What is Trade.config?
The Trade.config series goes inside the minds of traders to learn their strategies, preferred tools, habits and mindsets for success – to download their “configuration file”.
Each Trade.config post is an interview with a top trader. Our goal is to give all traders the benefit of each others’ experiences. After all, there isn’t enough time in the day (and money in the account) to make every mistake yourself.
No part of this piece is financial or investment advice, and all opinions shared within belong solely to the interviewee and do not necessarily reflect the opinions of Cryptowatch or any associated entities. Full disclaimer here.
Trader Pseudonym: H.A.A.
Trading Style: Short term scalping, mostly intra-day with some 1-3 days Assets Traded: XBT/USD Perpetual Time Trading: 8 years in traditional markets, 3 years in crypto Monitor Size: 13" Macbook Pro with 21" external monitor
How did you get started in trading?
I began my trading journey in 2012 in the traditional equities and mutual fund markets. My first purchase was a few shares in a socially conscious mutual fund (Pax Fund) and a single share of Tesla stock, which I sold one day later for a $5 “profit”. This is when I learned about broker commissions and the concept of a trading “round trip” – going in and out of the market and paying commission on both trades – which took out my actual profit on that Tesla trade.
In one sentence, how do you analyze the market?
I review important price chart structures on the weekly, daily, and 4 hour charts as well as the 50, 100, and 200 day moving averages, and couple that with intuition on liquidity and market sentiment.
What strategy/strategies do you pursue in the market?
I scalp quick reversals and liquidations with leverage, using simple and time tested indicators and strategies like moving averages (7, 25, 50, 100, 200), EMA Guppy, and Volume Profile Visible Range nodes.
Which assets do you regularly trade? Are there any assets you will never trade?
I primarily trade Bitcoin (XBT) on leverage. I never trade low cap altcoins, and steadily avoid both mid and large cap alt coins as well. I use fundamental analysis to choose what to trade, and technical analysis to choose when to trade it.
Who or what taught you the most to aid in your success?
The amount of resources available to a student of the market these days is incredible. My entire journey has been self-directed and all knowledge self taught from public resources on the internet: YouTube, Reddit, Twitter, Discord. Some YouTubers that helped me learn more about the industry back in 2017: DataDash, BoxMining, Ivan on Tech, and Cedric Dahl.
CryptoCred has been an extremely helpful crypto analyst as well. He has published numerous Medium articles and YouTube videos that have completely revolutionized my thinking on trading and the markets. His work on “liquidity blocks” and “institutional order flow” has helped me a lot. I also enjoyed the videos of Chris Dunn, and Anton Kreil.
Books written by traders have also been extremely helpful in gaining context. Some of my favorites are:
What tools and exchanges do you use to analyze, chart, and execute trades in the crypto markets?
First tool is Cryptowatch – I keep the homepage open so that every time I open my browser, I get a quick snapshot of the entire market. I love the Liquidity Bid and Liquidity Ask columns in the Asset table, and the columns in the middle showing the change over different time-frames to see momentum and overall market sentiment. Everything on that homepage is relevant, with no fluff.
The second tool is TradingView. I like it for charting given the extent of the customizations available.
What’s a not-well-known tool you rely on?
Tensorcharts. It allows visualization of the orderbook and tracks BitMEX liquidations – which are often important events for short term price movements. Having the order book laid out visually over the price chart suits me well.
What data or market analysis tools are missing in crypto that you wish you had?
Better data on visualizing orders in the market. Humans are visual creatures and can process this data very easily and with higher precision.
What are your go-to indicators?
Bollinger Bands, RSI, Pivots, Volume Profile Visible Range (VPVR) – they all intuitively make sense to me. They’ve also been heavily back-tested in many asset classes with success. Many traders who come to crypto from other markets use these tools when trading crypto, making them a bit of a self-fulfilling prophecy. I paid $300 a year just for Volume Profile Volume Range from TradingView because I knew it would help my trading so much.
What does your chart analysis look like?
