Trading Adventure #1: From $100 to $1,000,000
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Turning $100 into $1,000,000 is a bold goal that demands strategy, discipline, and smart risk management.

Here's a streamlined approach to embark on this trading journey.

Step 1: Set Incremental Goals

Breaking down the massive goal into smaller milestones makes it manageable:

$100 → $1,000

$1,000 → $10,000

Continue scaling up until $1,000,000

Step 2: Choose the Right Market
Cryptocurrencies are ideal due to their high volatility, offering significant growth potential.

However, they carry higher risk compared to stocks or forex.

Select a market that aligns with your risk tolerance and expertise.

Step 3: Develop a Simple Trading Strategy

Use a 10% Gain Per Trade strategy with reinvestment:

Initial Capital: $100

Trade 1: 10% gain → $110

Trade 2: 10% of $110 → $121

Continue this pattern…

Growth Calculation:

Final Amount=100×(1.10)^n

To reach $1,000,000:

n≈93 trades

Step 4: Manage Your Risk

Protect your capital by:

Risking Only 1-2% per Trade: Limits losses.

Using Stop-Loss Orders: Automatically exit losing trades.

Diversifying Investments: Spread risk across multiple assets.

Step 5: Track and Refine
Maintain a trading journal to log each trade’s outcome and learn from successes and mistakes.

This continuous improvement is crucial for long-term growth.

Example Progress:

Start: $10

0After 10 Trades: ≈ $259

After 20 Trades: ≈ $670

After 50 Trades: ≈ $11,467

After 93 Trades: ≈ $1,000,000

Conclusion

Achieving $1,000,000 from $100 is challenging but possible with a disciplined approach.

Set clear milestones, choose the right market, implement a solid strategy, manage risks effectively, and continuously refine your methods.

Patience and persistence are your allies on this ambitious trading adventure.

For Reference:

Initial Capital: $100

Target: $1,000,000

Trades Needed: ~93 (with 10% gain each)

$BTC $ETH $BNB

Quant Strategies #2: Statistical Arbitrage in Cryptocurrency Trading

Statistical arbitrage is a popular quantitative strategy in cryptocurrency trading that seeks to exploit price inefficiencies between related crypto assets.

By leveraging mathematical models and historical data, traders can identify and capitalize on temporary price discrepancies.

What is Statistical Arbitrage?

Statistical arbitrage involves trading pairs or baskets of cryptocurrencies that historically move together.

When their prices diverge beyond a typical range, the strategy assumes they will revert to their mean, allowing traders to profit from the convergence.

Key Steps to Implement Statistical Arbitrage:

Identify Cointegrated Pairs:

Select cryptocurrencies that have a strong historical correlation. For example, $BTC and $ETH often show similar market movements.

Calculate the Spread:

Determine the price difference between the two assets.

Example Calculation:

$BTC Price: $30,000

$ETH Price: $2,000

Spread = $30,000 - ($2,000 * 15) = $0 (assuming 1 BTC ≈ 15 ETH)

Set Trading Thresholds:

Define upper and lower limits for the spread.

If the spread widens beyond the upper limit, sell the overperforming asset and buy the underperforming one.

Reverse the actions when the spread narrows below the lower limit.

Execute Trades Automatically:

Use algorithms to monitor the spread in real-time and execute trades when thresholds are breached.

Example Scenario:

Suppose historical data shows that $BTC and $ETH typically maintain a 15:1 ratio.

Suddenly, $BTC rises to $31,000 while $ETH drops to $1,900.

The spread widens, triggering the strategy:

Sell $BTC at $31,000Buy $ETH at $1,900

When the prices revert to the mean ratio:

$BTC drops to $30,000$ETH rises to $2,000

Buy back $BTC and sell $ETH, locking in the profit from the convergence.

Backtesting Results:

Over the past six months:

Trades Executed: 20

Winning Trades: 14

Losing Trades: 6

Net Profit: +12%

Quant Strategies #1: Algorithmic Trading for Crypto Markets

Algorithmic trading is transforming cryptocurrency markets by enabling traders to execute strategies with speed and precision that manual trading can't achieve.

