Making Money in a Bear Market, Web3 and Metaverses
Bear Market Schmearmarket
It’s easy to make money in a bull run, whether that be via a simple buy low-sell high scenario, or by futures or options trading, or by running a simple trading bot on 3Commas. When the price goes up, it’s cashflow time for many, and happy smiley people everywhere are flush with profits. But in a bear market, it feels gloomy and almost impossible to find hope and recovery when so many are cutting loss or being liquidated. Or, is it?
I’m often asked nowadays what I am doing to minimise my risk after the recent capitulation events that have wreaked such havoc on so many wallets lately (including mine). Notwithstanding the serious effects on all asset markets, such as wars, pending famine, more pandemics, SEC rulings or FED interest hikes, it is possible to make decent money during a downtrend. Flip that trading bot to a short bot, buy the dip and DCA (dollar cost average) into your favourite “blue chip”/layer 1 stocks and cryptos, or, place low risk/conservative to moderate trades in the futures market*.
Futures are generally pretty risky because there is the element of leverage (essentially, that is borrowing money to boost your earning potential). What I’m doing right now, however, is reducing my leverage down to as low a 4 X (on Binance at least, people can leverage up to 125 X, which can help them net serious gains without much money down, but also serious losses if executed poorly), and only place trades that show several signs of success. Technical Analysis, or TA for short, is not the be all and end all of price prediction, but it can get you pretty close. There are many places to learn TA, whether through private tuition, youtube, or (later this year) by taking part in Queens of Capital’s EMPIRE programme, which teaches the best parts of TA in a small group, live training and practical environment. We use the live markets as our classroom and TradingView as our (free and excellent) charting tool. The aim of EMPIRE is to teach you TA fundamentals and how to take calculated risk as opposed to shot-in-the-dark risk, which many traders do - that’s basically gambling with your money and is NOT recommended. TA, on the other hand, teaches you to lose small and win big, consistently over time and to have an overall portfolio of higher and higher returns.
Anyway, as an insight into how this could look, here’s a snapshot of a couple of weeks’ trading between 12th May-4th June with low leverage. You’ll notice a win rate of roughly 90% (17 winning days and only 2 losing days, and those losing days were super low losses compared to the wins).
Total profit is over $3k on a balance of $10k in the pot. Not bad, right? $3k in a little over a fortnight? Granted, these results are not guaranteed (DYOR) however, with the right tools, the right attitude and the right amount of risk management (that is, risk only that which you are willing to lose, don’t trade more than 3% of your purse at any given time, set a stop loss - always - and get out if it doesn’t feel right - don’t chase the money or try to catch a falling knife!), and with the right community around you, gains can be made. A couple of dollars a day may not look like much, but coupled with a couple of hundred on other days, even a thousand, it all adds up to consistent returns, even in a bear market.
If you’re interested in trading the Futures market, I like to use Deribit (also great for Options trading) or Binance.
Web 3 - What the heck is it?
In case you were wondering, I thought I’d chime in and share this handy little list as a sort of quick-fire way to understand the gist of what web 3 is all about. In a nutshell, web 1 was good old dial up, the internet of old where we could send emails and info; web 2 took us to the cloud and into the mobile world where the internet is literally everywhere, even in our hands upon a mountain top or out at sea; web 3 is where we take it to a whole new level and can transact not just information, but also real things from the real world - assets with genuine value and that have physical world implications, AND, it allows the user to own their own data, rather than leave it for some third party corporation to own and sell for profit. Pretty cool, huh?
This list, from Consensys.net: Web3 is the new trendy name for the decentralised web.
Web3 is the new trendy name for the decentralised web.
Web1 is read-only, Web2 is read-write, Web3 is read-write-own.
Web3 is a money layer for the internet.
Web3 is an identity layer for the internet.
Web3 is a reaction to social networks not keeping our data secure, and selling it for their own profit.
Web3 is a way for artists and creators to not only own what they produce on a platform, but the platform itself.
Web3 is a new patron model for the internet.
Web3 makes it easy to set up cooperative ownership and governance structures.
Web3 is still not entirely decentralised.
Here’s another great article about the history of the internet and where web 3 can take us (insane possibilities!) from our friend Guy Turner at CoinBureau.
Bitcoin Market Update
All I really wanna say is that finally, after 9 weeks of red candlesticks, Bitcoin finally closed its weekly chart in the green. While this doesn’t necessarily mean we’re outta the woods and off to the moon again, it could mean that the bottom is in (or maybe we’ll have a relief rally before we descend to the true bottom) and we’re on our way to a rebound.
I did like this overview of what a rebound could look like, by YouTube analyst Kevin Svenson.
Let’s see how the coming week plays out 😃
Buying and Holding (or HODLing) is a safe and legitimate way to make money over the very long term. Not all assets need to be traded in order to yield fruit! If you have the stomach for holding onto an asset during the severe discomfort of wild market volatility, you may find yourself mighty comfortable, in the end.
Who Said What?
@CrediBull
“ETH/BTC continues to bleed and is almost at my target first outlined four months ago. That being said, BTC hasn’t even started its fifth wave yet, meaning I expect ETH/BTC to go a lot lower as BTC leads the market out of this correction into its major fifth. Revised target below.”
Kevin Svenson
“Bear Markets make for fantastic trading zones. In both directions. You gotta be agnostic and unbias. Relief rallies can be powerful!!! We may be getting that now. We could hit targets like $37,000 [BTC] and still dump again… but for now, it’s looking nice and green.”
Raoul Pal
“Remember, every single asset on earth, outside of the digital asset space, is down 99%+ vs BTC. It has been a waste of money doing anything else.“
As always, none of what you read on this site is financial advice. I am not a financial advisor and it is recommended that you do your own research when considering trading or investing in the crypto markets. Investing in crypto is inherently risky, so, consult a financial professional before engaging in trading or investment of crypto assets.