On Crypto Currency Trading
A noob leaps in where not angels but even fools fear to tread
So… thanks to Adam, I have now entered the realm of crypto-currency trading (in a minuscule fashion) and as an obvious noob at this, I am not going to tell you that the tip he gave me (good tip from a “guy” he knows) is based on any solid fundamentals, because that is literally ALL I know. it’s a tip from a guy. But so far, in a day I have doubled my money, and so far, as far as I can tell, after having taken the original investment back out, so I have no loss even if the bubble pops, it shows every sign of simply carrying on to be a very good buy.
Yes I will tell you what it is in a few paragraphs, and I will even give you my analysis. You may laugh, but even if I am new at Crypto-Trading, I am not new at shares trading. And there are enough similarities that at least some of the important fundamentals carry across, and they are, in my considered opinion, the most important fundamentals. Some things can be learnt. The concepts I will discuss now can be understood, but whether you are able to actually use it in the field is another story.
It’s a bit like teaching you how a rifle works. Anyone can learn that in theory. Using it while in combat is an entirely different thing. And to carry on with the analogy, I am right now, the equivalent of a man from 1888, armed with a lever action Winchester and an 1851 Colt Navy converted to use brass ammunition that is deposited in a modern warfare in say, the Ukraine. It is absolutely true that there are things I can hardly grasp that could wipe me out immediately (drones and jets with bombs and so on) and that my “firepower” is extremely limited and that also reduced to pretty close quarters only. But… If I have the experiences of the Civil War with me and have been a bounty-hunter for decades, I can assure you that my fundamentals of fighting the enemy will be well-above the best of newly trained recruits. So… while you should not use my advice in terms of necessarily what to buy (I am only looking at mostly one token and one crypto), I hope you pay attention to the things I discuss, because they may well be extremely important for you to understand and may impact your trading style very much, and almost certainly in a positive fashion only.
So here goes.
The most important thing about trading is that you need to understand the following:
The fundamentals behind any crypto you are buying. What is it? What is the story of why it was created? Who (if possible to know) created it? Which niche is it satisfying if any? In dealing in shares this would be the fundamentals of the company in whose shares you are investing. What does it do? What has its performance been like, is it under/over valued? What are the assets? Are the political insider trading scams in place you can surmise? and on and on and on. We can consider this the map of the territory. The more accurate (based on reality) the better, but never forget that a map is just a map. It is always bound to have some discrepancies with reality, especially since the “terrain” in crypto can change in seconds. But the less unknowns and illusions you have in it the better. My knowledge here currently is ZERO. So keep that in mind if you decide t take any advice I may give, or that you THINK I am giving. Because I am just sharing my views, the only person that can make financial decisions in your life, is you. And only you. I have zero responsibility if you go broke because you went along with my ideas. Never forget that. And I just told you that on the fundamentals of the crypto I own and even crypto in general, I know, absolutely NOTHING. Read on to see why I am still not quite a monkey throwing a dart at a board with various crypto on it.
The general and detailed principles and specifics of HOW to buy/sell, stake, and transfer crypto and cash. This can all be learnt but the learning curve can be steep and in my view, it never really ends. To stay relevant you need to understand a lot of the mechanics well and keep yourself update with them. My knowledge here is I would estimate at 10-15%. It’s hard to say how much I don’t know, because I really don’t know so much it’s hard to know what the range is. So… am I inspiring confidence in you yet? If I were a pilot on a plane, so far I told you I have zero knowledge of where we are going or how to get there or what any of the terrain looks like between here and there, all I know is “there” is supposed to be awesome, and some guy told a guy I know that this “paradise” is somewhere out there to the West. Oh, also I barely know what an engine is, never mind fix one, and if the plane stalls in the air I have no idea of how to restart it.
The tactics of both automated buy/sell options as well as an understanding of human behaviour. Even if I don’t know the map, or how the engine works, I actually AM a decent enough pilot. This means I can read trends and see patterns in the chaos quite a bit better than average and even better than some professionals. But these are tactics, and while you can win a lot of battles with good tactics, if you don’t understand the overall strategy (of the crypto in question) in the long term, you are liable to lose almost every single time. And this is no different. I can show you how I think and why I buy and sell when I do and the overall “strategy” I use to do this, but all of these things are just TACTIC-level behaviour; and worse, it is NOT informed by any STRATEGIC-level information. So it is tactics operating in an information vacuum. Using the analogy of war, I may be a good commander of a special ops unit and we may well win several battles against the enemy. Only to discover that our successful attacks have diverted a large portion of the enemy army towards us and that has global implications for our people.
