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#5 - Navigating the Crypto Markets, From Wallets to Regulations, Unveiling Trading Strategies and Future Insights
21 Plays10 months ago
Cryptocurrency trading and investing. Delve into the fundamentals of crypto market operations. Our exploration extends to the practical aspects of crypto trading, covering the ins and outs of using crypto exchanges, basic chart analysis, indispensable indicators, and the identification of trends, support/resistance levels, and trading patterns. We emphasize the crucial importance of risk management and the process of setting stop-loss orders to fortify your trading strategy.
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Transcript
Introduction to Trading Concepts
00:00:00
Speaker
Hello everyone and welcome back to the Numero Mesh Podcast for the podcast number 5. In this episode, we will speak about the trading basics, some stocks options, they have cryptos, features, etc, the different strategies.
00:00:16
Speaker
the different patterns, the different crypto exchanges, chart analysis, indicators, trends, support resistance and trading patterns. So we will try to break down these topics without being too much technical and trying to democratize these concepts. So welcome back everyone. Hello, Sam. How are you doing? And can you start by jumping directly into the topic and explain what is trading for you, please?
00:00:43
Speaker
Hi buddies, happy to be here again on this podcast. Yeah, without further ado, let's hop into it. I mean, for me, trading, so first and foremost, it's the act of buying and selling assets for obviously various reasons. Most things can be traded in my opinion, so it's not only linked to the financial markets, which we'll get into later, but
00:01:07
Speaker
It can be linked to physical assets, anything that can be exchanged as long as there's a market or a market can be found. You've got stocks, options, ETF, crypto, futures. They're the most common financial instruments that you'll find and that are used for trading. I mean, you can either trade physical things like stocks by buying and selling shares or derivatives, which are based off the underlying, which could be the stock.
00:01:37
Speaker
there are different advantages to each based on on your goals basically and in trading one of them is leverage but it's important to note that it's not only limited to financial assets it also expands to physical I mean there's things that's how like futures and options work where there may be optionality or the obligation to make or take delivery on the underlying physical assets
00:02:04
Speaker
And then there's also, for me trading, it's also, you can do it in everyday, you can do it with everyday physical products, anything that's subject to trade, for example.
The Value of Hands-On Trading Experience
00:02:15
Speaker
You've got the secondary markets for items that people have previously purchased, potentially used, and that they're selling now. A great example of this is smartphones. You'll see some phones being sold at discounts of the initial retail price as the seller doesn't want or need it anymore. And on the other hand, you've got a buyer that's seeking to buy it and own that phone because he might be replacing his phone or whatever.
00:02:43
Speaker
form of trading, especially if you do it over and over again, you could be trying to buy cheap phones and sell them more at a higher value. So that is also trading. I mean, I'm rumbling on about this, but I think it's important to mention that because trading in the mainstream public is largely limited to the scope of financial assets. And ultimately trading is just having the ability to make a transaction with potential varying values. At least that's my opinion.
00:03:13
Speaker
Anyways, today we're gonna start, we're gonna discuss the basics of trading and cover some of the specifics of crypto trading, investing and how you can start trading today.
00:03:25
Speaker
So for me, there is no better way to learn than taking the risk and diving straight in. It can be daunting, but sitting on the sideline won't make you a better trader for sure. Opening an account, starting reading news, looking at charts, try an error, and even using a paper trading account are all good ways to start, in my opinion. Obviously, everyone's trading journey is different and people will have different approaches, but setting yourself up to have the basic things you'll need means
00:03:55
Speaker
getting to action faster really because with paper trading although it may seem you are trading for real you aren't and it's very different to having a live account given capital constraints and psychological factors
00:04:12
Speaker
which all come into play. I've been trading myself for nearly seven years now and I've been trading in the space and seeing the space grow and become more accessible to the masses through time, which is great. I recall at the time I was 18, just at the legal age of opening an account, but didn't have the minimum balance necessary to open an account of, which was 200 euros. So I created the joint account with a friend of mine,
00:04:41
Speaker
We tried trading various products and inevitably we blew the account. We lost 200 euros, but we learned in the process. So to learn, you have to dive for meat. You have to give to the market and it will give back eventually, which has been the case since. Nothing wrong with starting small as there's a high probability of losing the money, blowing the account. But I think that's just all part of the game. It's part of the process, you know.
00:05:09
Speaker
And eventually you'll learn other concepts such as position sizing, risk management, entry exit management, and find what you are most comfortable with while understanding yourself better.
Trading as Personal Growth
00:05:21
Speaker
I mean, trading is a form of personal growth and continuous improvement. And for me, that's the beauty of it. Also, needless to say that past performance is not indicative of future performance, blah, blah, blah, blah.
