What is a whale & how do we ride them?

in #trading2 years ago (edited)

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There seems to be some confusion about the answer to this question. When I first joined Steemit 15 months ago I had never used fish terminology before and was also pretty confused for a while. So, I would like to clear this up and teach you one of the many ways to benefit from the actions of whales.

The idea was popularised by Bitcoin

Giving birth to some very rich players in this game, they quickly became referred to as whales (possibly by the gamers before anyone else), while the ocean in which they swam was the overall marketplace. Naturally, the terms dolphin & minnow grew from this idea.

Here on Steemit it DOES NOT relate to the REP NUMBER

I mention this because I have been called a whale by many due to my 71 rep. Sadly my friends, I am no whale... yet!

With under 2000 Steem in my wallet I suspect I am not even a dolphin. Though there are no hard & fast rules about this, so you can call yourself whatever you feel like!

And others will refer to you as they choose, but ultimately it relates to how much wonga you have and nothing else.

Riding the whales

Only whales have the kind of money required to manipulate markets. They do this by forming a group and strategically invest huge sums into a coin of their choice creating a massive spike in value. The rising price will attract fish of all sizes to invest. But at the given moment, the whale group will all sell at the same time and the price will crash back down again to its actual value. This is called a pump and dump.


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We are riding these whales when we jump on board this rising price. The tricky bit of course is knowing the right moment to sell. Many times it appears as if the turning point has been reached only to find that moments later, the price continues to shoot up.

FOMO - Fear Of Missing Out

This is what drives the market in moments like this. No one wants to miss out right? So we ride those whales always hoping the price will continue rising. It is this feeling which prevents us from selling at the first sign of a dump. We might be wrong in our judgement of the situation and miss out on the chance to increase our profit further.

HODL - Hold!

Someone misspelt it years ago and his mistake went viral, leaving it as a commonly used term. It is used by traders to indicate they are holding on to their investment.

FUD - Fear, Uncertainty & Disinformation

The market is often fuelled by 'fudding' gossip and one should be wary of people who claim to know what the future holds.

How to play the whale riding game

The strategic whale buying will begin some time before the big pump so keep an eye on the volume as well as the price. The two figures are usually listed alongside each other, as you can see on Bittrex.

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If you are looking at a relatively stable coin which hasn't done much recently and you are seeing a steady increase of volume, this is a strong indication something is about to happen. In an ideal world you want to buy as early as possible before any kind of pump begins. In reality this is hard to do without insider information so you will have to use your intuition if you are going to maximise your investment.

Look for 'buy walls' which show large investments as the whales accumulate their stock. The 'candles' will look longer than usual... more like walls.

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If the upward trend continues in an ever more vertical direction it is headed for that big pump so keep your eye on the line...

When to sell?

The key to happiness is not being greedy. Ignore your FOMO feeling and sell when you have made a profit. If you wait to try and catch that perfect moment to maximise your profit you may see a sudden sharp drop and by the time you have been able to sell, more often than not the price is lower than the one you could have sold at ten minutes earlier.

Personally, once I have sold I will stop watching the line. Best to focus on that content feeling knowing you have made a profit than watch the line continue to rise with the feeling you could have stayed in for longer. The danger is that this feeling may get the better of you, leading you to buy back in... just at the moment the coin gets dumped. Then you will be kicking yourself all day!

Troll Boxes - public message boards for traders

It is worth watching the troll boxes on the marketplaces. Poloniex has a pretty active one where you can read the new speculators discussing where to throw their money. As someone who is new to this game, I have learned much from reading their conversations. But be conscious of the fudding. Sometimes people are placed strategically in these troll boxes to mislead us!

Conclusion

In the end you must trust your instinct. To many the best description of this game is gambling.

On a personal note, with zero experience as a trader I have been able to live from Steemit posts & trading for the last 7 months.

Hope this has helped in your understanding of whales and how best to ride them.

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Personally, once I have sold I will stop watching the line. Best to focus on that content feeling knowing you have made a profit than watch the line continue to rise with the feeling you could have stayed in for longer. The danger is that this feeling may get the better of you, leading you to buy back in... just at the moment the coin gets dumped. Then you will be kicking yourself all day!