Let’s break down how it works:

What is Algorithmic Trading?

Algorithmic trading uses computer programs to follow a set of rules for placing trades.

These rules are based on factors like price, volume, and timing, allowing trades to be executed automatically without human intervention.

Key Steps to Implement Algorithmic Trading:

Define Your Strategy:

For example, a Moving Average Crossover strategy uses two moving averages:

a short-term (e.g., SMA50) and a long-term (e.g., SMA200).

Buy Signal: When SMA50 crosses above SMA200.
Sell Signal: When SMA50 crosses below SMA200.

Backtest Your Strategy:
Use historical data to test how your strategy would have performed.

Suppose for $BTC:

SMA50 = $30,000

SMA200 = $28,000

SMA50 > SMA200 → Buy Signal

For $ETH:

SMA50 = $2,000

SMA200 = $2,100

SMA50 < SMA200 → Sell Signal

Execute Trades Automatically:
Once signals are generated, the algorithm places buy or sell orders instantly based on the predefined rules.

Example Calculation:

Imagine you backtest this strategy over the past year:
$BTC:

Total Trades: 10
Winning Trades: 7
Losing Trades: 3
Net Profit: +15%

$ETH:Total Trades: 8
Winning Trades: 4
Losing Trades: 4
Net Profit: -5%

Conclusion:
Algorithmic trading removes emotions from trading decisions, ensuring consistent execution of your strategy.

In our example, $BTC showed a profitable outcome, while $ETH did not, emphasizing the need to choose the right strategy for each asset.

By leveraging algorithmic trading, you can enhance efficiency and potentially increase returns in the volatile crypto markets.

For Reference:
$BTC - SMA Crossover Profit: +15%

$ETH - SMA Crossover Profit: -5%

Trading Strategies #1 - Understanding Support and Resistance Levels

I will talk about the concept of Support and Resistance in trading.

Before that, let's understand why these levels are important.

Support Level: This is the price level where an asset tends to stop falling. It's like the floor that supports the price.

Resistance Level: This is the price level where an asset tends to stop rising. Think of it as the ceiling that resists the price from going higher.

Why Are They Important?

These levels help traders make decisions about entry and exit points.

Example of Support:

Suppose Asset X has fallen to $50 multiple times but hasn't gone lower. This $50 level is acting as support.

Example of Resistance:

Asset X has risen to $70 several times but hasn't surpassed it. This $70 level is acting as resistance.

How to Use Them in Trading

Buying at Support:

If the price approaches a known support level, traders might consider buying, expecting the price to rise.

Selling at Resistance:

When the price nears a resistance level, traders might sell or short, anticipating a price drop.

Breakouts:

Sometimes, the price breaks through support or resistance levels.

Breaking Support: If the price falls below support, it might continue falling.

Breaking Resistance: If the price rises above resistance, it might continue rising.

Example Trade:

You notice Asset X has support at $50 and resistance at $70.

Strategy: Buy at $52, anticipating the price will rise to $70.

Set Stop-Loss: Place a stop-loss at $49 to limit potential losses.

Take-Profit: Set a take-profit at $68.

Calculations:

Potential Loss: $52 - $49 = $3 per share.Potential Gain: $68 - $52 = $16 per share.

Risk-Reward Ratio: $3 / $16 ≈ 1:5.

This means you're risking $1 to potentially make $5, which is a favorable ratio.

Why This Matters

Understanding support and resistance helps you:

Identify potential reversal points.

Plan your trades with better entry and exit points.

Improve your risk management.

$BTC $ETH $DOGE

Trading Psychology #1 - Master Your Emotions for Better Trading

If you want to become a real trader and not let your emotions dictate your decisions, you should read this article carefully and thoroughly.

Trading isn't just about charts and numbers; it's about controlling your mindset.

