I wanted to write this article yesterday, but then I reminded myself it's 2AM, and time to go to sleep.
So as I was trying to fall asleep, I was thinking about how to present it to you.
There are 4 key levels of accuracy defined by trading style / decision source that limit your trading success.
Level 1: The Least Accurate Crypto Trading Signals - Listening To The Public
The odds of your Bitcoin Signals turning success: 1 in 15
The odds of your Altcoin Signals turning a success: 1 in 8
The public is 90% wrong, and when they are wrong, public cuts losses late and wins early. Remember this.
The public is so inaccurate that CNBC was 'famous' for a while for being a 95% inaccurate, and very good medium for counter-trading. that 95% gives you approximate odds public has versus the pros.
Listening to public forums is worse than...
Level 2: Almost As Bad Crypto Trading Signals - Listening To Your Gut
The odds of your Bitcoin signals turning a success: 1 in 10
The odds of your altcoin signals turning a success: 1 in 4
Yes, there is the sixth sense, and all that, but for the matter of practical discussion, let's admit it - you are not a Yogi, and you are not so fine-tuned with your gut... so basically what you do is gamble. The problem with that is, your odds are not even 50-50, because if you leverage bitcoin, or use any kind of stop loss - very frequently you are caught by a stop hunt, that just triggers your stop and then goes into the right direction - even the one you suspected as right. Thus your odds are not a coin flip 50% up and 50% down. It's way worse.
For non-leveraged alts, the odds are significantly better, still far from beneficial for you.
Level 3: Okay altcoin signals, and still not tradeable Bitcoin signals - Listening to public TA
The odds of your Bitcoin signals turning a success: 1 in 7
The odds of your altcoin signals turning a success: 2 in 5
The major problem with free, public TAs is what we witnessed at Blockchain Whispers when we reached major following, the perfect signal turned the opposite direction. Also, public TA is just a bit more select group of people that have the same public knowledge but just dig a bit deeper... CNBC was 95% inaccurate... public TAs are around 70% inaccurate.
They use the same tools, see the same things, 20 years ago TA was a revolution, an edge... now it's a method to fool masses who still base trades on RSI, FIB and MACD.
Level 4: Professionals
Odds of your bitcoin signals turning a success: 6 in 10, 7 in 10, 8 in 10 (world class) and 9 in 10 (very rare cases).
The odds of your altcoin signals turning a success: 7 in 10, 8 in 10 and 9 in 10 (very frequent in bitcoin favorable times)
Most of the professionals earning a good living trading are at around 7 out of 10 accuracy, and with proper portfolio management, they can work, get hired or even trade for themselves all day long. Of course professional crypto traders are a new breed, and most struggling are coming from stocks, and most accurate that I saw are coming from forex background.
Still, the adjusting even from forex is needed. Crypto is a body within itself.
Now remember this, NO professional trader, can have 10/10 accuracy for a long time. It is impossible. The limitations of historic predictions are around 8 out of 10 and those 9/10 that I mentioned are a stretch... either a good momentum, or a big chunk of luck. 8 out of ten or 8.5/10 is where top pros reside.
At Blockchain Whispers I am looking for 8+ out of 10 traders. I have one that is 9 out of 10 but I still believe it is just a period of statistical anomaly.
Unfortunately, the most accurate bitcoin traders are:
Level 5: The Insiders
The odds of your Bitcoin signals turning a success: 19 in 20
The odds of your altcoin signals turning a success: 48 in 50 (volatile btc times) and 49 in 50 (stable btc times)
Owning an exchange, seeing the stops, liquidation points, orders... and in some cases (BitMEX) allowing you to block the trading of others when you see fit (system overload example Bitmex uses often)... beats TA, FA, and pretty much anything else.
Obviously Bitmex has the highest insider edge, and is pushing upwards that 19 out of 20... while other exchanges, whale groups, etc are specialized either for longer timeframes, or concentrated micro moves.
Imagine for example a factor many traders take into account - Bitfinex shorts vs longs... Bitfinex prints tether, they made the whole operation for controling the outcome... why don't you think they can't put their own 'longs' or 'shorts' and fool that figure?
And what happens in rare cases when those insiders fail?
Sometimes, like the recent example, they refuse to lose - so we saw a big discrepancy between Binance price and Bitmex price, with coinbase being one group Bitfinex another...
And now you think you can't win?
Wrong. You can. Because they all need retail investors.
And retail investors won't trade if they never win, and if you have an edge over 90% of retail investors, you are in nice profit. But use this article as a big realization, and that is...
The Portfolio Management - Because You Will Never Be Right Forever
Great, great example is Sicario Bitmex Signals if you managed at the end of the cycle with Sicario to end up in loss, your portfolio management is fomo-terrible.
But cry not, it can be easily fixed.
For starters, use 5% of your total portfolio per call. Always the same amount. Always respecting the leverage, and finally... be willing to miss a trade if you are late and your entry doesn't fulfill.
The time will come when all those institutions will be rekt... Bitmex, Bitfinex, Coinbase... actually Coinbase and Binance latest (if at all) as they play cleaner game, but that time won't come soon. And for the matter of fact, they are NOT your problem. For Bitmex and Bitfinex, as manipulative as they are you have to be grateful because they let you trade... and if you ever have a better choice, you will go there and never look back.
(Maybe Deribit makes some progress!)
Until then... keep on hustling, with higher discipline, because as the greatest investor of all times said: the market is moving money from inpatient to patient.
Be patient, stay believing, Bitcoin to the moon,