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 Name: Kevin Svenson
Trading Style: Long term accumulation Assets Traded: Bitcoin Time Trading: 5 years Monitor Size: 21.5" inches Nearly Broke: In 2014, trading penny stocks Follow me on: Twitter @KevinSvenson_ and YouTube Kevin Svenson
How did you get started in trading?
My interest in investing & trading began when I was in college in 2014. I was trading penny stocks that were priced lower than a penny. My first profitable trade I made by buying a penny stock at a fraction of a penny with $90 and selling my position for $900. The ability for me to make a return like that really caught my interest.
In one sentence, how do you analyze the market?
I spend an ungodly amount of time watching the market move, which allows me to gain an instinct for it. When I implement technical analysis on top of that it gives me a much better sense for market direction.
What strategy do you pursue in the market?
I mainly focus on trading macro trends, using long term accumulation strategies. That is how I extract value out of a market consistently. In my experience, short term trading strategies are extremely difficult to develop and stay consistent with.
One strategy I love to follow in crypto is to wait for the market to become extremely emotional. When people are extremely greedy (i.e. “new paradigm!”) or extremely fearful (i.e. “Bitcoin is dead!”) is when the largest opportunities present themselves. This happens often in crypto.
Which assets do you regularly trade?
For cryptocurrencies I almost exclusively focus on Bitcoin. Bitcoin is the driving factor for the entire cryptocurrency market, and it determines the market direction for almost every other cryptocurrency. In 2018 there were some alt-coins I was buying, such as Chainlink, and in the 2018/2019 bear market, I was shorting Ethereum. The future of the crypto market definitely has room for alt-coins, but for now it’s really all about Bitcoin.
Who or what taught you the most to aid in your success?
The most beneficial thing for me was time – spending as much of it in front of the charts as possible. I truly believe there is no easy way to learn trading and market analysis – it just takes time living and breathing the charts.
What other traders/advisors/analysts do you follow and why?
Erik Crown from Krown’s Crypto Cave is a great trader to follow due to his agnostic view on the crypto market – he looks at things very objectively. I respect that a lot. Many traders and analysts in crypto are extremely biased toward one direction or viewpoint, and given the crypto market is one of the most volatile markets in the world, you will not survive as a swing trader with a bias. If you are interested in short term swing trading and scalping, Eric is your guy to follow.
I also like to follow Sunny Decree for his overall knowledge on the fundamentals of the crypto market and crypto news. He is constantly keeping his viewers up to date with the industry, which is good for keeping your eye on the long term.
What tools and exchanges do you use to analyze, chart, and execute trades in the crypto markets?
I have been exclusively using Cryptowatch since 2016 to analyze the crypto market and all crypto assets. Cryptowatch has been a fundamental part of my journey throughout my career in crypto. It fits my personal taste from the layout to the depth of the featureset. I find the SMS alerts convenient for when I leave the house, and I can buy and sell from the Cryptowatch interface without having to log in to my exchange accounts. I don’t need to use anything else.
What’s a not-well-known tool you rely on?
The parabolic stop and reverse indicator (aka “ParSAR”) is an indicator that works really well for forecasting market direction on the weekly time frame for Bitcoin. It’s an indicator that I don’t see many people use consistently when trading crypto, but I have seen it prove itself for analyzing Bitcoin, which tends to trend in one direction for long periods of time. The ParSAR stays consistent on the weekly timeframe, and any reversal that shows up on the ParSAR is usually a major signal. Even though this indicator is common on many platforms, I believe it is overlooked.
What are your go-to indicators?
The 21 week EMA has been extremely consistent at calling support and resistance for Bitcoin since 2012. Even right now this indicator is something that I am looking at to determine how bullish or bearish I am on Bitcoin.
The volume profile tool is also very useful. Bitcoin is extremely reliant on the technicals so the market has strong reactions to support and resistance. Price is the only thing that matters in crypto, so knowing which levels the volume is coming in at is very useful for determining support and resistance.
What does your chart analysis look like?
What routines and habits help you improve your trading?
Practicing patience. Not every day is a good day to trade. The right opportunities will stare you in the face – any trade you feel unsure about is probably not going to be a good trade.
What advice would you give to a new trader about how to approach the markets?