Emotions Can Be Your Worst Enemy

If you're letting fear and greed control your trades, I can safely say that you're setting yourself up for failure.

Fear can make you exit a position too early, missing out on potential profits.

Greed can make you hold onto losing positions, hoping they'll turn around, which often leads to bigger losses.

Why Controlling Emotions Is Crucial

Let's see why mastering your emotions is important.

First of all, trading requires discipline. If you're an impulsive person, I'm sorry but you will NOT be a good trader.

Imagine you open a trade based on solid analysis, but as soon as the market moves slightly against you, fear kicks in.

You panic and close the trade, only to see it reverse and move in your favor afterward.

On the flip side, if a trade is going well, greed might tempt you to ignore your take-profit levels, hoping for even more gains.

The market could reverse suddenly, turning a winning trade into a losing one.

How to Master Your Emotions

Have a Solid Trading Plan

Before entering any trade, define your entry and exit points, stop-loss, and take-profit levels.

Stick to Your Plan

The most important word when trading is “DISCIPLINE.”

Risk Management

Only risk a small percentage of your capital on each trade (e.g., 1-2%). This way, a single loss won't hurt your overall portfolio significantly.

Use Stop-Loss Orders

Protect your capital by setting stop-loss orders. This helps remove emotion from the equation.

Keep a Trading Journal

Document every trade and your emotions during the process. Over time, you'll identify patterns and areas for improvement.

Risk Management #2 - Learn to Manage Your Money Right

Today, I will talk about the concept of Risk-Reward Ratio.
Before we dive in, let's understand what Risk and Reward mean in trading.

Risk: The amount of money you are willing to lose on a trade.

Reward: The potential profit you aim to gain from a trade.

Risk-Reward Ratio: It's calculated by dividing the potential loss (risk) by the potential profit (reward). For example, if you risk $100 to potentially make $200, your Risk-Reward Ratio is 1:2.

Now, let's see why this is important.

Suppose you have a trading strategy that wins only 50% of the time.

If you risk $100 to make $100 (Risk-Reward Ratio of 1:1), over 10 trades, you might break even.

But if you adjust your Risk-Reward Ratio to 1:2, risking $100 to make $200, then over 10 trades:

You lose 5 trades: 5 * (-$100) = -$500

You win 5 trades: 5 * $200 = $1000

Net profit: $1000 - $500 = $500

So, even with a 50% win rate, you can be profitable if your Risk-Reward Ratio is favorable.

This is why managing your Risk-Reward Ratio is crucial.

Now, how do you apply this in your trading?

First, before entering any trade, you should define your Stop-Loss and Take-Profit levels.

Stop-Loss: The price at which you will exit the trade to limit your loss.

Take-Profit: The price at which you will exit the trade to secure your profit.

Example:

You are trading an asset priced at $100.

You believe it will go up to $110.You decide to set your Stop-Loss at $95.

So, your potential loss is $5, and your potential gain is $10.

Risk-Reward Ratio = Potential Loss / Potential Gain = $5 / $10 = 1:2

This means you are risking $1 to make $2.

By consistently applying a favorable Risk-Reward Ratio, you can
improve your overall profitability.
Remember, the market is unpredictable. Even the best traders have losing trades.
But by managing your Risk-Reward Ratio, you can ensure that your winners outweigh your losers.
In conclusion, always plan your trades with a favorable Risk-Reward Ratio.
Don't just focus on the potential profit, but also consider the potential loss.

Risk Management #1 - Learn to Manage Your Money Right

I will talk about the concept of Sharpe Ratio.

Before that, let's examine the concepts of Expected Return and Variance for an asset.

Expected Return: For asset A, you have calculated percentage returns for 3 different scenarios using past data and future forecasts.

As a result of these calculations, you obtained +20% in case 1, +3% in case 2, and -30% in case 3.

You also calculated 25% probability for case 1, 60% probability for case 2 and 15% probability for case 3.