00:05:37
Speaker
I mean, to add to perspective, I'm going to ask you Boris, what would your definition of trading be and how did you get started? Of course. So before answering the question, I would like to come back a bit on what you said, because it's very important to understand. I think that there are a lot of stories about people that have both things. There are also videos that I like a lot about someone that is starting
00:06:07
Speaker
a trading a pen then he get another pen that is better then he get another pen that is better then he got another item etc etc in chile having a house or these are the kind of um headlines of and the titers of videos that we can find online on youtube and it summarize well the
00:06:28
Speaker
what is trading because as you said everyone can exchange with everyone as long as two people agree to trade so I think you took really good example and it's nice that you shared your knowledge and today and in general on the podcast I'm super happy to discuss these topics with you and in general organizing this podcast so I think we will have a good one today as it's kind of your
00:06:58
Speaker
ground and not especially mine even if I have Some some kind of experience so to answer your question in a more direct way for me trading is as I said exchanging something for another thing, so I have always had a protective approach to my money because I tend to be in the extreme as you know and as some of the people that listen this podcast and know me in the
00:07:27
Speaker
real life I'm either being super generous and give everything or being super stingy and keep everything for myself so maybe having some brothers and sisters has played the role into that but I don't know if I want to find an excuse and I prefer to assume it and say okay in life in general I like the extreme and I try to find the balance in general it's my character
00:07:53
Speaker
So to come back to the topic and to talk about the first steps, my first steps into trading, I must say that I started by saying to myself, okay, let's try with a virtual account. It was on eToro. And eToro offered, I think it certainly does still today, like other platforms like plus 500.
00:08:16
Speaker
A virtual account, a paper account as you mentioned, so except the reality that is I never stuck to using these three accounts. For me, it's a bit like going to the casino.
00:08:32
Speaker
and watching others play. It's exciting, but still much less than playing yourself with the possibility of losing or winning. So here is how I get started by opening an Ettora account and an account on plus 500 if I'm not mistaken.
00:08:49
Speaker
I don't remember if it was plus 500, but it doesn't matter. Itoro, I'm pretty sure about that. So on this Itoro account, I had the possibility of winning or losing money virtually. So it starts like this with 100,000 euros, I think.
00:09:08
Speaker
it seems that it was a virtual budget and I must say that I didn't do too badly and it's a point that I wanted to mention because at the same time it's always easier for me when it's not my real money I mean I don't know about you but for me when it's someone else's money or I don't have an emotional
00:09:31
Speaker
attachment to the money I'm risking I make better decisions so this is a kind of sentence that is famous do what I say but me I'm not even applying what I'm recommended so in French we say do what I say but not what I do
00:09:51
Speaker
So this is advice that I try to apply when I happen to trade which is increasingly rare in crypto because I dedicate more and more time to creating content for this podcast or for server info which is a community related to the game server.
00:10:12
Speaker
Yeah, I mean, I definitely agree with this. It's interesting because it touches on the point of psychological constraints and parameters that affect your decision making.
Emotional and Psychological Aspects of Trading
00:10:22
Speaker
So because being able to make your decisions and perform under pressure is essential, but it's not something everyone can do.
00:10:29
Speaker
I mean, that being said, a decision outcome may be unfavorable and end up losing your money, but that doesn't necessarily mean it was a bad decision. That's something I learned recently. You've not got to be too harsh on yourself for that. But the thing is, you'll never have a full picture of all the information, especially as a retail trader, because you'll never have the information first or you might just not have it.
00:10:53
Speaker
So you really have two options. You either stick to your strategy and plan or you make the best educated decision at the time with the information you have whilst trying to contain your emotions. I mean, emotional training can be disastrous and we are all prone to it no matter what people say, but that's all right. As long as you, you can have emotions, but you need to learn to recognize when you are
00:11:21
Speaker
and what are the fundamental drivers of your trading decisions. So this is one of the reasons paper trading can be dangerous as it can lead to a false sense of ability and confidence that doesn't necessarily translate into live trading.
00:11:37
Speaker
I mean, I recall myself, I've done it a couple of times, just started a challenge on paper trading accounts. This was when I was starting out. I remember there were binary options, which was a thing at the time. So it was kind of like placing a bet if you won, if the price was above or under what you said, whichever direction you took the trade on.
00:12:00
Speaker
You'd earn 90% if not, you just lose it all kind of like a sports bet and I remember I mean I grew I grew I just had challenges going from like a thousand trying to make a hundred thousands and It didn't seem too hard, but this was all in the realm of fiction. It wasn't real. There was no emotions I mean at worst what happens I could just reset, right?
00:12:22
Speaker
So it's important to paper trading does have benefits, but you got to be aware of what it doesn't prepare you for. I mean, and one question I want to ask you Boris is how from this step, so you had the paper trading account, you opened the account, how did you dive further into your trading journey and break away from this initial phase?
00:12:48
Speaker
Yeah, it makes me think about a lot of steps, so I won't go directly into what I'm thinking right now, but I'm thinking a lot to address it later, because what I want to speak about later is the fact that the motivation that you have, depending on if it's a paper account or if it's a real account in one sentence,
00:13:11
Speaker
I remember I was trading and it was a main source of revenue when I launched my sole proprietorship, so my first business. And it's true that the decisions are totally different when you trade on a real account, that the money is going directly to help you to live, in my case that was helping me to live.
00:13:34
Speaker
and when I was doing trading on a paper account where I was just trying to understand the basic concept, so to continue and to make the episode and in general the story chronological. The second step after opening this virtual account was to buy shares on it also.