On a final note it is worth watching the 'troll boxes' on the marketplaces. Poloniex has a pretty active one where you can read the new speculators discussing where to throw their money. As someone who is new to this game, I have learned much from reading their conversations.

And your point is? How does copying my text into a comment earn you $0.27?

Something very wrong with Steemit if this is all you have to do.

What's going on @good-karma ?

I was thinking the same thing!

Seriously?!

term whale in bitcoin is most likely derived from gaming
https://venturebeat.com/2013/03/14/whales-and-why-social-gamers-are-just-gamers/

or gambling

https://en.wikipedia.org/wiki/High_roller

also on your point on buying during uptrend isn't proftiable in the long run you will lose money

as the old adage goes buy low sell high

so you want to enter markets during lull periods before action as happened and HODL until sell

also never take advice from trading trollboxs nearly all is FUD and manipulation tactics especially on poloniex and rep system is fake with heavy fudsters repping each other up early on so that being pink means nothing and mods do very little against.

Wow! Thanks for this! As a newcomer clearly I am still learning. I will make a few adjustments to the post now as not to give anyone bad advice...

@isacoin,

That's why I miss btc-e.

The trollbox was hilarious!

And many years ago while trading on btc-e, I did a stealth ride in the wake of some whales during the biggest LTC run (up to that point LTC's history). Then I immediately arbitraged on some follow-on exchanges (mostly foreign).

That was all GREAT fun!

Namaste,

JaiChai

Great Post. Really enjoyed reading. Thanks for your precious advice on selling. Will try to follow your advice on selling, but, its easier said than done :)

For sure! Easier said than done...

Happy trading :)

Personally, once I have sold I will stop watching the line. Best to focus on that content feeling knowing you have made a profit than watch the line continue to rise with the feeling you could have stayed in for longer. The danger is that this feeling may get the better of you, leading you to buy back in...

I know that feeling of re-entering the market, mistakes in trade are paid with money

haha! Me too my friend. I know that feeling all too well now, which is why I thought to mention it ;)

Wow great to know that you are living in Bali, @samstonehill. This is very useful post for me, allow me to resteem this post.

Thanks. Absolutely, you don't have to ask permission to resteem ;)

Just go with your instinct. If you found it useful, perhaps other people will too.

Good simple explanation here, hopefully one day my fins will grow bigger, my tail a bit longer and I too can join the ranks of whales haha

haha! That's why I called my FB group Aspiring Steemit Whales & Dolphins.

We all hope to grow our fishy forms ;)

Great article. I hope you're doing well and being safe with the eruption of the volcano.

Thanks! All safe here for the moment. Wind direction still good ;)

Ah, the whales who control the markets. Day trading is an exciting game, but dangerous. You explained that well. Good post!

Great post thanks @samstonehill perfectly explains the concepts I've been struggling with

How are things going there, matey?- hope everything is ok for you.

Everything great thanks. Wind direction good, no volcanic ash in the air.

Hope everything is good with you!

the continuation from the last post of yours? Lets see how Btc doing, and the dragonslayer goin.
do you think the SBD price is the sign of pumping now?

The Steem & SBD price inflation relates to a Korean marketplace called Upbit. Our two coins have just been launched on this market, creating a lot of speculative investment. So there is a good chance they will come back down some time soon. Especially SBD which is designed to be pegged to the dollar.

This is a really good perspective to take - to be happy knowing that you made a profit instead of worrying that you could have made more.

But I still want to watch so I can get a feeling of how high and low it can go!

In all honestly this is the hardest bit for me. Not peaking at the line after selling. I just can't help myself sometimes! But am very conscious that what I see will dictate how I feel... and I don't like having my feelings controlled by a digital line ;)

Very good point!

thanks for clearing up the "fishy"story. I was always confused about how they determined that. My personal feeling about "gambling" in any aspect of life - "never gamble with more than you can afford to loose".

Good advice! Forgot to mention that ;)

Thanks for sharing! A link to your post was included in the Steem.center wiki article about Whale. Thanks and good luck again!!

Cool! Thanks for that ;)

too many acronyms for me but useful info thanks!

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Wow!, I was a bit lost with some terms. I've checked this post more than twice becouse it really helps me to understand many other posts and coments!! Thanks for the post!