Control of your emotions. In trading money, emotions are almost inevitable for 99.99% of the population and the 0.001% that genuinely does not have emotions about it are people either so rich they don’t care about money at all, or insane. That said, there is a type of person that has emotions of a different type from most. if you are one of these, you are more likely to do well, all other things being equal. Allow me to quote from a recent chat with a good friend that would like me to invest for him, even though I am not comfortable with investing for him, because I might be completely wrong and then what? He loses all his money and I just say “Eh, bad luck, buddy!” Nevertheless our conversation in this respect was interesting, so here it is.
1. I have zero knowledge of the fundamentals of LOTTLE. All I have is Adam saying “psssst a guy I know says bet on this black horse!”
2. I am applying tactical patterns to the graphs, but I have no understanding or even idea about the overall strategy. What backs LOTTLE? Who created it? Why? How do you come to know of it? Etc etc etc, which means it could be the miraculous thing that makes us millionaires or it could be total vapourware that bubbles then pops like so many of these things (the vast majority.)
3. What is the risk/reward analysis?
IF I had left the whole thing ride from start to now and taken nothing out I would now have approximately
$530 or so from an initial $200 in. Which is ~2.5 times the original total (commissions etc needs to be accounted for in getting it back out).
Now I have $311 in there and $150 or so safe out of it and back in cash in the app, not in any crypto. So the “loss” is about $70 or so, but we have secured almost 75% of the initial amount already.
So… the smart play is what I am doing here (that is, take to the initial investment as soon as you can) even if emotionally we all “feel” as if we are “missing out” by not making even more.
The token we are buying into is called LOTTLE and you need to register at pump.fun to be able to buy it. Once you registered and created a profile with a digital wallet in pump.fun you need to put some SOL (Solana is the coin) into it, because you can only buy LOTTLE with SOL. Then you buy LOTTLE and hopefully see it spike up as it has since it was created 5 days ago.
I only got in it 2 days ago and I have now got (between cash and LOTTLE) just over $600 in it with an initial start of $200. Of course, I am not advising you to do this. it’s what I did. You need to figure stuff out on your own.
You will also need to register with something like COINBASE or some crypto-exchange that lets you buy various crypto for cash. Make sure you can buy SOLANA as that is the only way to buy LOTTLE. Once you have some SOL send it to your crypto-wallet in pump.fun and then do a search for LOTTLE and press the trade button and buy/sell some LOTTLE using SOL. Or don’t. It’s what I did and it went from a market cap of $1 million to $5 million in 2 days. So I think for a few days at least there is likely to be a gold rush.
The Kurgan Principles of Crypto-Trading
Now for my Advanced Noob Analysis Ted-Talk Equivament — ANA for short, which is just one letter away from ANAL, which is what happens without lube to almost all “traders” who think they are smart as a whip because they made some money.
First principle: Just because I made some money in my 20s trading shares doesn’t mean I am a trader. Long personal story follows to explain this. Skip is you don’t care. There is a TL;DR at end of this point too if you prefer.
I dropped out of it because as a 24 year old I figured out it was a giant Ponzi scheme and would collapse soon (in 5 years) and it was a morally corrupt system. Today, 30 plus years later and a lot of scars later, I realise that my best skill is using the devil’s own tools against him, and I have had some success in this. With women… “No one can find pure virgins that aren’t sluts anymore!” cries the pious man. He’s basically right, but the way to change things is to bang a “slut” (not necessarily, but a woman that is generally caught up in the modern zeitgeist of today would probably be considered a vicious whore back at the start of the 1900s when there was still some semblance of Catholic morality) so well and hard she falls in “love” (because after three hard orgasms in a row before she can draw breath cause hormones) and then re-direct her towards the light. Preferably after having asked her name and how many children she envisions. Over time, her feminist nonsense will leak out of her ears and she will naturally begin to see all the benefits of being a woman that uses her natural abilities and “powers” instead of trying to be a weak man with tits competing for the leading role in the relationship. This is the same. Is trading in crypto and shares essentially morally bankrupt? Yes. The activity is literally creating fortunes (and misery) out of a shared absolute fiction that is fiat money and digital numbers on a screen that are not related to anything real or even tangible. And yet… empires and millions of lives are made and broken on this total fiction. Your morality, your honour, your word, mean very little when faced with the tsunami of greed and hope and despair that money itself, the absurdity of FIAT money creates in human beings. So… what to do? I have avoided embroiling myself in anything heavily linked to financial success because for one I find it relatively boring and soulless work (because it is both) and for another because I only wanted enough to get by doing what I wanted to do more or less at will, which for the most part was being left alone. Now I have children and while I am still far better off than most for what I predict is coming in the next decade or two or three, I am very very far from where I would like to be for the future of my children. So… if I can find a way to play the money game without leaving my castle for the most part, and if I can do so and actually make enough, what I will do with the money is going to absolutely be for the good. Not just of me but of my children and my friends near and far too. All that to say this:
TL;DR - Whatever your reason for not doing this before or for doing it now, or whether you made money at it already or not, the first principle is to simply NOT assume anything about your ability. Be as brutally objective as you can be.