00:13:57
Speaker
I think around 60 euros or 100 euros I don't really remember because there was a bonus as all the platforms are doing so I don't especially recommend it at all but it can be a good way to start so I made a rookie mistake thinking that I was going to become super rich in a few seconds I am exaggerating of course but it's not that far from the reality so I buy
00:14:28
Speaker
and sell in the next few minutes or few hours or few days with or without leverage I don't remember very well for those of you that doesn't know leverage is the use of borrowed forms to increase one's trading position so in my case I had let's say 10 euros
00:14:46
Speaker
And I could apply a leverage of 2, that means that I theoretically have 20. And out of these 10 euros that are mine, I can lose two times more fast than 10 euros, but I can win as well two times more. So I buy shares and resell them.
00:15:04
Speaker
but the thing is that I didn't look at the fees and the fees were exorbitant and I did not realize at the time that is to say during these first steps that just to pay the fees I was going to pay the exchange platform so in this case eToro I would have to keep the shares in my position for longer than a few minutes or a few hours or for a few days for sure
00:15:27
Speaker
but I didn't know. So this is why I wanted to talk about the length of ownership of investments and we touched the topic in the podcast number three.
00:15:39
Speaker
If I recall correctly, that is just that explain the topic of how long do you want to keep this investment and we will come back to this concept just after. But more specifically in the concept of in the context of crypto trading, I think it's a major element to take into consideration.
00:16:00
Speaker
Yeah, I mean this is definitely like an important factor. I mean you find a lot of reviews on internet for different exchanges, finding the best exchange. I mean this can vary from person to person. Obviously you're looking for different things.
00:16:18
Speaker
based on your trading style what you trade etc but for me this is one of the most important factors so when searching for an exchange the key factors for me that I'd look out for are liquidity so having the ability to enter and exit positions without a huge slippage or spread
00:16:38
Speaker
So spreads is kind of like just the commission that they'll take and slippage is when you put the order through and based on supply and demand you might get filled at that price or the order might, once the order's sent through you either get filled at the exact price or you might get a bit off that price but should be close in a high liquidity market.
00:17:01
Speaker
in a low liquidity market, this can vary hugely, it can swing. So imagine you put an order through, market order through at $10. If you take to buy, if all the sales are gone at 10, then the next available ones might be at 12. So there's a 20% difference there, which can hugely impact your trading.
00:17:25
Speaker
I mean, that's important when you're backtesting strategies and a lot of these algorithms and things, it's something to take into account in their backtesters. But I mean, alongside this in the product range, there's the product range and the offering, which is associated with the fee structures, because I want to be able to trade as many things in a central place. I don't want to have to mess around changing exchanges going from one to the other, because that means
00:17:53
Speaker
There's bank fees for transferring funds, which means there's a reduced P&L and also a risk of missing out opportunities. What happens if...
00:18:03
Speaker
I see something on a low, a high frequency, in a high frequency strategy, so on a low time frame that's one minute, even lower, or whatever. I don't have time to do a bank transfer. I need to be able to do it now. And that is only possible if you have everything that you want on one exchange. I mean, or you have multiple exchanges which are all funded with money.
00:18:27
Speaker
I'd just rather have everything in one place. I mean, furthermore, I want the best price possible. I don't want to end up overpaying when putting orders through.
Understanding Crypto Markets
00:18:36
Speaker
So I touched that just previously, but I mean, you got to be careful. I mean, use limit orders if you're wanting a specific price. That's a way of kind of reducing the risk on that, the spreads and commissions that the exchange or brokers take means.
00:18:51
Speaker
you might need a high price movement just to break even or even get into profit. So it means you'll open your position, you'll be in the red.
00:19:04
Speaker
You might be down a bit or a lot and the price has to move up a certain amount before you actually break even or make in profit, which isn't ideal. You want that to be as little as possible. Obviously you can't open a trade and be directly in profit unless it moves in your favor straight away, but you want that.
00:19:23
Speaker
those fee factors to be as minimal as possible i mean on major exchanges and assets it isn't a common issue to get a lot of slippage or huge spreads unless there's major events but it's good to keep in mind especially when you're buying that next shit coin i mean so we're going more into the crypto now um bois crypto specific so bois to this day so what are your thoughts on the crypto trading
00:19:52
Speaker
I already know what I'm going to say so it's not going to please everyone so sorry in advance I like to think that the people who listen to this podcast are like us like me and therefore that there is a part if not all of what I'm saying to say which
00:20:10
Speaker
will please certain people more than others. This is only my point of view as of January 2024 and I reserve the right to change my mind in the months or years to come. I have already said that this is also the goal of this podcast to make us change our minds because as we say in French
00:20:30
Speaker
in Yakurekonk in Shansh Padavi. That means it's only idiots who don't change their minds. What I mean is that crypto assets are not investment products in my opinion. I even disagree with myself that after saying this sentence because the recent approval of Bitcoin at ES has changed the legal situation.
00:20:57
Speaker
For me, these are investment products at the end because the American regulator has just legislated on the subject and has just authorized Bitcoin test. But in short, I'd like to ask myself, okay, what is Bitcoin? Is it a real project investment? Can it be compared to shares, etc., etc.
00:21:21
Speaker
I'm proposing that the next week or maybe in the next months to organize an episode dedicated on this exceptional subject that is the Bitcoin attempts because I'm sure my opinion is unpopular in the majority of my today's thinking process and I want to conclude
00:21:44
Speaker
My remarks by saying that crypto assets in my opinion are one of the riskiest categories that exist on the financial markets. I have never considered my trading expenses as investments and again what I'm saying now is more or less true because I'm super enthusiastic about the blockchain technology, about the crypto
00:22:09
Speaker
because if it wasn't the case, obviously I wouldn't have started the project I started.
