As promised, here’s part 2 of the guide to trading cryptocurrencies with the PS60 Theory. For anybody who missed part 1, you can find it here.
Hopefully now you have at least a general understanding of why so many people have begun investing in crypto recently. If the industry continues to boom, it will affect just about every part of our society in the coming decades.
But unless you’re just planning to buy some Bitcoin and hold on to it for 5 or 10 years, that long-term outlook is somewhat irrelevant. For traders, the question is whether or not there’s money to be made right now. And that answer is a resounding “yes”.
Let’s dive in. Of all the major markets, crypto is the most similar to Forex. So for the purposes of this guide, we’ll mostly compare those two directly. Of course, you can make comparisons with whatever it is you currently trade, whether that be stocks, options, futures, etc.
Ease of Entry
Getting started trading cryptos is about as frictionless a process as you could possibly hope for. You simply set up an account on an exchange, deposit or buy some Bitcoin, and you’re ready to trade. Compare that to trading Forex, where you have to set up a broker account and jump through all sorts of legalities before you can even begin trading. So the ease of entry into the crypto market and having the freedom to switch between multiple exchanges is definitely a big plus for trading crypto.
This is rather straightforward. Forex exchanges typically have larger spreads than cryptocurrency exchanges. Meaning that the difference between the ask price and bid price of the market makers is greater. The bigger the spread, the more each trade costs you. So trading cryptos will come with smaller losses than trading foreign currencies.
Cryptocurrency markets are truly global. In fact, there is as much exchange activity in South Korea and Japan as there is in the United States. That means that exchanges operate 24-hours a day — there is no market opening and closing. If you’re somebody who trades for a living already and works traditional hours that may not be a big deal. But for new traders who can’t afford to quit their day jobs or even just people who like to have flexibility with hours, this makes cryptocurrency trading a desirable option.
As with some other major markets, cryptocurrency exchanges do allow for margin trading — meaning that you can borrow buying or selling power. In crypto’s case, this margin funding comes from peer-to-peer funding providers, rather than a broker. This is convenient if you are undercapitalized but don’t want to miss out on an opportunity to trade that you feel very confident about.
Leverage trading is high-risk and high-reward if you pull it off. You had better be really confident in your process if you’re going to go down this route, but at least you have the option to leverage trade with crypto if you so choose.
While we’re on the topic of high-risk and high-reward trading, it’s worth mentioning that even trading crypto at all is a high-risk, high-reward proposition. That’s because the newness of cryptocurrencies results in their markets being highly volatile. While major markets don’t commonly experience any volatility greater than 10 or 15 percent, crypto volatility is in a league of its own. Some days are steady, sure, but it’s still normal to see fluctuations exceeding 100 percent in a day for some of the newer altcoins and greater than 15 percent for established cryptos like Bitcoin and Ethereum. That means that you have a lot of opportunities to profit, but a lot of opportunities for losses as well.
And that brings us to our final point — process.
As Dan has mentioned in the past, 80% of traders weren’t making real money even during the dotcom era. So for anybody who thinks that they can just jump into the crypto market because it’s booming right now and make money, you might be in for a rude awakening. The one constant across all of the major markets is that you won’t succeed without a valid process.
The PS60 Theory
As a new trader, I started off trading stocks like most people. Several months passed and I did alright, but it certainly didn’t feel like a sustainable income source. Around the same time, I started learning about cryptocurrencies and became fascinated by them. I invested in Bitcoin and Ethereum, both of which have returned greater than 1000% profits just from holding. But I didn’t trust myself to actively trade given how volatile the moves were. Then I became a part of the Access a Trader community and started learning about the PS60 Theory, and that all changed. There have been some rough spots as there are with any learning process, but I’ve now gained the confidence that I can be consistently profitable trading cryptos.
What makes the PS60 theory great is that it’s a simple technical process for intra-day trading. The crypto market could all come crashing down, but that’s not a major concern with smart risk allocation. It could also continue to boom, and there will be plenty of opportunities to make sizable profits with all the volatility. And the way to analyze price action is the same as for stocks, options, Forex, etc. Cryptos move from supply to supply and demand to demand, and it’s up to you to leverage pivots and capitalize on premium hands. If you have the technical process down for trading any other asset class, you can apply it to trading cryptos and find great success. And if you’re like I was and you don’t yet have a technical process, applying the PS60 Theory to cryptos can be a great place to start.