In this case, Expected Return = +0.2 * 0.25 + 0.03 * 0.6 - 0.3 * 0.15 = 0.023.

So, you expect a growth of 2.3% from this asset.

Also, you need to calculate Variance using historical data.

Variance = E[(μ-x)^2], where μ is the average return.

You have also calculated the Variance and found, let's say, 15%.

Great! Now we have all the numbers to calculate the Sharpe Ratio!

Sharpe Ratio = Expected Return / Variance = 0.023 / 0.15 = 0.153.

Great! You have successfully found the Sharpe Ratio! Now let's say we have another asset and you find Expected Return of 25% but Variance of 200%.

The 25% Expected Return may seem incredibly high, but if you calculate the Sharpe Ratio, you will find 0.25/2 = 0.125.

So it is less than the asset above!

What we need to understand here is that an asset can give a very high return.

However, its Variance while providing that return is just as important.

If you do not take Variance into account, you can make a big mistake and face many bad scenarios.

For you reference:

$ETH - Sharpe Ratio = -0.28
$BTC - Sharpe Ratio = +1.00
$SOL - Sharpe Ratio = +1.16

Congratulations to everyone who reviewed, BIGTIME was a great short opportunity.

I'm going to explain a few metrics that will show you how a cryptocurrency can “fake” a rise and then fall sharply. By looking at these metrics, you can identify these altcoins and open a short position.

As an example, the altcoin we will examine is called $BIGTIME.

1. Volume decreases while the price rises: As you can see in the example below, BIGTIME rose sharply between October 12-18, 2024 to reach 0.172. Here it achieved an average volume of 1.42 billion. Then, after a period of ups and downs, the price rose sharply again in the past day and reached 0.179. However, as you may have noticed, the volume never reached the level of October 12 and remained at an average of 800 million, almost half the amount! This means that there is no more high volume inflows that could push the price higher.

2. Failure of the RSI to rise sufficiently when the price is rising: Again, between October 12-18, the price rose quite sharply and the RSI peaked at 86.97! However, in yesterday's uptrend, the RSI could only stay at 79.97 even though the price surpassed the level between October 12-18. This means that buyers at this level are now closing their positions and not allowing the price to move higher.

3. Funding Rate: I assume you know what Funding Rate means. If the Funding Rate is very high and positive, then Longs will have to pay a lot of money to maintain their position. Currently, BIGTIME's Funding Rate is around 0.0300%, the same as ETH at $4000. So the Funding Rate being too high means that the price is actually inflated by Futures, not spot.

4. OI is too high: OI, or Open Interest, refers to the total amount of positions in a coin. You can use various apps to find this OI. I want to tell you that BIGTIME's OI is currently at ATH! This means that there is an incredible amount of open positions and most of them are Long positions! Nevertheless, the lack of sufficient volume and the RSI remaining low means that this OI will crash hard soon. Because there are not enough external resources to get into this coin.

A simple pair trading idea based on the price movements of the last 1 week: ENS/AAVE

In the last 1 week, AAVE has risen by exactly 12.72% while ENS has only managed to increase by 2.13%.

In base terms, the percentage price difference change between them is exactly 10.59%, which means that AAVE has risen by approximately 11% more than ENS.

AAVE and ENS are both highly popular tokens on the Ethereum network.

Although they both have historical collinearities close to 1, they have shown some divergence in this period.

We will use this divergence in our favor and open positions thinking that this 10% difference will close.

What we need to do is very simple, for example, open a $100 ENS Long position and immediately open a $100 AAVE Short position.

If the market turns down and both tokens fall, we would expect AAVE to fall more than ENS in our estimation.

So, our AAVE position will bring us a profit of, for example, $5 because it is Short, while our ENS position will bring us a loss of, for example, $3 because it is Long.

If we close both positions at the same time, our total profit will be 2 dollars out of 100 dollars.

A gain of 2%!

If the market is going up, and both tokens go up, we expect ENS to go up more than AAVE, and in this case, for example, our profit on ENS could be $10, while our loss on ENS could be $6. By closing both positions, we could make a total profit of $4!

