CRYPTOCURRENCY TRAINING: TECHNIQUES TRADES & TRENDS PT.3

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THERE IS A FORMULA FOR EVERYTHING EXCEPT EXPERIENCE. HOWEVER IT IS OUR EXPERIENCES THAT TEACH US THESE FORMULAS. EVERYONE SHOULD HAVE SOME "SAVINGS." COMMON SENSE DICTATES THAT HAVING "SAVINGS" IS MORE IMPORTANT THEN MAKING INVESTMENTS. BOTH SAVINGS AND INVESTMENTS ARE WITHHOLDING'S WE'VE SKIMMED FROM OUR DAILY PRODUCTION AND/OR CONSUMPTION OF GOODS AND SERVICES. OUR SKILL SET PROVIDES THE MEANS FOR SUSTAINING A LIVING THAT MUST LAST FOR A LIFETIME. NEVER INVEST "SAVINGS." THE GOAL IS TO ALLOW OUR INVESTMENTS TO SUPPLEMENT THE "SAVINGS" THAT SUSTAIN US FOR A LIFETIME.

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There's an old adage that says if we chase money it will run from us, but if we make money it will show us how to make more of it. It is important to remember that money is only a medium used to exchange value. It is the intangible assets themselves, (Goods produced and Services performed) that have and hold value. TO UNDERSTAND THIS LESSON WE FIRST HAVE TO UNLEARN THE PRACTICE OF SAVING MONEY! This thinking must be replaced with a new practice of collecting or saving ASSETS instead. There are four financial monetary statuses. Invest, save, owe and earn. Each status comes with its strengths and weaknesses. Managing each of these conditions appropriately builds financial stability. Personal financial education is becoming a national movement. Unfortunately this movement is happening to late for many of us. Fortunately there are sites that share their insights on many of the principles of finance. Once our wallets are ready we can begin to put something into them. Yes, at this point anyone without a wallet for their "crypto" is missing the mark. OUR OBJECT IN THIS ENDEAVOR (GAME) IS TO WIN. TO WIN WE MUST MAKE ENOUGH MONEY TO COMPENSATE FOR THE TIME, ENERGY AND USE OF OUR RESOURCES. We need to learn to stop chasing money and to start accumulating wealth. Money is simply a means of moving wealth around. It is the accounting mechanism for measuring value. Whether we measure that goal by a percentage or by a amount, the bottom line is that after setting  our goals we must have a wallet to deposit them into.

The main difference between the regular stock market and the new emerging cryptocurrency markets are the use of brokers. A broker has a fiduciary duty to act in good faith regarding their customers interests. Brokers have the responsibility to guide and provide their investors with any information that can enhance or protect their interests. The adoption of new technologies and the advent of commission free trading signaled to us that a new era of access to money markets was coming. Growing markets require increased capitalization and must expand by adding both money and members to its pool. These new markets do not offer the same level of protections traditionally mandated by the SEC. Today's new breed of online investors are just about on their own. Therefore we have concluded that the average cryptocurrency investor is quite naive. Most Crypto investors have no buying strategy, no exit strategy and just want to get in "the game." Few of them realize that they need to have diversity in their holdings. We recommend having at least four types of cryptocurrency assets within any portfolio. We prefer having a value "holding" company like Bitcoin and Ethereum for long term value, Altcoins should be a part of our "trading" portfolio for short term plays, Stablecoins for exchanging value into fiat and NFT's for preserving or reserving any unique concept or idea digitally. It is important to wrap our heads around the idea of the "value of assets," now termed cryptocurrency, rather then the "value of money" referred to as dollars, bills and coins. Although cryptocurrencies are often referred to as coins, they are actually companies that issue stock called "coin or tokens." This allows us to price them in terms of real fiat money. In cryptocurrency markets, placing a monetary value on each business is a part of its capitalization.  Using this metric allows us to rate and somewhat compare them. In all cases choosing companies that have strong capitalization qualifications will be the best overall strategy. Entering the cryptocurrency market is complicated. There are thousands of coins and blockchain projects in operation. To obtain a better grasp of the cryptocurrency market, it is easier to classify all cryptocurrencies themselves into one of two categories called coins and tokens. Coins are any cryptocurrency that have their own standalone independent blockchain (Bitcoin and Ethereum). Tokens are cryptocurrencies that do not have their own blockchain but live on another blockchain. By operating off of another's blockchain, these companies can benefit from existing technology (such as ERC-20 tokens). Altcoins are considered to be any coins that are not Bitcoin. Tokens can be considered derivatives of their primary blockchain. This may help explain why Ripple/XRP ran into trouble with the SEC and got delisted.

