The Bigger The Bear The Bigger The Bull
“how the current bear market is a golden opportunity for life changing money”
“The time to buy is when there is blood on the streets” -Baron Rothschild
One of the quotes anyone who trades or invests comes across at least once per day, when involved in the markets. But like the basic strategy for trading which is the foundation to becoming a successful trader, “Buy low and sell high”, it is much easier said than done. Or is it? With the current bear market ravaging anyone it’s way from the average retail investor sitting alone in his living room trying to make extra money to Venture Capitalists using the funds of groups of wealthy investors. Being active right now in this market will make you question your own personal ability as a trader and perhaps even worse, questioning if crypto-currency as whole has a future. It was hard enough trying to explain to family and friends what I was doing and how they can get involved in 2017 when the market was in a parabolic move upwards and it seemed millionaires were being minted everyday, it has become a nightmare now doing that exact same thing but with the added stress of constantly being told by the same people who were curious before telling you “I told you so”, as if they know what they are talking about. Day after day articles are published, this VC (venture capitalists) has closed along with handfuls of others, This ICO has gone belly up, Bakkt is being delayed, Bitcoin is dead along with every other “disaster”, scenario you can think of. No matter how much you believe in something or understand the fundamentals and technicals, this amount of negativity impacts you, even if it is just in slowing down how fast you analyze potential trades or companies to invest in, suddenly your vetting process has become a major part of your process and fees which you ignored before suddenly become important.
So what is the point? In a market where for 9 months now we have only seen drops in value across the board where is the incentive to go on? Even I have found myself contemplating switching to Forex as it seems like making money in 2018 is nearly impossible. But this thinking is narrow minded. It is as easy to get tunnel vision in a bull market as it is in a bear market, when everything is on the up and up you play out ever scenario and reason why the market will continue to rise despite in your gut knowing it cannot last forever. A bull market the likes of what we saw at the end of 2017 will have new players in the game feeling as if “they did it”, their intelligence and foresight saw them making 100x in the market and inflating ones own ego. Where $60,000 was life changing money to me any time before 2017,during the bull run as my account were heading over $150,000 at the peak of the surge, dropping to 60K seemed like a loss, especially when I got emotional about the situation and was angry at the fact the an exchange was partially to blame for not being able to sell my assets at the top, and I felt entitled to another run up for this injustice that had been done to me. The truth is the market does not care about you or your feelings, my “genius” had nothing to do with my 100X returns, I was just fortunate enough to catch a market at the beginning of a massive run and almost any trades in the year would have brought nice returns. It was practically impossible in 2017 to lose money. But to my credit and to the credit to others who diligently participate in the market, ones gains are exponentially multiplied when good research and vetting are applied to your investing and you pick some gems out of the rough, for example my moves on DCN and NEO when it rebranded from Antshares were some of my signature calls of the year, making not only myself substantial profits but as well as friends and a couple family members. But just as easily as people come when things are going well, people disappear and forget what you helped them accomplish when the market turns.
In High School physics we learn some basic principles and laws that govern our world. One of the most important and easily remembered of these is the law that for every action there is an equal and opposite reaction. Applied to the crypto market that means that for 2017’s euphoric momentum up, we would have to pay the price for it when the markets corrected, the pleasure would have to be matched by pain. When the market peaked I felt untouchable and on top of the world. Several months into 2018 I found myself reflecting on my abilities, mistakes and missed opportunities. But the most important thing about this is the fact that I was brought down to reality. This reality did not make me quit, to blame others or to say that this is the world working against me like many do, but it did make me want to not repeat the same mistake and really make myself stand out in preparation for the next bull market. One of the results of the massive correction in the market was in insatiable appetite to find out what I had done wrong, hindsight allows you to look at the chart and say,” well I should have bought here and sold here” etc. But the reality is that no one can predict this, so I began to focus on why. The psychology behind our decisions as investors and traders began to interest me, and this lead to picking up several amazing books which opened my eyes to the reality sorrounding all of us and the illusions of grandeur we build for ourselves. The most valuable lessons we can gather from the book by Stock trader, Jim Paul in his book, “What I Learned Losing a Million Dollars”, are lessons in personal psychology. This book , which I recommend for any trader, forces you to accept luck and timing for what it is and is a gut check for your ego. At the same time it demonstrates how learning from these experiences will give you a real vision of the markets and set you up for long term success. A more technical book which which also focuses on the fundamentals of how markets work, time frames and market psychology as opposed to personal psychology is Benjamin Graham’s The Intelligent Investor. Graham was one of the major investors in the early 1900’s who was successful in the long term and was also the man Warren Buffet credits as his mentor and inspiration. Having read the book twice it will give the reader a wealth of knowledge about markets, one of the stand out lessons from the book is how to put time in perspective. Time is the one currency that one cannot get back, you can make back lost money but you will not get back lost time. Being able to sit back and allow positions to develop which are in the green and understanding that investing and trading is not a 24 hour game but rather a game of months and years in which the patient always come out on top. One of the most interesting facts of this particular book is how it explained that making money is not always the hard part, maintaining it is. Referencing Forbes rich list of the 80’s Graham’s book asks the reader the question how many of these on the rich list are still around , the answer will surprise you.
