As a trader, learn to see the crypto market as one big supply chain, with smaller supply chains. And what is a supply chain? Simply put, it is the flow of goods or services from the producer down to the final point of consumption.
In this market, you are a seller (supplier) and buyer (customer) at the same time, and unlike what we have in other industries or companies where the customer is king, here, you are not king (as a customer). The market does not care about your feelings. It is a game of survival. You strive to win because your trading mistake would be another's gain.
For instance, have you ever wondered who bought the coin you sold for say 50% profit? Obviously that coin was at the top already at that price, yet someone bought it. Probably a novice who would hinge on hope for the coin to pump more in order to make profit. It's a cycle — a coin you bought at a dip is probably someone's profit. So being smart is important.
Now, how do you win in this space? Strategy. You've got to have strategies. How you will trade Gifto will not be exactly the same way you will trade Cannabis because these are individual supply chains. Develop strategies and bear in mind one key factor, Price.
Price is king. As an average trader, you have no control over price. So to be favored by the king you have to align yourself. Chris Ani called it Positional Trading. And you do this by forecasting.
Before you burden your pretty head with all the jargon of technical analysis - Fibonnaci, RSI, MACD or MacDonald, a powerful tool for every trader is the ability to forecast, to predict price. And in a supply chain, there are truisms about forecasting:
First, forecasts are always wrong. That shook you a bit, right? (But in Big Shaq's voice: Don't get shook, you're protected, yeah). Let me explain. Forecasts are predictions. That is why Arsenal will keep cutting bet slips. Because predictions are not definite. So when you make forecasts, know that there will be a margin of error. So if forecasts are always wrong, why is it a powerful tool? That brings me to the second point.
Aggregated forecasts are more accurate. This means that instead of forecasting that Zclassic will be 2 million sats next week, we can do an aggregated forecast by looking at the history of Zclassic for different weeks - not just one week - and with give a more accurate prediction. Let me digress a bit. It is worthy of note that aside price, another important factor in the crypto space is Time. What we call Charts are graphs of price against time. I know you know. Just a reminder. So when you forecast, it is imperative you go back to the history of a coin, watch how the price, how the demand has been for, say, a week or a month, so it will be easier to say, ceteris paribus, what it will be next week or next month or next year with a margin of error. And this will influence your decision about holding a coin alongside its fundamentals. Don't hold coins because you want to prove your patience. When you hold, don't hold onto guesses, hold onto an intelligent game plan.
And while carrying out aggregated forecasts, the third thing you should note is that carrying out short horizon forecasts are more accurate. You stand a greater chance of being correct when you say a coin will hit $1 next week than when you say it will hit $20 next year. And this is because you have more knowledge and understanding about the current market. Now, you know the policies a government like China is putting in place to fight the financial revolution Bitcoin is bringing, but you can't say for sure what next year will be.
So the crypto space is a beautiful mosaic of fun and risks. You ought to be intentional about your trades. Plan. See it as a business. In fact, it's a business. Sole proprietorship, even. You bear all the risks and all the gains. Learn to win more than you lose.
And Lambo.