Set up 1 – Day Trading and Scalping
Indicators: Bollinger Bands, RSI, Connors RSI, VPVR
Set up 2 – Swing Trading
Indicators: Pivots, Zigzag, VPVR
Set up 3 – Long Term vs Short Term Trends
Indicators: EMA Guppy (EMA 3,5,8,10,12,15 / EMA 30,35,40,45,50,60), VPVR
Set up 4 – Important Macro Moving Averages
Indicators: MA 50,100,200
Set up 5 – Clean and Simple Price and Volume
Indicators: Volume bars
Which exchanges do you monitor or trade on? Why?
I like to trade on leverage in highly liquid markets – so BitMEX suits me. I monitor large spot exchanges as well: Kraken, Coinbase, Binance, and Bitstamp.
Are there tools beyond charts you use in your analysis?
Is Twitter a tool? In 2016 and 2017, I used Twitter for education – following big traders, hearing about the markets, seeing what tools traders are using. Twitter is where I discovered Volume Profile. Now I use Twitter for market sentiment and updates on the industry itself, like new product releases from major exchanges.
What routines and habits help you improve your trading?
Operate with patience and stillness. Meditation and mindfulness training helps with this. It also helps to verbally reiterate what I am attempting when putting on a trade, and to review the result of a trade once it’s closed out. My trading log is segmented, since I restarted every time I blew up my account – I didn’t want all those losses staring me in the face, especially because I tend to be a “revenge” trader, taking bigger risks to get out of losses.
In my trading log, I record my entry price, predicted exit price, leverage, volume traded (plus overall volume traded that day), and a note about my emotion at the time of entering the trade. I also keep a checklist of things I have to review before submitting the order – which includes the weekly, daily, and 4 hour chart, as well as the 50, 100, and 200 day moving averages.
What advice would you give to a new trader about how to approach the markets?
Don’t use leverage when you’re just starting out. Begin to build a framework for analyzing the markets, then commit to constant learning and iteration of your process. Don’t take on a bunch of risk before you know how you’ll react to it and how to manage it within a process.
What’s the hardest lesson you learned about trading? How did you learn it?
You will make the same mistake over and over again until you can’t afford to make it anymore. You will make brutal mistakes and they will cause immense financial and emotional pain. There is no way around this. This “death by a thousand cuts” destroys your ego and repeatedly invalidates your excuses.
What should someone never do in order to help them be successful, or at least avoid failure?
Never blame the market or others for your losses or oversights. Take full responsibility for your own education, analyses, and trades.
Walk us through your path to learning your personal style of trading.
I try to take short duration positions in the market in order to capitalize on quick high-likelihood price events. When I first started trading, I made a lot of money on margin very early on. Those wins really blew up my ego – and whenever I took a loss, I took more risk to try to recoup that loss. Naturally, I ended up blowing my account a few times. Through those losses, I learned to trade with the same style but a lot different mechanics and more checks.
Walk us through the best trade you ever made.
The best trade I ever made was probably my first ever positional long-term trade, which was a chunk of Apple stock in 2014. I funded my first brokerage account with money I received as a gift for graduating, and I put it all in Apple. When I sold some years later, it was up nearly 100%. Just by holding.
Walk us through the worst trade you ever made.
Nearly every trade I made in December 2017. Those who were around know this was a golden bull run of historic proportions. I made every mistake in the book and was overrun with emotions and greed. After seeing my portfolio nearly 10x in under a year, I went risk-on: made insane bets and continued holding positions I should have cut. Some trades I should have just held on to, yet others I held on to way too long. This goes to show how important flexibility in thinking is when trading. What works at one point, will not work at another.
What do you think will be the next hot development in crypto trading products?
One stop shops. A single platform that you trust which allows for trading, staking, lending, charting, data recon, hedging… all on one platform.
Do you think we’ll have another alt season?
Yes. I think people with a lot of vested interest in alt coins have massive incentive to fuel another massive pump in order to dump their bags on the next wave of retail. My belief is that alt coins, being lower market cap, are more susceptible to swings. And retail traders will come to them again and again because many are flashy and well-marketed.
What’s the most overvalued coin in the market right now?
I believe all coins other than BTC are overvalued today. I especially think this about certain “top 10” projects like EOS, ADA, TRON and NEO – because of the simple fact that they don’t do what they were created for, and their market cap is built on massive amounts of speculation.
Questions for H.A.A.?
If you have any questions for H.A.A., leave a comment and we’ll see if we can get them answered.