Months of this humbling market lead to reading tons of books on markets, psychology and economics allowed me to actually build a solid foundation and understand what it actually means to be an active participant in these markets.
The first thing I want to address is, if you made it this far into this essay, welcome to the crypto markets Or if you are new, to any market at that since they all share similar characteristics. But more importantly, congratulations on surviving one of the most if not the most brutal correction in crypto’s short history. The fact that you are still in the fight demonstrates that you are a different from the average investors or as Crypto Kirby calls them, “moon boy montgomery’s and James at the watercooler”. Taking a glance back at all the people in crypto during 2017 and how so many of them have slowly dissipated. As the market continues to capitulate well into December 2018 with true capitulation possibly still ahead of us, many of the weekend warriors have gone away and only the most dedicated have been left standing.
I will not mention the handful of cons in this market who at this time last year had thousands of followers all over social media and have since been outed or disappeared, but I will share some of the channels I believe are great or at least worth a look . The first recognition I want to give and also ask where has he gone? Is to the Youtube channel Coin Mastery, this channel was one of the first I truly dedicated myself to watching as it only presented the facts and realistic scenarios for the market and how it affects you. Unfortunately the channel at the time of writing has not uploaded new content in 2 months and has left me wondering if it will ever return. My current favorite channel is Crypto Kirby who is all about the technical analysis. No emotion and no speculating. This is a no nonsense channel which has been using technical analysis to guide his viewers through the bear market which he has been calling since the peak in early 2018, his shorts have been prosperous for anyone subscribed and it is surprising he does not have a larger following which is somewhere around 30K on Youtube at the moment, but I guess there is something to be said about those who speak truth to power and don’t just fill people’s heads with illusions and pump shitcoins. A couple new channels I have learned to trust and like include Chico Crypto and much smaller channel Crypto face. The latter of the channels focuses on technical and Chico on the fundamentals as well as covering news. Some other channels worth mentioning but I have found to be less honest but not to the extent of intentional malice are DataDash, which overall is decent but having made several wrong calls throughout 2018 he is now rather vague in analyzing the market and has evolved into covering all markets in general and how they can potentially influence the crypto space. Crypto zombie is another growing channel with decent content but this is all stuff anyone can find by opening up Cointelegraph and CCN. Some I try to stay away from but do watch from time to time to gauge market sentiment as they do have bigger followings are Suppoman and Boxmining. Two guys to definitely stay away from though are Trevon James and Craight Grant, big time Bitconnect shillers.
It is amazing that some one like Trevon James continues to put out content despite his history but I guess in a market with such little attention span, there are always new players he can con into another of his pyramid scheme coins. Aside from Youtubers there are so many other useful resources in social media it is difficult to talk about them all with some needing there own personal review. The market which was once saturated with moon boys promising million dollar bitcoins by Q4 2018, has dwindled down to a few poop coin Patricks (Crypto kirby) and many more real market players. If you are interested in some of the names or handles of these people feel free to contact me through any of my social media outlets.
With no clear site of where the bear cycle will end one has to begin to get out of their comfort zone and explore opportunities within the market to make profit not only when things are headed up but also when markets are heading down as all market’s experience bear trends. For the most part anyone getting into crypto learns to buy crypto and hold it till “The moon”. The problem is that most don’t know what the moon looks like when they get there and completely miss the opportunity myself included. So the only play you have left when you finally realize the market is falling is to sell your coins tether it or cash out what you have and wait till the market swings back and cost average new purchases buying on the dips. But even then saying that most people can think two steps ahead to do even this is really wishful thinking. The truth is once people are on a sinking ship they tend to try and ride it out which in the long wrong pays huge rewards but that is if you have years to let your investments play out and or if they are placed in poor assets go with the ship all the way to the bottom. It is better to study other options which do exist. Some of these options which most know about but when you don’t understand something you fear it or give a million reasons why you won’t do it because of the same old fear is shorting the market and the use of leverage. Truth is like most people I have known about Bitmex for a long time, but when things are going well it is not necessarily appealing or necessary. All you hear about leverage trading is how dangerous it is and how it can destroy all your holdings if things go the wrong way. But like most exaggerations it is just not true. Although leveraging can be dangerous, as can anything done in excess, it can also be a great tool which once understood allows you to make good profit while only risking a percentage of your assets. In order to use something like leverage on Bitmex or Deribit though, you have to study and practice practice practice. Jumping right into it blindly like most things will get you rekt. Bitmex has allowed me to play the market during this bear trend and continue to increase my BTC position as most retail buyers are sweating bullets every time BTC or the market takes another dive.