00:22:15
Speaker
and I'm much more enthusiastic as I say about the technology than the financial aspect but that's not exactly the topic of the day. All this to say that my vision of things regarding trading is that it is possible that certain cryptos will disappear to leave their places for others it has happened in the past and can happen in the future and no one
00:22:40
Speaker
of these cryptos at the moment have guarantees and utility comparable to real estate, for example, which meets a primary need of housing. Moreover, I was thinking recently about this topic, a philosophical subject which deviates from the subject of the day is that the human being
00:23:02
Speaker
is the only animal on earth which pays for housing and which pays in order to satisfy its vital needs to eat, to drink, to have a roof over its head, etc. So I'm starting to be more and more sensitive to the usefulness of an investment and I would like to know some of its topic that you consider and what do you think about that?
Trading vs Investing: Key Differences
00:23:31
Speaker
Yeah, I mean this is interesting because you're touching on the subject of kind of trading versus investing. I mean typically the most simplistic of the differences is usually in the motives and time horizons between trading and investing. I mean trading tends to be
00:23:49
Speaker
taking positions on shorter time horizons. So you might have been, I've heard scalping, day trading, swing trading, which all refer to, well, trading taking positions on different timeframes. So scalping is very, very short times. It might be, I don't know, a couple of minutes. Whatever day trading is when you enter and close a position within the same day and swing trading over multiple days, potentially weeks. Um,
00:24:19
Speaker
And I mean, the motive is to make a profit in trading ultimately. Whereas I think investing is slightly different as it can be longer time horizons such as years, it can be like multiple years and fits into a more global strategy which could include making profit. I mean, answering portfolio management needs such as like diversification, balancing, risk management, fiscal optimization, there's loads of different
00:24:48
Speaker
reasons you may want to buy a financial asset or sell it and it might not only be linked to making profit. That brings me to the next question which is how did you invest in what you considered value and also how do you distinguish
00:25:08
Speaker
What is your view on trading versus investing? For me, the main difference between investing and trading is utility. So in my opinion, an investment must be as useful as possible to be as profitable as possible. I can be wrong, but when a trade must be most optimized regarding the moment of the exchange in order to benefit from a trade,
00:25:36
Speaker
without necessarily the sections responding to a useful need in the short, medium or long term. If a trade concerns useful things, it's bingo, it's the jackpot. I'm not saying that cryptos aren't useful, I'm just saying that I simply notice that in my everyday life, the reality is that I need a roof over my head
00:26:04
Speaker
much more than owning cryptos and benefiting from the advantages linked to holding these cryptos. So coming back to the topic once I played let's say on Itoro because I considered that I played with my virtual money and the 100 euros that I had deposited at the time.
00:26:27
Speaker
I started to be interested in the concepts of cold wallets for cryptos, so I very quickly invested in a Ledger Nano X key in order to secure my cryptos
00:26:40
Speaker
So to explain the difference between cold wallets and hot wallets, cold wallets and hot wallets refer to different methods of storing and managing cryptocurrencies. A hot wallet is connected to the internet, making it more convenient for frequent transactions. However, it's potentially more vulnerable to hacking due to its online presence. On the other hand,
00:27:07
Speaker
A cold wallet is not connected to the internet providing enhanced security against online threats and it's often used for long-term storage of cryptocurrencies and is less susceptible to hacking but maybe less convenient for quick transactions. Many people use a combination of both types and I'm part of these people for a balance of security and accessibility based on their specific needs.
Crypto Trading: Leisure vs Profession
00:27:34
Speaker
So to conclude, not that I have said that
00:27:37
Speaker
I would like to come back to the topic that I was starting before, that is trading for leisure and trading for living. Because I remember when I started my professional independent journey, let's say into business, I was in a good moment of the crypto market because it was the end of the year, 2020, so around September.
00:28:02
Speaker
I opened my business in November, my first business in November 2020. And just to say that when I was following some trades and during December, for example, where I was trading as an individual that didn't need especially the money because I finished another contract, I was losing, I was not losing, I was looking for a job. So I was not in need for the crypto market to
00:28:32
Speaker
procure and give me some benefits but as long as I have launched my business I was looking for all the ways possible to make profit and this has completely changed my view on the market and on the trading because now I was following people on YouTube
00:28:48
Speaker
and not only I was watching their trades but I was also applying them so I didn't sleep that much I think this is also a risk associated with the crypto market and we will touch on that later because it's 24-7
00:29:03
Speaker
And it's hard when you have the, at least it was me, it was hard for me to have the small amount of money that I had that was in the asset that is as risky as crypto. So that's why I'm always thinking also about the health.
00:29:21
Speaker
the slip, my slip, and that's also an important factor to take into consideration. Of course, the profits can be great, but what I am giving, let's say, in exchange of this fast profit, even if it has worked, and I'm thankful for the YouTubers and different analysts out there that are creating videos that I have profited to generate a bit of money. So this is what I wanted to say about that.
00:29:49
Speaker
I would like you some to briefly explain me and us, the people who are listening, how the cryptocurrency markets work and then can you please also give the knowledge that you have about that because you are much more knowledgeable than I am please.