A gain of 4%!

One beauty of Pair Trading is that you don't need to know the direction of the market! Whether the market is down or up, if your Pair idea makes sense, you can make money either way!

I personally have $350 in this Pair Trading at the moment, I will keep you updated!

Short AAVE for 100$ & Long ENS for 100$ to join me!

How can you make big money from tokens like BIGTIME that rise very fast and instantly?

Remember that in the financial world, you don't need to buy or long anything to make money.

You can also make some pretty nice but “limited” amounts of money by shorting.

Tokens like BIGTIME are highly volatile and like to move hard.
The first movement of such tokens is noticed after they are vertically upward, and many people open short positions during this period, but such people are soon liquidated and out of the game, causing the token price to rise even higher.

What you need to do at this point is to follow the plan below:
(This example assumes you have $10,000 in total assets).
First, wait for the vertical rise to end calmly and for the price to flatten a bit.

During this sideways period, you first open a $100 position.
Then, if the price falls, you can close it at any point and take your profit.

However, with a high probability, the price will continue to make a few more vertical rises.

At this point, what we need to do while the vertical rises continue is to keep our patience and not add anything.

Then, when it flattens out again, we add another $100 and increase our position and give a better entry point.

You continue this cycle until BIGTIME's price is where you expect it to be and congratulations, your patience has paid off handsomely!

This tactic will definitely not make you incredibly rich in 1 day, but by doing it several times a day, you can accumulate large amounts of cumulative earnings.

Never position all your money on a single token!

Now I will give you 2 different scenarios, let's analyze the results of these scenarios together. (We will assume that you have $5000 in total.)

Case 1: You opened a Long position on $LDO with all $5000 in your hand. 1 day later, the news broke that the SEC was investigating $LDO and $LDO fell by 30%! Meanwhile, $BTC rose by 5% and other altcoins rose by 8%! Total loss: $1500.

Case 2: You split your $5000 into 5 parts and bought $ENS, $UNI, $LDO, $AAVE, and $PENDLE ($1000 each). 1 day later, news spread that the SEC was filing a lawsuit against $LDO and $LDO dropped by exactly 30%! Meanwhile, $BTC increased by 5% and other altcoins increased by 8%! Total change: -300$ + 4 x $80 = +20$.

In Case 1, your total loss was exactly $1500, while in Case 2, you didn't make a loss, you made money!

This is why spreading your risk is so important.

It is always risky and dangerous to invest in a single token, or to open large positions in a single token.

Manipulative news about that token can ruin your portfolio in an instant.

So, to spread your risk, always invest your total balance in at least 5 different tokens.

Since all the tokens in the example I gave above are from the Ethereum ecosystem, their long-term correlations will be similar, so dividing your money in this way will reduce your risk and will not reduce your earnings.

If you want to become a real trader and not a gambler, you should read this article carefully and thoroughly.

If you are opening 5x-10x positions with all your money, I can safely say that you are directly gambling.

With such risky positions, the probability of liquidation is very high. This is because the crypto market is a highly volatile market and 10%-20% movements are quite normal.

Even if you place a stop-loss, you will lose most of your principal in a small movement.

The most important word when trading is “PATIENCE”.

If you are an impatient person, I am sorry but you will NOT be a good trader.

Let's see why patience is important.

First of all, you should not open a 10x, not even a 1x position
directly with your principal. Opening a 1x position is no different than guessing the direction of the market by flipping a coin.

First of all, the positions you open should definitely be 5% of your principal (initial size).

At this point, if your position turns into a profit, great! In this case, you can take profit at any time and move on.

In the worst case scenario, i.e. when your position is reversed, all you have to do is wait patiently. Because your position may only affect 5% of your principal.

If your position is reversed by the first 10%, then it's time to add to your principal.

This way, you may find yourself in a more favorable position.

As the market will return to the average again, it will of course come to your entry price. (Except for exceptional tokens.)