Just keep in mind that Bitmex is not available for those residing within the United States but Deribit is as well as Poloniex.
It is very interesting how the feel good boys in crypto for a long time declared the bottom for Bitcoin to be around $6,000. Based on the descending pattern the market has been for most of 2018 and where it always bounced on support it seemed like the most logical call at first glance. Surely enough though as the market got squeezed tighter and tighter the price broke to the bottom leaving so many shocked and exposed. The fact is that Bitcoin holding $6,000 was not very logical or practical by any means. When you look back to just January 2017 the price of BTC was floating around $1,000. Meaning that if just barely 2 years ago you had bought Bitcoin you were still in an amazing profit zone despite the “bear market”. The only people feeling the pain of the downtrend are those who FOMO bought on the way to $20,000. Anyone who had bought in late 2016 and before have not been worried about the price. But think about how realistic it was for an asset to jump from 1k to 6k in 2 years and not only hold but that would be the new support? Very unlikely. Although 6k held for several months it was inevitable that a drop was coming per “Classical technical theory” (Crypto Kirby) and Bitcoin would have to make a retest of previous prices before being able to turn things around and head back into a bull market, that means flirting with prices which could see BTC hit sub 2 thousand dollars. As markets begin to dip Thousands of “long time” BTC holders will begin to sweat and sell at a profit still causing massive capitulation and chaos in the market. Many smart investors will begin to look to long fish positions were as they will place insanely low ball buy orders which at a time of massive capitulation and an over selling of a market would begin to fill orders at insanely low prices as those are the only orders left in the book.
So prepare yourself for the next couple of months. If you are active in the market put yourself in a position to profit from the downtrend. The market will eventually turn, but it will never be when you want it to. It is possible we will not see another bull run for a year as the market looks to stabilize after months of lower highs and millions now turned off to crypto after getting burned and doing the typical human response and blame the market not themselves. “It’s all a scam” is one of several things thrown my way after a few friends found themselves losing money and pulling out at a loss. A new wave of retail investors will have to come around at the same time as institutions to pull the market back, and it will happen. The only question is when. In a previous article I wrote The Hypocrisy of Crypto & the Arrogance of our Community, I cover all the reasons I believe that cryptocurrnecy is being held back from mass adaption by it’s own community. But I only believe it is slowing it down not stopping it.
The value of what this market brings to the world is not only not understood but I would say underestimated even by the most hardened believers.
The market will turn around and possibly reach higher highs then ever before. There is not doubt about that, but you must prepare yourself for all possibilities. There are resources everywhere to help keep yourself informed and paying for pump groups or call channels Is not necessary. Many times Youtubers have their videos out which literally give you their calls and then charge you for VIP so they can spoon feed you what is already out there and you just have to use your head a little bit to work out. Scammers are everywhere and will never stop, like in the real world. Take time to study up on what really matters in the market. Having charts up to look at are a necessary part of the game but it is pivotal you understand what you are looking at. Unless you are day trade scalping it is not necessary to stare at a chart all day long as it is bad for your health and mental state. It’s even more unnecessary really to look at 5 minute candles which are meaningless in the grand scale of things. For the most part anything less than 4 hour candles is useless with 1 hour being ok if you are doing swing trades or intraday trading. I began to become profitable when I began to zoom out and look at the overall movement of the market. If you are going up on the daily candles then you will more than likely be ok trading within that time frame, but if you are on an overall downtrend and you are trying to fight the trend within a smaller time frame, you will most likely get destroyed. “The trend is your friend”. Another thing to remember is just because you are given the option to 100X leverage, does not mean you should do it. Leverage trading and shorting deserves it’s own article and clear breakdown but I will say that up to 5x is reasonable and 5x still gives you a lot of wiggle room so you do not get liquidated so easily. Look to jump into some alt coins which have real apps and are paying in their tokens for simple tasks. I have downloaded and actively using several which in the end might be flops but it does not hurt to try. Several of them have allowed me to withdrawal and I have actually made money on.