00:30:14
Speaker
Yeah, sure. I mean, thanks for the compliments. I'll take that any day. Although it's not needed. I mean, so there's a couple specifics about the crypto markets. So I have more or less four points. So first of all is there's little to no regulation, although it has been improving over the years. And as we've seen this week, ETFs have been approved. So hopefully that might bring some light to that realm.
00:30:42
Speaker
it's important to to be careful about that i mean also there's a certain level of animosity and pseudonymity which implies a certain degree of privacy which kind of
00:30:56
Speaker
goes alongside the regulation aspect. It'd be interesting to see over the years if that kind of disappears through time, especially as maybe custody evolves, which is one of the things you mentioned previously. Do you own and hold your own cryptos or do you let someone else do it, in which case you might lose some of that?
00:31:17
Speaker
animosity, epsilonomity. Two other points related more to the financial market side, crypto market side of that. Cryptos are a globally traded market all over the world that run 24 seven with a capitalization of near 1.7 trillion today, which is a lot, seems like quite a lot and prices determined by the balance of supply and demand. So that's a very prominent
00:31:47
Speaker
Other than that, you can get scammed 24-7 and not always pursue legally. It also means the market can be traded at all times, meaning it's more sensitive and volatile overall compared to the traditional financial market.
00:32:07
Speaker
So this can be a blessing and a curse at the same time as we are prone to fake news and maintaining a position as a 24-7 job even on the weekends, middle of the night where the market will have a tendency to overact to any fundamental news and correct promptly which makes it a bit more challenging to set a trading plan with entries and exits due to the added uncertainty of price action.
00:32:32
Speaker
touching a bit on market dynamics market dynamics they're essential to consider especially in crypto due to the high correlation between the different cryptos and getting a sense of the overall trend obviously bitcoin is the majority of the market capitalization over 50 percent but there are a lot of altcoins a theory would be the second one and then there's plenty of other coins after that they tend to move in sync
00:32:58
Speaker
not always but they tend to move in sync mostly following bitcoin and based on this it will help you understand if you are trading with or against a trend which you may want
00:33:12
Speaker
or you may not based on your own trading
Crypto Trading Strategies
00:33:14
Speaker
style. I mean, you could be aiming for continuations or reversals, whatever your strategy may be, but that can help overall if you can situate if you are in a bull or bear market and then identify whether you're in an up, down or sideways trend. That's always good to understand those fundamental market dynamics and associate that with your trading style or strategy.
00:33:36
Speaker
I think there's loads of different market theories and hypotheses, which I encourage reading about, kind of how the market works, part of the financial literature. It adds perspective on how things move, but for me, crypto market is mainly supply and demand driven.
00:33:53
Speaker
and price action based today, meaning technical analysis and trading makes the most sense to me. But that doesn't mean it always be the case and that other approaches and methods of analysis can't be applied successfully. I just think that today, technical analysis seems like the way most people are trading and the market seems to, the price action seems to respond to it. Personally, I'd consider myself more of a momentum trader
00:34:19
Speaker
seeking to profit on the back of trends or breakout moves. So these might be, I don't know, very smaller time frames, so maybe one minute, five minute, but it could also be on the hourly. On the daily, I mean, I like to start from the big time frames when I'm doing my analysis and kind of go down, try find my points of entry and all that, but
00:34:46
Speaker
To do this, I look at the cryptos either having already taken off or about to take off. Because momentum, you're wanting it to build up and that comes with a lot of interest building behind it. So you can either try and catch it early, which is difficult so you'll have a higher rate of failure, or try and catch it as it's taken off. You might still have a certain degree of failure, but
00:35:14
Speaker
If it's already going, at least it's taken off, you know. So I do this by keeping an eye on the charts and identifying levels of support and resistance whilst I'm seeking for pattern formations and inspecting candle formations. Every man has his or one woman have their own preferences, but some of the technical indicators I may use at times are like moving averages, RSI, Stochastics, Ishimoku, etc.
00:35:41
Speaker
I mean, having touched on that, I'd like to ask you boys, how do you use crypto exchanges, chat analysis, indicators, trends, support resistance, trading patterns? How do you go about all that yourself? Oh, as you know, I'm not the best to answer this question. It's not an easy question. I'm glad that you mentioned some
00:36:00
Speaker
technical indicators, moving averages, RSI, Stochastic, Ishimoku, etc. I think it deserves an episode dedicated also with a trader to explain what is the difference between the trash and additional stock market and overview of the markets etc. So I really believe that I need to think and we need to think about who invite to discuss that. So to be very honest,
00:36:21
Speaker
I never use them too much. First of all because I am not qualified and because I rely on what other people like Yosam are doing with them. So as I already said I am currently following only one technical analyst who is French. His name is Vincent Gan who publishes cryptos technical analysis every week on the YouTube channel of the French crypto media cryptos.
00:36:49
Speaker
So congrats guys for Cryptost, congrats Vincent for your work, I really like it. And it inspired the podcast and it inspired some of my content creation. So you are doing a fantastic job at Cryptost and Vincent on YouTube regarding how you speak, how you present, how you animate life. So I'm really impressed by that. Regarding exchanges, I very quickly opened an account on Binance.
00:37:20
Speaker
and conveys.
