Posted: May 28, 2019 1:10 am
OlivierK wrote:To give james his dues, I'm quite happy to admit that someone who does their homework on speculative markets will, in general, outperform as a trader someone who's gone in without a clue, and james shows signs of having done his homework.
One of the things that's tricky about speculative markets is working out when the instrument is overbought. It's easier with stocks, where you can calculate P/E ratios and the like, or even with fiat currencies, but I'm wondering about how one would go about determining that a cryptocurrency was overbought (if you were the sort of person who didn't think this was a permanent state).
So a question for james: is there a level for BTC that would make you think "Holy shit, a price this high right now is madness - I should sell!". If so, how do you work out where that level is?
I don't have the same expertise as you, as I've only been researching crypto and economics generally for about a year. I certainly have no academic credentials. I admit that for any outsider that I must look like a fucking fool, but I can bet that there's not many fools that you know who have EVER made investments which are threatening to triple in value in 3+ months?
Regardless, I'm thinking of selling prior to the 10K levels for psychological reasons. More to follow.
Anyway, I use several means of assessing the mood/market, including one that you personally might not have used yourself (dunno) that is google trends. Also, the usual suspects, such as volume, RSI, MacD, bollinger bands, moving averages. Also, the trend is your friend: patterns. Bart Simpson?
I was lucky enough to discover that the crypto market was on the verge of a massive bearish reversal at the beginning of this year. Lucky only in the timing of my research and discovery/conclusion. I decided to invest, significantly.
My opinion is that this uptrend will be positive for a good couple of years, generally. So far, this is how it's played out. However, there are going to be times when significant plunges occur. In the future, I will be riding these waves based upon news and technical analysis such as to maximise my profits (trading bitcoin for altcoins or all coins for tether - a stable coin). I can also short, of course.
Now that bitcoin is close to 9K, I expect nothing significant to happen until 10K. Lots of people will want to sell at that level, I suspect, and the price might take a big plunge as a consequence, Therefore, for the first time, I'm considering selling my Btc at around the $9750 mark and converting it to Tether. Certainly, I don't expect that Btc shall pass through the 10K mark like a knife through butter. I shall assess the situation when it happens, as a whole.
I've also got plans for litecoin, as I mentioned previously. There's the potential there to make massive gains within the next month or so due to the halving event. Indeed, I've already made more than $2000 on that asset since I invested, but that reward only seems to be part of the general scheme.
I also have significant investments in Ethereum. That's been a good investment too, but as a trader I need to know which coins are producing the most consistent rewards, such that I can regularly swap one coin for another as a means to reward. Binance is perfect for that.
I have knowledge sufficient to understand trading bots too, to enhance my rewards. I'm fully aware of risk/reward ratios, money management. Etc.. In other words, I know what I'm doing, I think. I've taken my time. I'm even enjoying it. It suits me.
At the end of the day, I'm risking about 20K to make upwards of a million pounds within two to three years. It's a no brainer, for me.