What you need to do at this point is to wait for a while when your position is in the upside and then close your position by taking your profit.

I get a lot of questions about Pair Trading, so it's time to answer them.

1. Which pairs should we choose?

First of all, which couples you choose depends entirely on your style. For example, the tokens you choose can be from the same ecosystem or different ecosystems. They can be similar protocols or different protocols. For example, the last LDO/AAVE Pair Trading I shared consists of two different tokens in the same ecosystem. However, someone else could pair trade UNI and JUP tokens from Uniswap and Jupiter (one on Ethereum and one on Solana), which are similar protocols. For example, if you think that the Solana ecosystem will become more prominent in the near future, you can open a long position on JUP/UNI.

2. When should we open or close positions?

When Pair Trading, you should ABSOLUTELY open and close positions for both different tokens simultaneously. The critical point here is to open both positions at the same time, otherwise the rate of this pair may change as market conditions will change. Therefore, you should open your long and short positions on time and at the same time.

3. How can I calculate the profit on my position?

It is very easy to check the total profit or loss of your position. You can use TradingView for this. All you need to do is type “=LDOUSDT/AAVEUSDT” in the search field in TradingView and then select the exchanges for each token. This way, you can track the LDOUSDT/AAVEUSDT ratio. Make a note of the position you opened and follow the next rates. Multiply the percentage change of the ratio by your total position and congratulations, you have calculated your profit! Or, add up the profits and losses of your positions directly on Binance.

4. What is the Advantage of Pair Trading?

When Pair Trading, you don't need to know the entire direction of the market directly. Because whether the market is going up or down, you can still make a profit with Pair Trading. This is because you will have both long and short positions when pair trading.

Closed $TRX short in 1.5% scalp.

Added more $TRX short.

Shorted $TRX .

Simply it is increasing like 15 days in a row - it is too much.

Some people have mentioned that there is no correlation between LDO and AAVE and that they are different projects.
First of all, I have to say that I know that they are different projects.

However, I have to say that AAVE and LDO tokens are similar in structure!

First of all, both projects are indispensable parts of the Ethereum ecosystem. Both tokens serve as the Governance tokens of the AAVE and Lido projects. Both projects are growing together with the TVL.

I also wrote a Python code for you that calculates the correlation between AAVE and LDO returns since the beginning of 2024.

According to this Python code, the return correlation between
AAVE and LDO in 2024 is exactly 0.61.

This number is quite high!

I also created a Scatter Plot for you to better illustrate the relationship between AAVE and LDO returns.

In the image below, you can see this plot and the correlation between them very clearly.

I continue to maintain my LDOUSDT/AAVEUSDT long position.
In the image below, you can see that LDO and AAVE have been continuously correlated since March 2023.

However, we can see a period starting in July 2024 that resulted in a sharp rise in AAVE relative to LDO.

This means that the AAVE has been significantly overvalued relative to the LDO, or the price increase of the LDO has been milder.

This could be due to investors being more hype on AAVE or LDO's SEC filing.

However, in any case, AAVE and LDO are correlated assets and it is very likely that they will cross again in the future.

Therefore, I am long the LDO/AAVE pair by shorting AAVE and long LDO at the same time.

At this point, it doesn't matter if I am at a loss in AAVE or LDO (i.e. I don't need to predict the direction of the market.) All that is required is that I think LDO will appreciate more than AAVE.

I was right about DOGE and I still believe in my thesis.

I wrote my article below about 1 week ago and last night after I wrote it, Elon shared a tweet about DOGE.

Although this tweet received a lot of interaction, it did not cause a noticeable change in the price of DOGE.

Because this tweet did not contain a direct “DOGE” text, it was D.O.G.E in the image.

This expression was clearly a reference to the DOGE coin, but since the bots could not understand this, the price of DOGE could not explode upwards.

Elon usually tends to continue after starting such DOGE expressions.

That's why I trust my DOGE thesis and increase my position.