In no particular order these are some of the apps paying out I am active on for Android. I’m not sure what is available for IOS but I can say that I have looked up most of these for IOS and none of them are available.
- Electroneum : A “mining” app for your phone. REFERRAL CODE: 79E62F
2)MinexBank : MNX as token which allows you to “park” the coin and make up to 70% interest just by holding, they also have a crypto debit card coming out soon.
3)Kinit: Earn kin for taking quizzes and participating in surveys.
4)Lumeos: A polling appealing
5)CoinClub: pays you CCU to read, write, share and comment on crypto articles and participate within it’s community. INVITE CODE: W9AC40
5)Kinnny: Not sure how it relates to Kinit but it does and it basically does the same thing.
6)Storm Play: Earn Bolts for taking surveys as well as giving movie reviews and downloading and playing different games. One of my favorite apps for sure.
7)Bitcoin Crane: Pays out Satoshi’s in exchange for watching videos.bitcoin.crane.money&referrer=coincoderef5f5ada585903b3fe
8)ClearPoll: another polling app
Cindicator: a predictions app which pays out CND.
Bitmex Referral Code: https://www.bitmex.com/register/Kh50ui
*Please use the referral codes that I share as it helps me a lot. I am by no means rich and want to continue to put out quality content for everyone.
These are just a handful of apps I have experience with and feel free to share any I have not included.
Lastly in preparation for the next bull run many people have been asking around social media, what projects are looking good, what coins will 100x? Well no one know’s what coins will 100X and those who claim they know or even hint that idea by pushing a specific project are liars and should be avoided...period. There is only one thing that is sure, whatever projects and coins are around right now with active development teams and future plans in the works have a good chance of being around in the future. There is something to be said about that fact that Bitconnect’s roadmap literally laid out there future milestones all the way up to when they went belly up. Make sure that the project as well as being active has real attainable clear goals in the coming months and years. But since this is not even the bottom we do not know for sure how many more projects are yet to fail as money continues to drain out of the crypto space. I have my own personal projects I believe in and have money in but will not share that here and may leave it for another article. A couple projects I am looking at and have yet to put money in though might be a surprise. Despite SIRIN labs putting out the “first” blockchain phone, I don’t believe they will be as successful as they wish as the extent of their claims to me seem a bit exaggerated and for the retail buyer a bit pointless. The average consumer is more concerned with the amount of pixels in a phones camera than the ability to access cold storage within their phone. Pundi X on the other hand has long term plans and have demonstrated prototypes of what I believe is a truly revolutionary phone which will not require contracts with the cellular cartels and allows users to make phone calls using nodes within the blockchain. But the definition of a “true” blockchain phone is up for debate and I do not know which of these projects will ultimately succeed yet I hope both do. Pundi X is aiming to have phones ready for order in Q2 2019, something I would be interested in purchasing if it does everything they claim.
There are several other projects with real products being drawn up for the future but that should be addressed individually as well, so in short when looking where to invest. First, wait for the bottom. Before the bottom hits, research, find out what projects you like and vet the teams. Find out the extent of their internet presence and if they are participating in any conventions, meets or other crypto events. Jot down a watch list of 20 and observe the price movement on the coin from the daily prices of the coin to volume movements. Within those 20 pick 10 who are still around at a reversal of the markets and diversify within those 10. Again this is not financial advice it is just a tactic I use and has proven to have worked in the past with 7of 10 projects I got in during the ICO stage taking me to profit. Although this is not speaking about ICO’s it can be similar as the price points for projects right now leave a massive room for growth when we get bullish sentiment in the markets again.
Take some time to look at how long the corrections have taken after massive runs in Bitcoin’s price and you will see the correlation between the higher the price run the longer it takes for the market to recover. Hence the name, the Bigger the Bear the Bigger the Bull. With the biggest correction on Bitcoin’s history saw a 87% drop from the ATH at the time, we are only at 79% meaning we still have another 9% to go and more likely further as the rise that preceded this dump was substantially greater than before. We may be in for a couple more months of negative markets followed by many more in price discovery. Don’t panic to buy in if you can wait, wait. Bitcoin has proven time after time that after a correction it comes back and grows stronger and with my belief that the next BTC bull run will coincide with the next BTC halving in 2020 we will see not a doubling of the ATH but even tripling and quadrupling, we are talking about a 100K in Bitcoin. Meaning if all you want to risk is buying 100$ in BTC when it touches 2K, what will that investment turn around to when it reaches 100k?
The only thing sure here, is that Bitcoin and crypto is definitely not dead.
Douglas
Napoleon Trading
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