This was humorously discussed with the wife, which I hope renders the sense of things I mean about keeping humble.
Me: Ok babe, I doubled the money, so now I’m a day-trader! I’ll be snorting cocaine and hiring hookers all the time now!
Wife: Umm… I think for that sort of behaviour to be excused I need to be a properly kept woman.
Me: Wait… so you are saying I should hold off on the hookers and coke until your lifestyle is where you want it to be?
Wife: Oh no! You crack on darling! Just hand me money!
Second Principle: No one cares about me getting a win money-wise more than me. So I will do all my own thinking and all my own decisions, no matter what anyone else says or thinks about them. There will be no one to blame but me if I screw up. But even if I strike gold, there will be no one to praise. Because while this is a work of skill, some fortune is also required, and just cause you hit it good today, or once, or 1,000 times, doesn’t mean you will not take a fall in the next minute. My policy here is basically the same one of a bout in martial arts. Or like Fedor Emylianenko put it when they said “You’re undefeated!” He replied (paraphrasing from memory): “That’s only true today. Tomorrow I may be defeated or even stop fighting. All I can do is thank God.”
Third Principle: Human behaviour is generally predictable in large numbers.
Fourth Principle: Some patterns seem to be chaotic but are not. And some patterns appear to be structured but are chaotic. Telling the difference is difficult and sometimes may just be down to luck.
Fifth Principle: Not all perceived patterns are real patterns, but some real patterns exist and betting on them is the only real tool anyone in trading has.
Sixth Principle: If you do not know or understand the fundamentals (reasons for existing) of the asset you are dealing in, you have no concept of strategy. Without strategy, in the long term, no war can be won other than by uncommon luck; which obviously should not be your strategy. NB: I DO NOT have a strategy right now. So in the long run, if I don’t learn or find one, I will fail.
Seventh Principle: The mechanics of trading are details that are constantly evolving. keeping informed is required. Consider it like doing regular maintenance on your jet plane. Would you just keep flying around in it without ever checking it and upgrading anything that is outdated? You MIGHT get away with being sloppy at this from time to time, but again, in the long run… it will cost you.
Eight Principle: Tactics are short term. Strategy is long term. You need to have both.
Ninth Principle: Human greed, fear, hope and laziness are unfortunately more pronounced in the general population than humility, courage, fortitude and perseverance. It is my belief than in order for trading in shares/crypto and other such things, to be more of a skill than blind luck, you need to be demonstrably better than the human average in this regard. Please note that I said nothing about morality. There are very tenacious, brave, strong, and able to keep a low profile people, that are thoroughly evil. Being skilled at trading is like being good at poker. Yes it’s a skill. yes luck still plays a decent part, which means sometimes you will lose no matter what, but your skill as a trader or poker player says nothing at all about your morality. And if anything, it is more likely to be jaded or at least not pristine, since as I said above, the entire structure is essentially morally repugnant to an actually decent and innocent soul.
Tenth Principle: Yes you CAN use the devil’s own tools against him, but it is an exceedingly dangerous game, most human beings are absolutely incapable of playing it and will get corrupted, broken or both in trying to do so. I do not believe most men are even aware that they have entered such a “game” even when they do it, and such men are almost entirely destined to be doomed. If any escape they tend to be crippled emotionally, ethically, spiritually or even physically or a mixture of these. of those who enter the “game” consciously, most fail. A few will get out more or less intact if they are smart and humble enough to know this is not their Way. Only a very few will achieve their goal and get out on the other side with a win. Even then, for most human beings, the scars they accumulate in doing it are not worth it. And even if you make it and win, as with anything, there is a price to pay. Make sure you know what it can be, long before you begin on such a dangerous path.
And finally, the analysis of LOTTLE
Here are some screen caps in order with the lowest resolution showing the whole graph first (6 days) and then the subsequent graphs focussing more on the top part of the graph at increasing magnification.