00:37:21
Speaker
as i explained in previous episodes so the first cryptos i received my first 20 euros in bitcoin i received for free i have already mentioned that so once the price of bitcoin had gone from 2500 dollars to 14 000 dollars thanks to the fact that we had created the cryptosphere associations i'm kidding of course thanks to the fact that the general public
00:37:50
Speaker
was starting to become more and more interested in cryptos. Maybe we have helped but I'm not really sure about that. The price had exploded and for me it is a market that is easily manipulated. As Anton Golub recently republished on LinkedIn following an analysis by Clemo Slippa
00:38:13
Speaker
I'm sorry, I don't know how to pronounce Satoshi Nakamoto owns 1.1 million BTC, which until today have not moved because as we said in the last episode, we don't know who is Satoshi, etc. Binance would own more than 643,000 Bitcoin. Grayscale is 627,000. The US government over 207,000.
00:38:40
Speaker
MT-Gox 200,000, Bitfinex over 196,000 bitcoins, the Chinese government over 194,000 bitcoins, MicroStrategy over 152,000 bitcoins, Block.1 over 140,000 and Robinhood
00:39:01
Speaker
118 000 bitcoins so all this to say and hopefully the list didn't continue because it was a pretty long one obviously these actors have an interest in cryptos and in particular bitcoin increasing in value and that if the whole btc a bitcoin because somewhere they believe
00:39:24
Speaker
in the potential of this crypto but this also underlies the fact that cryptos are no exceptions to the rule what i mean by that is that the majority of bitcoins are held by a majority like the majority of the world wealth so the decentralized side of bitcoin is highly questionable it was just a point i wanted to mention
00:39:52
Speaker
Not to say that I am against Bitcoin, I am against international investors, it's quite the contrary, but to say that the crypto markets are ultimately
00:40:03
Speaker
very similar to the traditional financial market. This is an interesting approach because it's more of like a fundamental analysis of the global supply and demand and also one of the purposes of Bitcoin being an alternative financial system and decentralized currency
00:40:24
Speaker
as over the years with the institutional adoption become more centralized and gone in the hands of the ones that are operating the traditional financial system.
Technical Analysis Basics
00:40:33
Speaker
So it is quite interesting to see how things have evolved over time. Exactly and when it comes to the basics of chart analysis, indicators, trends, support and resistance patterns etc. I'm not the best person as I say to talk about it and
00:40:51
Speaker
some I will let you talk about it much better than me. What I can say is that the trend of crypto and in particular of Bitcoin since its creation is bullish and it's pretty funny that I have checked recently the chart of the Bitcoin price yearly and as Vassan can be saying it looks like nothing it's a curve that has 14 candles
00:41:14
Speaker
uh maybe a bit more well anyway um so between is another listen basically and uh what i can say as i said is that is bullish and and you will tell me and you would be right thank you so much baris
00:41:31
Speaker
We are not sure that we needed you to know that. You would be totally right. So concerning the basics of graphical analysis, I will talk about it briefly and let some talk about patterns and indicators because I'm not knowledgeable enough. I can simply say that as I already mentioned in episode 3,
00:41:53
Speaker
about our mistakes and my mistakes I set my own supports and resistance and at the end it's not really my own because it's I think the same for everyone in some way that is to say I base myself on my purchase price before even buying I always think about as many scenarios as possible and think
00:42:17
Speaker
It's a good practice to consider all possible scenarios. So I start by asking myself the question, what is the lowest price I have seen? Let's take the example of Bitcoin and go back to 2017 when after receiving my first Satoshis, I decided to spend
00:42:37
Speaker
100 euros on binets in order to complete my first holdings so i find myself with roughly 130 euros in crypto which will quickly become 200 euros and then 300 euros
00:42:53
Speaker
I would sell when I made a profit of 170 euros, maybe a bit more, I don't remember. So to come back to my process at the time and which I still use today, also having decided that I no longer expect much from cryptos and that I do not consider it as an investment, but rather as a center of interest and a way to build a community.
00:43:20
Speaker
linked to crypto with cryptosphere to server with server info with numero mesh etc because I only own NFTs today which are server player cards besides I plan to spend another 1000 server euros in server and then manage the amount I have in order to make it grow and benefit the
00:43:46
Speaker
community and then invest in other stuff and I think finalize my crypto experience let's say on the financial point of view but let's see what the future holds I plan to buy and resell players and we will have the opportunity to return to my server adventure in the next episodes but let's return to the topic of the day and I'm so I was wondering
00:44:11
Speaker
what the lowest price I have ever seen Bitcoin is. And this technique has advantages and disadvantages because since 2017, I have never experienced a lower price. So it was $2,500. So since 2017, I have been both satisfied and dissatisfied, satisfied because I have always had a reasonable approach
00:44:36
Speaker
which has never caused me to lose my capital and I have always managed to take profits because I adopt a simple and effective technique if I notice that the price of cryptos in this case of Bitcoin is the highest price I have experienced so I take profits when I decide.
