Trading is more than just buying and selling. It’s a journey.
The journey involves self-discovery around a range of things.
Things like how you see money. Your appetite for risk. Your emotional intelligence. And your ability to adapt.
All of these things can be learned, improved, and adjusted over time.
The process of beginning the trading journey to mastery requires a variety of inputs.
First and foremost, you have to trade and trade with real money (or coin) on the line. This is the only way to activate your mind and emotions. Then you will work towards mastering them.
To make these trades, you will require a variety of resources. The most important resource is a stake. Then you have to have a place to trade. And you will likely have a variety of tools, like a technical analysis program to help you analyze and make decisions. In addition to this, you might participate in forums and on social media. Or read a variety of books.
In the Bitvo Learning Center, you have access to a full lifecycle of trading-related material as well as commentary on events and cryptocurrency products.
These are written to be read and reread as markets cycle from bull to bear and back again. From flat to volatile and trending.
I wrote these for you to help you navigate an ever-changing market environment.
And below are some trading-focused highlights amongst our more than 100 resources.
Starting out as a trader
Most trading is pretty similar. There are some important differences depending on the asset and the approach you use.
But when you’re starting, there are some key things that you should think about.
These include deciding what kind of trader you are and understanding things associated with order types and order books. You want to understand mistakes and losses as tuition. And have a perspective on risk management to keep you out of trouble, including thinking like a financial advisor.
The objective is to work your way through the trading learning curve without eating up your stake.
Here are some articles to get you started.
Here we explore the real-world education you’re going to receive while trading. You aren’t going to get this sitting in class, reading, paper trading, or being on a forum. You get this by putting money on the line.
Trading is, in my view, one of the most important forms of education you can get.
There are different styles of trading. Choosing the one that best suits your personality is key to developing your trading acumen.
If you trade risk assets like crypto, this one simple idea is key to getting through any market environment. There’s lots of terrible advice on forums about what to do with your money. But they almost never talk about crypto as a part of a wider mix of assets. Nor are they typically explored as risk assets.
Here is how to see your assets the way a financial advisor would.
Being your own bank is a powerful concept in crypto. One element of that is total control of your assets. And the other element is the responsibility that comes with that.
Here, you get an understanding of what that means.
A key part of the be your own bank concept is the idea of self-custody. Self-custody is one of the most important advantages of crypto, and it starts with a crypto wallet.
Cyber security is big today, especially if you are involved in crypto. Here are some basics from a couple of cybersecurity experts.
Risk and risk management are one of the most underappreciated topics in crypto. Most of the catastrophic losses in crypto in the 2022 period are a direct result of poor risk management.
If you plan to trade over the long term, this is a subject you must take seriously from the get-go.
Technical analysis is a great way to explore crypto, develop trading plans, and define risk parameters. Here are some basics for traders just getting into technical analysis, including some resource recommendations.
Your trading screen has a bunch of stuff on it. Here we tell you what those things are and provide an explanation of various order types and how they work.
If you’re in the startup space, you know what this is. If not, MVP means Minimum Viable Product. Treating your initial trading like an MVP is a great way to develop your trading plans and expand your skills.
Trading involves a bunch of skills that are often unappreciated. These are the soft skills. As you work at it and get more experience, these will develop. And they can be used in a variety of other life contexts as well.
If you trade crypto, you will have to report to the CRA to determine your tax bill. Our annual tax guide has explanations on taxable gains, losses, and designation for tax purposes. Our guide is updated annually with any relevant changes.
Intermediate trading: Developing key skills
Once you’ve got some experience in the market, you will likely be hungry for more information.
How do you trade more profitably?
How do you avoid certain kinds of mistakes?
And so on.
This section has some key elements to focus on as you advance your trading acumen.
The way you approach your trading is important. Here we focus on what these different concepts mean and how the press talks about traders they like and the ones they don’t. And what it means for you.
These rules are simple but hard-won through years of experience. If you haven’t thought about trading in this way, these rules may be of value to you and can act as a catalyst for developing your own.
Even when you manage risk well, things can go wrong. In 2022 far too many people lost everything because they bet everything they had on one platform without considering the overall risks involved.
Here we emphasize that return on capital is secondary to return of capital.
Expectations are a fundamental part of trading any asset. Expectations and reactions to catalysts create trading opportunities and shape prices. Here you can see how this process works.
Risk moves back and forth like a pendulum from periods of extreme risk to periods of low risk. As the pendulum moves, trading opportunities are created because, at the extremes, most traders are getting the wrong message.
Here we explore how to think about this evolution and how you might be able to use it.
This is an idea born of the thinking of the late great Jim Camp, the World’s Most Feared Negotiator. This is another way to think about your trading performance through a series of different budgets.
Thinking about seasonal catalysts is a valuable way to recognize potential trading opportunities. Here we look at a handful of seasonal catalysts occurring in the fall that may impact crypto prices.
Lessons from the first big blowup of a wild 2022, including how to read founder communications.
Source documents in crypto are more important now than ever. Here we look at what you can learn from a look at one blow-up in 2022. The typical crypto whitepaper holds a number of clues as to potential problems ahead.