You really need to focus on specific markets or assets and study how the charts play out. There is no better way to get better at technical analysis and predicting market direction than watching the charts day in & day out. Focusing on higher time frames, like one day and one week, is important for understanding the context of longer term trends. You do not have to start trading immediately; first become familiar with the patterns and movements of the assets you want to trade. This can take multiple years to really click in your head.
A lot of people will recommend paper trading – I do not. I say that because trading with real money involves different brain chemistry and reactions you just cannot experience with paper trading. Just start off with trading small amounts.
Finally, remember that performing well at technical analysis is different than performing well as a trader. They are two separate skills that both require time to learn. Technical analysis helps predict market direction, while trading primarily involves honing decision-making. When technical analysis & good decision-making come together, you will see results in the form of profits.
What’s the hardest lesson you learned about trading? How did you learn it?
The market does not care if you want to make money. You have to flip your mindset around: you cannot force the market to make you money – you must understand when the market can make you money. As I said before, not every day is a good day to trade. It is worth waiting until you are very certain about an opportunity, and when the odds are in your favor.
I learned this the hard way by trying to force trades over and over again, and losing every time. Eventually, you either go broke or truly understand that the market does not do what you want it to do.
Another hard lesson I learned was to care less about what other people are saying. Everyone has to develop their own unique approach to trading, and relying solely on someone else’s opinion without understanding their strategies and mindsets often doesn’t work out well. Seek to learn from others, not copy.
What do you think most traders don’t understand, that if they did, they’d be better traders?
You can’t force trades. Stay patient. Just like catching a ball, you can’t run toward where the ball is at a given moment, you have to wait for it to come to you; otherwise it will go right over your head and you’ll miss it.
What’s the most common mistake you see traders making?
A common mistake I see traders make is not realizing that the market is like a jigsaw: it’s likely to come back to or below your entry price for a period of time. Putting a stop loss too close to entry means getting stopped out too easily from a trade that otherwise would have been good.
What should someone never do in order to help them be successful at trading, or at least avoid failure?
Create a set of rules for yourself. If you are not comfortable, you are probably putting yourself in unnecessary danger and/or breaking your own rules. As long as you follow your rules, you should feel relatively okay with the situation even if your position is losing. As a trader, you need discipline – if you stop following your system, you usually fail. Stick to your rules.
Walk us through the best trade you ever made.
The best trade I ever made was fairly simple: I bought Bitcoin in 2015 when the conversation about it seemed to die away, along with the price. My older brother introduced me to Bitcoin and I bought a few BTC going into October of 2015 right after the first breakout just below $500. I didn’t think much of it at the time. After a while I ended up selling some Bitcoin and bought Ethereum around $45 in March of 2017 at the beginning of the smart contract hype.
Around the end of 2017, I was in Los Angeles, and I noticed all my Uber drivers started talking about crypto – so when the price began to fall in January of 2018, I started to sell. The chatter signaled to me that everyone was extremely greedy. The run up and massive volatility showed me the power of macro trends and long term trading. This inspired me to start my YouTube channel in January of 2018, where I began warning people of the impending bubble pop.
Walk us through the worst trade you ever made.
The worst trade I ever made was attempting to trade an alt-coin called “Ardor” at the high of the 2018 alt-season. I remember scanning the Bittrex exchange during a strong alt-coin pump, and this coin caught my eye for moving probably 50% in a matter of minutes. I rushed in with around $2,000.
My trade was the last one in before it tanked straight back to where the pump began, then continued to push lower and lower. I lost nearly $1,000 in mere seconds.
This was a bad trade because I had no idea what Ardor was, and I had no plan going into the trade. I just saw the pump and went for it. I learned a valuable lesson on that one, with a high cost.
What do you think will be the next hot development in crypto trading products?
I think in the next major bull run we will see a lot more competitors entering the space to improve on trading interfaces for crypto.
Do you think we’ll have another alt season?
The crypto industry is still very immature. Right now governments and banks worldwide are looking at digital currency solutions to solve the various problems they are facing. In the future I think we are going to see corporations use blockchain tech in a variety of ways as well. The next major alt-season may actually have the ability to retain value, rather than just pumping and selling off 90% of their value. I think the next set of long lasting alt-coins might come from big corporations, which will add tons of value to the crypto industry.
Keeping up with Kevin
Follow Kevin on YouTube for regular market updates on Bitcoin. His clear and simple analysis led him to call multiple bottoms and tops throughout 2018 and 2019 and gain recognition from other YouTubers in the crypto community such as Sunny Decree.