00:44:56
Speaker
I sometimes I have not done it of course but most of the case in 2017 and in 2021 I have done it so this allowed me to sell and make 170 euros profit maybe a bit more on an investment of 130 euros even if I don't really consider it as an investment but rather a trade anyway so this
00:45:26
Speaker
then allowed me to resell also in, as I said, 2021. My server cards are almost at the top. When Ethereum was worth 3,500 euros. So this technique, or dollars, this technique has advantages, but also disadvantages. Why? Because if I had simply kept my cryptos and never sold them,
00:45:51
Speaker
And if I had invested everything in Bitcoin and never touched it rather than buying solar cards, I would certainly have made more or less the same profit. However, I would not have the solar cards I have today and I would have just seated watching and make profits. And I would also, unfortunately, not have the community that I'm leading today. So I prefer to take the risk of earning
00:46:17
Speaker
let's say I preferred in the past to have taken the risk of earning less financially and meeting new people rather than optimizing my gains, which is not at all an optimal technique from a pure trading point of view.
Risk Management in Trading
00:46:36
Speaker
So all this to say that I primarily use the points and annual low points
00:46:45
Speaker
to make purchases and sales and I plan to try to grow my holdings in Sorer until 2032 then I think I would I don't I think I would keep only the cards that I have won on Sorer for fun and all of this of course it's purely theoretical and I hope that Sorer will still be there in
00:47:10
Speaker
this is another idea that it gives me that we can create content in partnership with other content creators about how to help server to be
00:47:23
Speaker
the leader in the content and entertainment segment in 10 years. This is really interesting everything you said because I think especially the part where which you mentioned about limiting some financial gain and meeting people I think when you it's important to be when you're trading to surround yourself with other traders or people that have different ideas and opinions because that might bring opportunities to you
00:47:50
Speaker
multiple times through time I've been focused on certain things, I've got friends saying, oh hey look at this, oh this coin might be good, they might follow different influences or people that are talking about things, they might find a certain coin, a certain asset, have an idea and share it and then you can look into it and decide if you act upon that or not and vice versa, you could talk about your trades.
00:48:12
Speaker
It's kind of like a support group. And also it just expands your wings on finding opportunities if you adopt that collaborative approach. And then I think it's important to note that technical analysis, support and resistance indicators, it's not an exact science, which is why risk management comes into play to increase the probability of success over time and limit or mitigate risk. Regarding this topic and the use of
00:48:42
Speaker
stop losses and the importance of risk management. This may seem obvious to some and I am sure some that you would agree on this one, but I only invest what I can afford to lose. I recommend people to do the same. Moreover, I would like to take this opportunity to say once again that everyone we say in this podcast are lessons from all personal experiences and we are not
00:49:13
Speaker
in saying and recommending giving advice and investment advices. We can sometimes give advices and can sometimes share our experiences, but in no case do I claim to be the most effective and
00:49:33
Speaker
Any investment carries risks of partial or total loss of capital. So there you go. Try to take a step back, please. And that being said, I have always tried to buy the lowest price, as I said, and before talking about stop loss, I would just like to say that today
00:49:56
Speaker
Almost all of Sora's limited cards are at the lowest price, so we are recording the podcast on January 13, 2013.
00:50:07
Speaker
24 so it's possible that the situation has changed since but if I were to buy Ferrari cards and try to do resale purchase I would potentially consider that the moment is a fortune. Now I want to touch on the topic of top losses and the importance of risk management.
00:50:30
Speaker
stop losses I would give an definition and I would let you some complete its price where you stop your losses so as the the name is so you say okay I'm buying Bitcoin at let's say 2500 if it goes below
00:50:51
Speaker
2000, automatically I sell even if I'm sleeping or I'm not even in front of my screen. So from a global point of view, from what I have read, if I had the same capital of 100 euros that I had in 2017, it might be tempting to say, if I had to do it again, I would do exactly the same.
00:51:15
Speaker
except that the reality from a reasonable risk management point of view is that no, I wouldn't do the exact same thing again. I would spend 10 euros in crypto, so 10%. I would only invest 10% in the rest. I don't know exactly what would have been optimal from a risk management point of view. I think it would have been interesting
00:51:44
Speaker
interesting to place 10% in gold, 30% in Apple or Microsoft stocks and then the rest in stocks of companies I believe in such as vegan food companies, ecological companies and responsible companies.
00:52:02
Speaker
Yeah, I mean there's different ways to kind of go about the management path. So obviously when you look back and if you think you look back and you think you can change something, that is a form of progress. You can always think of it in a risk reward approach. So how much are you risking on this trade for how much and if that ratio is positive,
00:52:24
Speaker
and the probability of the high matches it matches the probability so that you're winning in the long term that can be a way to approach it but in this case with a smaller capital
00:52:37
Speaker
It seems like the way you took it was more of an asymmetric risk approach. So you're putting something on the line, you're 100 euros and you're risking it all. So you know that your downside is 100, but your upside potential is theoretically unlimited.
00:52:56
Speaker
I mean it is another way of trading one that I do like as well because you know how much you can lose and you can do this on multiple financial products. It is quite a good way to go if
00:53:14
Speaker
For smaller amounts, obviously you won't put your whole capital on that, but if you see an opportunity, for example, we see in cryptos, that could potentially 10x, 100x, huge amounts, but that are very risky. You might want to put, let's say, 10 euros on some fin.
00:53:32
Speaker
If it 10x is, that's 100. You've done times 10. If it's 10, you've lost 10% of your capital, which in the crypto realm isn't that much, I'd say. But it is important to note that it's a way that's possible training. You could do it with just 1% of your capital.