Pleas eunderstand that this will be radically different when you eventually look at it. I was WAITING for a spike from $4 million funded to go up or down (the trend is a dip or double dip first then a spike, but I felt this one might just spike up without much of a dip and it did, to $5.2 million, increasing in value by almost 30% and I missed it. Because I wasn’t on the phone for 2.5 hours.
The point here is to show you the historical trend and pattern so you can compare it to whatever it is when you go and see it.
So here is my analysis of this. The token is only six days old and it had doubled in value every 24 hours. That is literally ALL I know. I have nothing on the fundamentals; the why, who, what created LOTTLE and on what basis the mystery man Adam knows gave out the —so far— super good tip.
Looking at the graph you can make a pattern out. Roughly every time it comes to about 1.5 to 1.75 times the value there is a dip. People sell and the value drops. For a bit. then people buy again. Sometimes the dip is double and more protected (in the later stages) though initially it was more single. It can also be more of a plateau than a full dip but it can also be a big dip.
So what is happening here?
This is my… ANA (Advanced Noob Analysis) take on it:
Small single dips early on: People for whatever reason bought it, it did well, they sold off a bit to hedge against it popping but new people were coming in and still buying so pretty quick they probably re-invested at the dip. this happened a few times until the numbers got bigger.
Larger Single dips or smaller second dip after initial recovery: More people are bought in now. And I have no idea what amounts people are putting in but the trading strategy of a guy that invests $10,000 in it is going to be very different from the guy who invests $10 in it… to a point… and exactly the same in another respect. Which all depends on relative wealth. Let me explain. I put in $200, which for me is not insignificant at this point in time. So for me, I selected the following strategy before I did anything:
If it goes up, take out enough to recoup the initial $200. Once you have recovered the initial $200, if it looks good let it ride a bit and periodically take out the same amount every time it doubles in value. Why this strategy is safe is explained in the conversation I had with my friend above. You make a little less money but it’s a small price to pay for the added security. If the amount you invested is meaningful for you. A few years ago, $200 was completely insignificant to me and I would have thrown it in and forgotten about it for several days probably. The guy doing this to feed his family (aside being foolishly stupid in most cases if this is his only thing) is going to use a strategy far more similar to me than the guy who is doing it purely to make a killing who is already well off. understanding the difference is important in noting the trend.
I assume most investors are like me, little guys betting a few buck they have that they will not cry if it is lost.
On that basis then, the dips are guys selling a portion to recover the initial investment. Some will miss it and panic and sell to get out, but most will leave something in to see if it recovers. And it does. So the cycle repeats. Except when the wins get bigger different emotions come in. So say you now have recovered your initial investment, you’re more likely to let the rest ride. And you’re also more likely to let it fall pretty far before selling because you assume it will recover. So the dips become larger because more people are playing long term. The second smaller dip is, in my view the split between the “richer” investors and the “poorer” guys. The poorer guys will sell as soon as an upward spike puts them a little better off, because remember they are still trying to recover the initial investment. The richer guys will hold out longer, making the dipping process last longer and have a wider swing.
Later: From about the $4 million mark though there was a longer plateau. To me this signified that most likely everyone had more or less recovered their money and they were waiting for a dip to buy low, but in the absence of it a spike would happen anyway as new players came in or the old ones just went for it anyway assuming good will happen. And that is exactly what happened. But I blinked and missed it. Now at $5.3 million I bought another $80, which would be “foolish” normally, as it is at the top of the next “plateau”. But… I think aside a little dip, the pattern here is likely to repeat as per the 4 million did because most people already recouped their money, so now, either people like me that see this trend, or new player coming in, or a combination, is likely to drive the price up again fast. And even if there is a dip I believe it will recover. As I am not actually a day trader glued to his computer and as I have not put in automated buy/sell orders (like I said, still low ability on the mechanics remember?) I am betting the rise will continue for a few days yet. If my total investment doubles again I will take out twice the original total investment of $200 so I will have $400 out and no matter what happens I made $200 profit even if it all crashes and burns overnight.
Right now, if it crashes, I will have lost about $80 total as I only pulled out $160 but there are some fees to cover and so on. It would suck, but it’s not what will make or brake me.
Right now I have $472 in LOTTLE so I am actually “failing” and not following my own advice as I should have taken that $70 out to make my initial $200 safe. instead I put it in because my view is the spike will carry on for a bit yet. And so far, the small movement I saw since the start of this post seems to be in line with that calculated risk.
So that is it. I hope if you do Jon this trade on your own from wherever you are in the world, we can both become filthy rich.
Just don’t blow it all on hookers and cocaine. Life has far better options than that.