Plan

A clear trading plan is essential before entering any market. It defines your capital allocation, entry and exit criteria, and risk parameters.

Setup: Clear Entry and Exit Criteria

A trading setup provides objective signals for when to enter and exit positions. Here's a basic strategy for market participation:

Market Context

• Analyze higher highs and higher lows

• Choose appropriate timeframes (Weekly and Daily)

Entry Criteria

• Location: Confirmed breakout of Weekly W pattern (candlestick body close)

• Additional confirmations:

  • Weekly W pattern formation

  • EMA 9/18 crossover

• Position sizing:

  • Consider phased entries

  • Avoid entering more than 3 position at the same time

  • On volatile assets (altcoins or peny stocks) limit each position to 10% of capital (assets can drop 50% without changing the overall structure)

Exit Strategy

• Stop Loss Placement:

  • Determine maximum acceptable loss before entering (typically 1%)

  • Place stop loss according to coded setup

  • Minimum placement below 2-3 weekly candles (approximately 40-50%)

• Take Profits:

  • Defined by coded setups

  • Can use 3D Hull suite, EMA, or other indicators

  • For altcoins: accumulate in accumulation zones, sell half when doubled

• Trade Management:

  • When profit reaches 1R (or doubles), move stop to breakeven

  • When profit reaches 2R, move stop to 1R, and so on

Risk Management

• Risk no more than 1% per trade

• For swing trades, can increase to 5% maximum

• Maximum drawdown should not exceed 20% (50% is critical)

• Statistically, 10 consecutive losing trades is possible; if risking 10% per trade, you'll be wiped out

• "Not sold, not lost" is the worst idea in trading

• DCA on declining prices is the second worst idea

• Don't trust fundamentals in crypto; technical analysis reveals actual market movements

Key Principles

• Technical movements precede and reinforce fundamental

• Whales decide market movements; these decisions appear on charts before news

• Martingale strategy + conviction = financial disaster

• Planning reduces anxiety; a bad plan is better than no plan

• Nobody knows what will happen next; think in probabilities

• Risk management improves quality of life; sleeping well is worth taking smaller positions

• Younger investors or those with smaller accounts can take more risk (but still need stops)

Asset Volatility Guidelines

• Bitcoin can drop 50% (use trend indicators)

• Altcoins can easily drop 95%

• Normal Bitcoin movement ~1-2% → altcoins ~10%

• Small Bitcoin correction ~5-10% → altcoins ~20-30% (good entry during bull markets)

• After distribution phase, Bitcoin drop ~30% → altcoins ~50% (opportunity to double capital)

• Adjust position sizes accordingly

Trading Tools

Trade Logger

A trading journal is essential for improvement:

• Backtest your setups with historical data

• Identify strengths and weaknesses in your approach

• Develop emotional awareness during trades

• Make decisions based on data rather than intuition

Start by testing setups with minimal risk (0.1% or less) on real trades rather than simulations.

[Note: We will provide a downloadable template that you can customize to fit your needs]

Creating Your Setup

• Begin with the basic setup described above

• Explore YouTube for "trading setup" videos to find appealing strategies

• Backtest thoroughly, recognizing that past performance doesn't guarantee future results

• Use TradingView's strategy tester to analyze historical performance

• Remember that the market eliminates advantages that performs too well because it becomes too popular

TradingView

Additional Trading Considerations

Derivatives Trading

• Can start with derivatives on platforms like Hyperliquid

• Use leverage but manage risk carefully

• Set liquidation point at twice your stop loss

• Hold positions up to one month (~20 days) to avoid false signals and to be able to put a stop at breakeven if the price rises much higher.

  • Funding on this period is not a problem

• Move to spot positions progressively and secure on cold wallets

Technical Considerations

• Enter at daily close; if price moves 1% before entry, reduce position by 1%

• If price returns to entry point, add the missing 1%; otherwise accept smaller position

• Markets evolve, strategies that worked previously may not work in current conditions

• Today's markets show more sector rotation than in 2020 (crypto)

• Buy strength, don't buy weaker assets just because similar ones have pumped

Cryptocurrency Portfolio Management

• Keep 30% cash during strong bull markets to buy dips

• Hold 30-50% in Bitcoin for lower volatility

• Allocate remainder to altcoins (20% in an alt that drops 30% means only a 6% portfolio impact)

• Wealth-building is a marathon; prioritize certainty over speed

Common Misconceptions

• "Not sold, not lost" = Martingale strategy (popular since 2022)

• DCA is proven effective for Bitcoin and broad market indices, not for altcoins

• Add to winning positions, not losing ones

• Markets can remain irrational longer than you can remain solvent

• Conviction provides no statistical edge (except the edge to get destroyed)