00:53:51
Speaker
and aim for that 100x or 10x. And over time, there have been papers that I've studied through that if portfolio managers had 1% of Bitcoin in their portfolio, which if they lost the 1%, it wouldn't have been that big of a loss. But if they had that 1%, their returns would have grown exponentially. I mean, it would have been much bigger return. So sometimes that is an approach to consider.
00:54:23
Speaker
And I just wanted to bounce off what you said about investing in different companies. So that's the principle of diversification. I think it's a very common and well spread idea that diversification aims to reduce risk whilst maximising returns.
00:54:42
Speaker
It's nothing new, it's a key concept introduced by Harris Markowitz in 1952 and it's evolved since having a huge impact on the financial literature. It's a pillar of today's modern portfolio theory, although this theory is
00:54:58
Speaker
subject to controversy and arguable it's not always the best from a soul returns perspective but but that's normal because it's looking to balance risk and reward i think that from an individual's perspective though
00:55:15
Speaker
It's good to invest across products as it gives exposure and through exposure comes knowledge and interest. Nothing beats having skin in the game in my opinion and at first it might be comfortable to invest in things you know
00:55:30
Speaker
But over time diving and learning about new realms that may be the next trend or for higher returns is quite exciting to me. And lastly but not least, once you've opened your account, researched, made your first trade, profited or lost,
00:55:49
Speaker
You come to the year end.
Tax and Regulatory Considerations in Trading
00:55:50
Speaker
What happens at the year end? Depending on where you live, you have to pay taxes. I think you might have a couple of words to say on that. Not too much, to be honest. But yeah, I can share because I have worked in declarations.
00:56:08
Speaker
yeah if everything let's say that you have to pay tax even if everything is going well so you you're pretty happy about that but at the same time it is not the best part of your crypto journey so quite simply to conclude before speaking about regulations and i
00:56:26
Speaker
I would censor myself. Quite simply, to conclude on this topic, I would say that I should simply invest what I can afford to lose. I have already said it's particularly true for crypto and diversifying a portfolio from the start.
00:56:46
Speaker
is a crucial point of a plan in my case I plan to diversify my assets over the long term and instead of diversifying gradually each year I focused on crypto assets for the last six or seven years I wanted that to be my job so it's I think quite of difference if you are working in the crypto space of you if you are not working in the crypto space and today I'm
00:57:08
Speaker
I'm starting to think about other investments because I no longer want to buy cryptos with the savings money I have. I prefer to risk it and invest it in our brands and our businesses. Regarding regulations, to be transparent it's a subject that
00:57:29
Speaker
some years ago was always giving me a headache also I'm disciplined, organized, we can tell each other
00:57:40
Speaker
that declare your cryptos, find about the last regulation for the exchanges, the cow I see, the verification, etc. These are really not the most attractive subjects, even if they are attractive people that are working in this space. So I think that for any investor or trader, and especially for myself,
00:58:04
Speaker
Aspects related to regulation are essential because they allow me and they allow us to make informed decisions and above all to anticipate and optimize our potential gains. I don't do it enough. I need to be honest about that. And it's one of my 2024 New Year resolutions to train myself more on the regulatory
00:58:30
Speaker
and they got side I make a quick mention that we just launched the numero mesh newsletter and obviously there will be a part of about regulations in France then regulations in Europe and then regulation internationally we will need to interview some people because I don't think that we are the most qualified but we will try to follow the news and explain them they continue to democratize
00:58:58
Speaker
the space of web3 of metaverse of artificial intelligence that i recognize we didn't speak enough from now but it will come in in the next episodes and in the next weeks or months so to conclude on that i think it's also a good way for me and for you for us to
00:59:19
Speaker
work on that and get the knowledge because all these procedures they are expensive if you make mistake on your crypto regulations it can it can quickly become expensive i have seen people spending a lot on lawyers and
00:59:32
Speaker
The more I am disciplined, the more I am taking track of the history year by year, crypto by crypto, etc. I think the less I will pay for additional services and the lawyers. Sorry if there are some of you that are listening to us, but you are pretty expensive. It's normal. But quite simply, I'm also curious and wish to be a complete consultant.
00:59:59
Speaker
Yeah, I mean it's important to keep an eye on these all these regular regulatory updates issues because as you said it can cost you a lot and if you get it right first time it's just less problems down the line especially since they can pursue you
01:00:16
Speaker
Even a couple years after, I believe in France, for example, it's five years a tax man can pursue you, so you might have put on the trade five years ago and next, before you know it, tomorrow they're knocking on your door, asking about the trade, and so if you don't log it, if you don't comply, you might get
01:00:37
Speaker
Burnt in the end so that's something we really want to avoid obviously always try stick to the rules And and yeah, I mean I think we've been through quite a lot
01:00:50
Speaker
So we just went through kind of getting started in trading, the key things to look out for alongside a couple words of advice from Boyce and myself.
Conclusion and Listener Engagement
01:01:00
Speaker
And I mean, yeah, I think we went over the trading basics, what you kind of need to get started and we'd be happy to answer any questions or comments we get and take recommendations on subjects you'd like us to touch on if there's something you'd like us to go more in depth in.
01:01:18
Speaker
But yeah, let us know I'd like to thank you for tuning into this podcast and hope to see you on the next one