Specially for account blow-uppers

Trade Guru
Sep 2, 2018 · 6 min read

The childish excitement of “Bitcoin gonna cost 100k!!” turned out to be a real blood bath — hit-and-miss crypto-traders lost 70% of their deposits (and some went “averaging”, following some newborn gurus’ helpful advice and made even larger “profits”). Though it looked the heavens were so close!

All the smartest pants who bought it at the “bottom” (say, for 6k in February), they got to the second and third bottoms as a gift. Seems like crypto-trading is all pain, despair and disappointment. Still, not for everyone. I’ll tell more later, but first here’s my little metaphor.

Trader’s nightmare

Laugh or not, but I actually had this dream. I woke up from it, cold sweat on my pillow and curses coming out of my mouth. I smoked down half-pack of cigarettes and sat down writing this piece and laughing nervously. So meet my worst dream ever:

Sitting in a classy Barbershop, chilling out, gentle music caressing my ears, soft hands of a pretty hairdresser lady softly touching my face… My eyes are shut, and a pleased smile hovers on my lips. Life is great! But then I open my eyes and the blood freezes in my veins as I see: there’s not a single human being in the Barbershop! The place is full of blissful little lemmings, sitting neat and tidy, some lousy metal things clipping them clean. Full of fear, I turn to my own looking glass — and I see a perfectly shaved and clipped lemming…

My fear was beyond the words. Thank goodness it was just a dream… And yet — for many this nightmare has come true.

CryptoBarberShop in operation

I think this metaphor is clear like the tear of a naïve lemming blowing his account to the dogs. The shiny crypto-rocket was intentionally packed with trading newbs (since experienced traders are too shaken with shock from what is happening on crypto exchanges), and then the Great Clipping began. Let’s look into it in detail.

Crypto exchanges are designed for fools

Take a look at interfaces and trading terminals of almost every exchange site — zero opportunities for trading analysis, zero instruments for automated technical analysis, no tools to estimate your risks and profits, no possibility to set stop-loss and take-profit at the same time (and the same KuCoin has no stops at all!), etc. All they have is a simple interface for schoolchildren with two buttons, “Buy” and “Sell”. Nothing is done to help people think or, God forbid, analyze.

No experienced trader messes himself in that. ’Cause it’s impossible to trade on such platforms! All you can do is to gamble, like in a casino. And the casino ALWAYS wins.

The Overton Window, or how “crypto traders” let others fool them

At first crypto exchanges casted themselves as a breath of fresh air in the messy world of the market’s big cats, they lured everyone in with an opportunity to trade promising assets without intermediaries and manipulators, making one more step towards the independent economics of the future, etc. etc. In return for these unbelievable advantages “traders” only needed to put up with some “small technical imperfections”. What are they?

Well, let’s take Bitmex: as a rule, their servers fall every time Bitcoin jumps or dives. People just can’t close their deals or set stops. Liquidations reach millions of dollars in just several minutes. Exchanges seldom take any responsibility for that. The same with Binance — it can stay out of work for 1–2 days in a row, saying it’s all “maintenance works”, when Bitcoin goes down, and people can’t even withdraw or sell it.

I’m not going to mention regular breaches, thefts and frauds on exchanges (do they keep private keys on their servers?! How is that even possible?!!). And people just take the bait and say thank you!

Can you even imagine anything like that happening in a broker company? Its clients would make the second Bastille Day, and they would be right!

No unauthorised entry

I think the only exchange I can call relatively good is Bitfinex, and here’s why. Every experienced trader knows — there is absolutely no difference where the price goes. If it grows we open a long position, if it goes down — short our assets with no mercy. If you’re sure about your forecast, strengthen the positions with leverage. Professionals earn on price MOVES, and they don’t give a damn if it’s to the moon or not.

This opportunity to go long or short and the instruments for margin trading are only present on three exchanges. Bitmex, I’ve mentioned it before, and no decent trader would mixes up with it. Poloniex, and the rumour has it that they’re going to close quite soon, and Bitfinex. The latter is the most stable and safe place among all.

However, there’s one little nuance about that. Only the bigger whales can join Bitfinex. First, their minimum deposit is 10’000 USD, second, some people wait for 6–8 months for their documents to be accepted. Doesn’t it seem weird?

So what do we have?

We have the biggest, trickiest, crookiest business you can imagine. Naïve virgin traders were made to believe into the moon, baited into exchanges, where they could only buy assets long (and play for price increase!), they were deprived of all the basic trading instruments for market analysis and risks/profits assessment, they were repeatedly kicked by the “maintenance works”… and then thrown out like a rocket engine that carries a spacecraft out from the Earth atmosphere. The spaceship (exchanges) will sure make it to the moon, but without the poor lemmings.

Patience, dear newbs, patience and hard work can bring you to Wall Street!

The good news is that even if you lose 70% of your deposit, the situation can be changed. At least you can win back the lost money from the market, and, with little patience and persistence, you can even boost the initial deposit. Here’s what can help you with this:

  • Traders DON’T CARE if the price goes up or down. We are earning on price MOVES.
  • We don’t mess with shady exchanges, which close for maintenance at the peak activity moments.
  • We use PROFESSIONAL tools for trading — the software, the analysis instruments, etc.
  • We use the opportunities of MARGIN TRADING carefully, thoughtfully, with clear mind (in our case it’s probably the only way to stop having minuses in a short period of time).
  • We DIVERSIFY RISKS, which is — trade on different markets. For instance, now the Japanese Yen has dived down by 20% (what a volatility, huh?), and I say, it would be a great short!

And what platform provides all of these opportunities? I’m using brokers’ services. I think they’re the lesser of evil than exchanges why — see above. Today there are several large international brokers who offer crypto instruments for trading.

Moreover, on the 1st September there’s launched the first specialized crypto-broker LH-Crypto. I made a comparison table of their conditions with other brokers and exchanges (check it out here) — it looks quite attractive! You may register and try their services here: lh-crypto.com

No pasarán, guys! The game’s still on!

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