Maybe you have heard about this:
(1+1%) ^ 365 = 37.78
(1-1%) ^ 365 = 0.0255
It basically says that if you improve by just 1%, but consistently across the next one year, you will end up with reaping 37x of benefit.
Conversely, if you laze / procrastinate / lose / reduce / forget by just 1% everyday across the year, you will end up with just 2.55% left.
I decided to apply this to myself, more on the gains side. Here are some new resolutions that I have tied up to this principle and quantified them
Crypto
I have been in the crypto trading space since 2017 March (yes before that major bull market). I have seen enough ups and downs and I also realize my weakness to be easily swayed by market sentiments, news and self-doubt. These are the usual traders’ bane and I’ve been looking for ways to improve, until I found a trading automation tool 3Commas.
The market is in constant flux and daily +- 10% in the crypto space is nothing. However for a trader, such fluctuation is a blessing - if you know how to reap the benefits and stay off greed.
How to remain rational? Determine a trading rule and stick to it. Never be affected by mood swings or FUDs. In fact when market swings, take advantage of it. FUDs can allow you to buy cheaper and when the sky clears, you are loaded and ready to rocket.
Good strategies are simple to explain. So here it is: every trade has 3 components: (1) start the trade. (2) load the bags when needed. (3) close the trade. Your profit = closing amount - starting amount.
It really is this simple.
1. Start the trade. The starting point is important but not the most important (you will know why later). It marks the first order you will buy and if you are long (expecting the price to increase), the earlier this signal comes, the better. For a simple trade, I use TradingView’s crypto screener to receive a signal.
2. Load the bags (and digest the pullbacks). This is in fact the most important step. Starting right doesn’t mean it is a smooth journey towards profit. There is always ups and downs and here is how a good trader will add-on to his bag. For every x% of price drop, keep adding to your bag. For me, I normally keep adding till price drop of 10-15% (there are exceptions though, as I learned along the way and tweaked my strategy, will talk about this in future posts).
3. Close the trade. Now your bags are loaded and you are ready to go. Yes the green bars are exciting but we should always remain cool minded. The coolest of all is math. So I just set a profit % target and once it is hit, I close the trade. I’m most certainly sure that I won’t hit the peak of top price, but how many actually can? Comparing missing the top price but able to pocket the actual profit versus missing the top price and getting into dilemmas between holding and selling, I choose the simple way of closing the trade automatically.
So this is how I used a combination of TradingView, Binance exchange and 3Commas to automate my crypto trading for the past 5 months. I have been getting on average 0.21% daily growth of my total portfolio.
It is not even 1% yet, but (1+0.21%) ^ 365 = 2.15
Fully automated and the portfolio grows 2x in one year. I say it is a good deal.
I will talk a bit more details about my trading flow in future posts when opportunities arise. I am constantly tweaking and improving my game plan when the need arises.
——————————————
My main tools to automate this trade:
TradingView’s Crypto Screen