Thread by @btc_charlie

*How I trade & manage positions *

I am lucky enough to have the time to be able to dedicate myself to different ways of extracting value from this market.

So a little thread... here goes !

Roughly, it’s split equally like so:

-Scalping low timeframes (25%)
-Swing trading alts (25%)
-Investing in low market cap projects (25%)
-Holding spot BTC and ETH (25%)

I’ll cover each and some of the things that I think are key / I’ve learned.

Scalping

I think scalping really is what attracted me to trading in the first place. It’s a constantly evolving video game with a real prize at the end. As a former international counter-strike player, this has always appealed to me.

I have built a couple of systems that have low hit rates in normal conditions (35%~) but offer 4R+ trades; so on balance, I make money over time.

I enjoy being able to scan the markets, look for setups and extract profit quickly.

I roll these profits into cash or investments; I rarely increase my scalping bankroll because I can’t handle it. That’s my weakness, and I’ve just accepted it.

This isn’t for everyone though, as it requires time, dedication and frankly some psychopathic tendencies. You need to be able to switch off your emotions, and LTFs can be particularly punishing. The time drain and learning curves are huge too.

Learning to lose was hard...

Swing Trading Alts

This is very market cycle dependant. When $BTC is on a charge (up or down), I have no interest in alts – apart from scalping USDT pairs.

I have been doing less and less of this, and I’m just sat in a few positions ($RUNE, $DOT, $RSR) and letting them ride.

Simple trend following systems work best for me here, as the crypto market is so cyclical.

That, and relative strength (not RSI) to other projects. e.g. the $YFI play at the start of DeFi and $SUSHI at the alt lows for hopping on strong alts.

I play the typical market cycle of BTC -> majors -> mid -> low caps as well, but in my opinion majors and mid caps are really starting to move together. The DeFi run is proof that mid-caps will start running regardless of cycle; so it’s important to play strength.

Investing in low mcap projects

I had a stint in corporate finance (M&A) and it gave me good insight into company valuations and carrying out DD. It’s made me fairly risk averse in terms of yolo’ing into “BEERCOIN” or some other trash that 100x’s; but I am here for steady returns

Some of my low cap investments like $RFUEL, $XED, $TVK etc. I have multi-year time horizons on. I take partial profits at certain multiples (all dependant on the project and investment plan).

I did a ~20 page investment plan for $TOMO, to put things in perspective.

All of these are on a “happy to go to $0” basis.

“But you’re a trader?!” I hear you say. Yes and no. In this aspect I am an investor. How often do you check your pension statement?

This is what this is to me.

I need one of these investments to do a $RUNE and my great great grandkids will be financially free.

Higher risk, but higher reward.

Holding Spot BTC and ETH

I feel I have to be exposed to both BTC and ETH. Similar to low caps, I am an investor in each.

I have a poor record at scalping both, so I don’t bother. ALTs are far easier to play for me personally.

I DCA into both with trading profits, and I’m just building my stacks.

https://twitter.com/btc_charlie/status/1327199655885672453?s=20

I cover both BTC and ETH exposure with options so I can sleep at night.

Something I can thank @zerohedge_ for teaching me.

Re-balancing

I don’t consciously rebalance. My cycle is simple.

Scalping profits -> one of the others or cash.
Swing trade profits -> btc/eth/cash out
Low mcap profits -> low mcap projects (keep planting seeds)

If there’s a lot of exciting projects coming up I want to get involved in, I’ll put more funds that way. If the pipeline is pretty dry, I’ll cash out or look for more swing trading opportunities… but dependant on market cycle.

For tax purposes I haven’t ever made money 😬

Position Management / Review

I journal everything. I was an accountant, so this is natural for me.

I review all of my scalps, sometimes even record them and review.

Swings are logged separately, as are investments.

My BTC and ETH stacks just grow, because I fully believe we will see $300k+ BTC in a few years; but that is my BET.

I have an honest review with myself every month, and a friend who we have “open book” discussions with to keep ourselves honest. That really helps.

Tips

The simple one - never bet more than you can afford to lose.

I say bet, as all of this really is highly speculative and you need proper risk management - or acceptance that your BET can go to $0 (e.g. a uniswap shitcoin). Do not over-expose yourself.

When you have conviction on projects that has high risk/reward – bet big.

Knowing a project is great and being able to see things others can’t is what makes a great investor. But balance that with patience; knowing it’s a long game and it’s not going to 100x overnight.

Journal everything and review it.

The best thing to ask yourself is “was it a good trade”? Not a winner, but a good evaluation of the information you had available at the time. If not, why not? Learn. Improve.

Know yourself. If you don’t have the time, don’t scalp.

If you aren’t comfortable losing 100% of your investment, don’t go to uniswap low caps.

Think things through and HAVE A PLAN for every scenario. $BTC goes to $20k in one candle. How devastated are you?

Probable? No. Possible? Hell yes.

Understanding your emotional responses and playing them through is under-rated imo.

Most of my trading struggles have been emotionally driven, rather than technical/capability driven.

Take profits – even if it’s partial. I closed DOGE at 0.05 or so. It went to 0.08. “Oh no I missed money”. Yeah but you gained $XXX. Don’t get me wrong, I still feel the burn of this (don’t even mention $SHIB to me haha)… but that’s part of the game.

Market cycles are king. Knowing when to play alts, btc, or sit on your hands and protect capital will make you more money than most fancy indicators/strategies.

Ignore the noise – particularly twitter. Your money, your risk, your reward. No one is going to bail you out.

At the end of the day, you gotta do you and find something that works for you.

Anyway, I hope you enjoyed an insight into how I view this market and trade.

I take this very seriously despite the pepes and memes as we're playing with real money!

My DM’s are always open, and if I can help you – I will (but don’t ask for money).

With love,

Charlie 🍻