I’ll follow “Quickfingers Luc’s” approach of looking for breakouts from a base and buying at this lower price. I’ll monitor the ETH/BTC charts for a few more days so I get a better understanding.
  • I make use of Coinigy’s price alerts and use the limit features when buying/selling on GDAX. I look to make no more than a 2% loss and as the price rise I will increase my stop limit to lock in more profit.

The aim of this post is not to give any detailed guidance on crypto trading, just some basic details of what I plan to do. As always, please leave any comments or questions below.

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2 comments
Matthew Allen says January 10, 2018

Nice strategy Stu! I never even thought about the compounding effect of taking out daily small profits. Although, as you know, you won’t always profit daily and you may have to wait a few days (or even longer) before you can sell a coin at a profit…

Personally – I’m sticking with more of a buy and hold strategy overall – with a little bit of day-trading thrown in there. For my smaller day-trading alt coins – I’m buying right after they take a dip, then setting a conditional limit sell for sometime in the future after the coin 4x or 5x’s it’s value. I’m really bullish on all of the cryptos as we move into 2018! I think they’ll ALL go up eventually – so I’m holding on.

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Stew says January 10, 2018

Thanks for the comment Matt! Nice to get somebody else’s approach.

It seems like the best approach is the “hybrid” one like yours where you make good gains on day trading but also building up your holding of the main coins. Quickfingers Luc talks about holding any day trading profit in coins and aim to build up your balance of “free” (generated from profit) coins.

My plan (not done yet), is to hold any profit above 2% in the coins but I’ll have to see how that works out over the next week or so.

Thanks, Stew

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