Important lessons from the bear market of 2022. Some of these will be the foundation for a series of trading rules for a generation of traders.
Sometimes you get blindsided by a hidden market risk you were unaware of. And when things go sideways, you can reflect and see where they went wrong. Lots of times, these patterns don’t repeat exactly, but they do rhyme.
An important piece based on the expectation of a hard market environment and how you can get ready. Here, we explore how to prepare for a year when it was anticipated that you would get ten years of experience in one.
Sometimes simple technical signals can provide a new way to look at market activity. Here we explore using support and resistance over different time frames as a guide—a simple but powerful concept.
Other tradable crypto assets
Trading is relatively similar across assets, but there are some key differences. For example, unlike equities, futures and options are contract-based and always involve using leverage.
Crypto is unique in the sense that it can be traded like an equity or a currency and is also available in a variety of derivative products.
In this section, we will explore key differences between various crypto assets and look at leverage.
Clearing up some confusion around what various tokens or coins are called and what they represent.
One of the products available to crypto traders is options. Here you get some perspective on what to look out for if you start trading these assets.
Some things to think about if you’re planning on trading crypto futures.
Like risk management, this is a very important topic. Leverage magnifies everything on both the upside and the downside for the user and for everyone else in the market. This gives you an important perspective on the ups and the downs of leverage in a market.
The mental trading game
Trading is, in a very real sense, a mental game. It’s like most other things in life. Your perspective and how you see the world will shape your decisions and activities.
We spend a lot of time talking about the mental game in these pages for that reason. Market activity is a reflection of the moods and thinking of participants.
Here are some key mental game pieces from the learning center.
Every once in a while, you get beat up in the market, and putting on trades becomes tough. It’s like you can’t touch the keyboard even when you have a plan and control your risk.
Here’s one tried and true solution to get you back in the game.
Stress is an ongoing companion as a trader. And stress doesn’t always have to be negative.
But negative stress is a problem. Here’s a way to look at it and a couple of simple things to help manage it.
Slumps are hard to overcome sometimes. You have to get your head straight at a time when that is hard to do. In this piece, we show you how to get back on track after a rough year or series of trading losses.
This is part of every market cycle.
The other side of the slump is the time when you’re making a ton of coin, and you engage in excessive risk-seeking. What you don’t want to do is lose all your gains. We talk frankly about this and what to do to keep more of your gains before the good times go bad.
Like slumps, this experience is part of every market cycle and the time to read it is long before the market turns.
The GameStop saga was important for a couple of reasons. One is you got to see how clearing in the legacy markets can affect trading. But there was a powerful psychological component as the “little guys” got together and rolled some hedge funds. These are guys who, in some cases, saw their parents lose everything in the GFC.
An important piece about a key benefit of crypto teaching a new generation how to build, earn, take risks, and take responsibility for the outcomes of risk-taking. Legacy markets have, over time, made things so safe that lots of people cannot participate. Crypto changes that equation.
This is one of the most powerful aspects of the entire crypto industry for an entire generation.
Everyone out there is trying to influence what you think. One of the 7 soft skills is discernment. In this piece, we talk about how you can interpret what you are reading and hearing.
Thinking critically about what you hear and read has been a key skill in 2022.
When you’ve nailed down the basics and advanced your trading acumen, there are some other areas you can explore.
These include short selling and things like hedging, and a detailed way to examine your results.
Plus, I’ve included a long piece written as the crypto crash was happening in 2020. You can see the thinking and how that can be shaped into a trading strategy, in this case, around the halving.
And we also explore tax loss season and how to use leverage without using leverage.
Being a great trader means understanding how you make your money. That means good records and the evaluation of those records. Here is how you discover exactly how and when you made your money to get you prepared for next year.
Hedging can be an important part of portfolio management. Here we explore the origins of hedging and hedge funds and how one might approach hedging.
Short selling is a tough game. Even the guys who are good at it eat a lot of losses. Short selling is an important liquidity element in any mature market, and you should understand how it works even if you don’t use it.
On how to use liquidations as a part of your trading strategy when others are using too much liquidity.
Tax loss season offers some unique opportunities, like how to think like a hungry bear.
In periods of turmoil, volatility rises, and it creates numerous trading opportunities. Here’s how to look at periods of extreme volatility as the market searches for a direction.
This was written as the market blew up in 2020 and provided a way to look at the upcoming halving and get ready for it. A wide-ranging piece showing how the market thrives on history.
A powerful concept. We are all shaped by events that are heightened by emotion. And sometimes forgetting is the key to better trading.
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Trading, in some ways, is simple. It’s merely an exchange of different forms of value between individuals and/or entities.
There are lots of reasons to trade. But all of them are intensely personal. There is no one way to trade or one reason why you should trade.
And over time, you can build skills and evolve your thinking about markets.
The articles we’ve highlighted here encompass the life cycle of a trader. They are meant to be read and reflected on throughout market cycles.
Because a big part of the game is in your head.
It’s about talking about unique perspectives which might be against the prevailing narrative.
It’s about thinking for yourself.
About taking responsibility.
Ultimately trading gives you something more powerful than profits and losses.
It gives you a sense of personal agency.
And there is nothing more powerful than personal agency in a time of turmoil.
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