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Capitalization is an important factor when it comes to cryptocurrencies. The more money there is in a particular market, the higher its capitalization. Simply put, the more activity and players involved in any kind of market the busier it is and the more money it circulates. This is why the volume of trades is just as important as what was traded. The more cryptocurrency there is the higher its capitalization rate. This rate is calculated by the number of shares multiplied by the price per share. Capitalization rates are applicable only to companies listed on an exchange. Capitalization, although considered to be the current market value of a company is only one aspect of measuring a business. This is a comparative value of measure across all publicly traded businesses with at least four basic categories. There are multiple factors that influence the capitalization rate and that the "cap rate" also influences. For example when the number of sellers increase as a price gets too high, people tend to want to take a profit. This also requires a larger number of buyers to keep the price afloat. When there are more sellers then buyers at any price level the market balances itself by adjusting the price per share. Large cap companies can see large swings in their "cap rates." In a blockchain the higher the "cap rate" of a coin the more gas it cost to move it. Alternatively, low "cap rate," more volatile coins, with higher risk and potentially higher profits tend to cost less to transact with. Following what the "cap rate" of a company has been and now is gives the rate more significance. In addition, understanding the causes behind such changes make the "cap rate" a valuable measuring tool.  

There is the only thing we truly believe regarding market timing. We can watch the market but we'll never figure it out. Those that say they have it all figured out are either truly deceived or are convincing liars. There are multiple tactics and instruments investors can use to profit. There is just one tactic that works over time EVERY time. That method is called "Dollar Cost Averaging." Dollar Cost Averaging is a strategy for long term investors. It is a tried and true time tested method for profit. In reality there is no such thing as a bull or bear market. These terms are used to describe current market trends. From its inception the stock market has always slowly grown. The "overall trend" has been a steadily increasing rise with multiple dips along the way. The market has always and today continues to expand to accommodate new growth. Growth is a gradual process that balances time with improvements. Growth occurs at its own pace and in its own time. Rushing growth creates problems of premature perspectives from immaturity. Unfortunately most investors in cryptocurrency markets are caught up in the "gaming" aspect of investing. But managing money is no game. Unlike any other business money markets self sustain through parasitic feeding. Each member feeds upon the host which is actually composed of all of the other members. Remember, this type of business is called an "exchange." For every buyer there must be a seller willing to exchange at an agreed price. Market pressures increase as sellers and buyers fail to meet and agree on the value of commodities. The fact that feelings and emotions are some of the strongest drivers behind money markets must always be factored in. Logic and reason tend to fall secondary to "psychic" excitement. Today most exchanges offer phone apps that keep investors on the edge of their seats through the "Spirit of F.O.M.O." (Fear Of Missing Out). Most investors know one rule. Buy low and sell high. This is also known as "buy the dip." But there's no way to know how long or deep the dip might be. The "Dip" is exciting and inviting but deceitful. "Dollar cost averaging" is boring; but it is the best known way to minimize losses and insure profit. Of course there are higher profit and higher risk strategies such as derivatives. 

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Here are three metrics new investors can pay attention to and use immediately. Metrics can be regarded as key performance indicators called KPI's. A "key metric" is a statistic which, by its given value shows a measure of overall health and performance. The first metric to consider compares "Volume" and "Open interest." Volume indicates the total amount of activity of a coin while open interest allows us to gauge the pending speculative bids open into futures and options contracts. These metrics helps us to gauge the depth of the market through analyzing how many trading positions are still pending and open for execution. "Open interest" offers us a good view of the active interest and potential trades currently in the Queue. There is another metric called the "put-call ratio." This ratio is the amount of "puts" outstanding versus the number of "calls." It works in tandem with the volume of "open interest" activity awaiting execution. a "Put" is an option with the right to sell and a "call" is an option with the right to buy. A ratio of greater then (1) one means there are more "puts" being bought and positioned than "calls." This generally indicates a "BEARISH" trend. A ratio less then (1) one demonstrates that there are more "calls" in position then "puts." This can be considered BULLISH because investors are positioned to buy. By monitoring the metrics provided by "put-call ratios" we can get an idea of the mood or direction of sentiment on individual coins, tokens or stocks. The last metric considered in this post is called "implied volatility." This type of chart attempts to measure investor fear. "Implied volatility" is a measure of the uncertainty that the market expects in prices going forward. It is calculated by looking at the price of "market options" and extracting data that can indicate investor doubts. We recommend sites like Tradingview.com, Skew.com, glassnode.com and Coinmarketcap .com for access to these charts, graphs, instruments and tools.  Most Hodlers will not be interested in these sites. HODlers are cryptocurrency investors who buy and hold their positions regardless of price. Whether the market is up, down or sideways, hodlers stay invested. HODlers are long-term investors that are confident that their cryptocurrency will  continue to gain value. We will be examining some of the tools mentioned in this post on part four.

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