Anyone who has been in the crypto space for any period of time has an opinion on XRP and Ripple Labs. The arguments for and against the recent price expansion are plenty, good and bad. Each side has a belief that their opinion is right and has likely made a bet, with real (or not) money. By not purchasing XRP that is taking a position too.
There is no reason for me to take a position publicly in this argument, as I have no fundamental opinion and certainly wouldn't chose to take the time to make one.
Why is that?
I'm a trader. I could care less about the vision, the team, the economics, the product or even the space that they are working in. As a trader all I care to do is make money buying or short selling the asset.
In this case, I've been long (bought) XRPUSD at a much lower level that it's current price and have made a very nice profit. Big woop!
That doesn't take much skill, the skill comes from knowing that even with all the reasons why one shouldn't own XRPUSD, it should've been bought.
To be a successful trader, it requires a couple of key things.
Marry your time frame to your analysis. This by far helps the trader realize that opinions about what the world may look like 6 months, or 3 years from now should not influence your reason to buy or sell something today.
_Example: if you are analyzing a chart of XRPUSD on a 60 minute time frame, the furthest you could possibly project is MAYBE 3 days out. That has ZERO to do with XRP taking over as the global reserve currency for banks or whatever new rhetoric is being discussed. _
Trading is short term.Thinking long term about an asset and making trading decisions (not investment decisions) will remove you from your money faster than any other flawed trading method I can think of.
You have to do your own analysis. You can certainly piggy back of of someone else's ideas, analysis or trades. It is a great way to discover new trading setups, new ideas, new assets to trade. At the same time it is a very poor way to make money consistently over time.
_Example: I analyze ETHUSD and determine that it's going to 1600. You ask me where I think ETHUSD will be going to and I answer 1600, but you have no idea of when I believe it'll hit 1600, how I came up with this magical unicorn of a number, and if I meant after we pull back to 10 dollars it'll eventually run up to 1600...this is a made up example FYI.
You take my thinking, "because hey this dude has been doing this for a while" and go and put all your money into ETHUSD thinking you are going to double it! Then it drops from 700 down to that painful 10 dollar area and if you had any money left, you'd hire a hit man to kill me. _
The better strategy here is to take note of that 1600 level and then go figure out how I came up with that price target. Then after you've been able to walk through the process, and see where 1600 comes into play, you can determine if your analysis agrees with that or not. You can develop a plan and know when the trade is working or when its failed and know when to get in or out because YOU know what to expect along the way.
Be an independent thinker. As a trader you are the one who eventually makes the decision to buy, sell or short an asset. You can be told by any guru on Telegram, Twitter, Reddit, Slack or whatever other place you spend your time, to #buyeverything, #sellitall, but when it comes time to do it, it's your finger on the button that makes it happen.
XRP right now (as of December 30th 2017) is one of the best examples of why thinking independently, and making your own decisions, is key to long term success as a trader.
To reiterate, you can find most people in the crypt space, at least most of the louder voices, are rather negative on XRP and Ripple. With so many haters out there, why would anyone buy XRPUSD below $1.00 and ride it out well above that? Because that is where the opportunity was.
If you were to spend your day on Twitter reading why XRP and Ripple were the worst thing since the plague, and your system generated a buy signal at .60 (for example), you'd have just missed the trade. But if you didn't care about any of the rhetoric about XRP, your system generated a buy signal and you took the trade, you'd be up handsomely (at this point).
You can still agree/disagree with the opinion about XRP, but having the opinion vs just taking the trade is the difference between a trader and not.
Develop a system. To be a professional trader you don't need to be right every time. Heck you don't need to be right more than 50% even 90% of the time. You simply need to be right and make more than when you lost when you are wrong. It's all statistics and knowing yourself.
_Example:
You make 10 trades
*6 are wrong and you lose $100 per wrong trade
*4 are right and you make $200 per right trade
*You earned $200
*9 are wrong and you lose $100 per wrong trade
*1 is right and you make $1,000 per right trade
*You earned $100
Or even more enjoyable
*4 are wrong and you lose $100 per trade
*6 are right and you make $200 per trade
*You made $800_
Having a system that can generate any of those results, over time, in different markets, will earn you a living for a lifetime. The important part of this is knowing how you will react when you take loss after loss. If you've done the backtesting, you've developed the model and you know when or where the model breaks, it is much easier to sit through the losses, because you know that just around the corner, your system will revert to a pretty solid winning streak.
Have a trading plan. Trading is a business. As money comes in, it gets used to make more money, be it in paying for software or data feeds to analyze future trades, stable internet connection, a place to live or work from, power, food or into the trading account to continue to grow.
A trading plan is like a business plan. It is a thought out plan of what happens if/when this happens.
First of all, you can search for 'Trading Plan Template' and find many examples. It is a living breathing document and evolves over time. Early on it may evolve many times per day as you learn new things, but eventually you will have a solid plan of how to run your trading business.
Here are many of the things you will flush out in the trading plan, Your temperament, how you deal with losses, wins, interruptions, power loss, getting hacked, not having internet connection, travel, draw downs in capital, sustained losses, winning streaks, how to size your positions, where to set stop losses, when to take profits, diversification, reinvestment, salary, hiring people, new equipment, your trading strategy(s) and maybe some more things as you grow.
Soooo WTF Is Happening With XRPUSD
Using market psychology here, there are many reasons stacked on top of each other why this "most hated asset" has 4x'ed in a few days. As more market participants join, they don't know a thing about the history of XRPUSD and Ripple, they don't know a thing about BTCUSD either. Like it or not, they are in the market, and they are going to cause things to happen.
We are in a MASSIVE secular bull market (unless we aren't) and as money continues to enter the entire asset class, all tides will rise. Some more than others. Some will survive, some will crumble, some may never be anything more than a white paper that ICO'd and never even built an MVP. But for now, pretty much everything has and will rise. It doesn't take a genius to make money in a bull market.
Don't get too caught up in the drama, as a trader focus on what your advantage, build your plan, trade your plan and be here for the long run!
This analysis is circulated for informational and educational purposes only. There is no consideration given to the specific investment needs, objectives or tolerances of any of the recipients. Additionally, actual investment positions may, and often will, vary from its conclusions discussed herein based on any number of factors, such as investment restrictions, portfolio rebalancing and transactions costs, among others. Recipients should consult their own advisors, including tax advisors, before making any investment decision. This report is not an offer to sell or the solicitation of an offer to buy the securities or other instruments mentioned. The research utilizes data and information from public, private and internal sources, including data from actual trades. While we consider information from external sources to be reliable, we do not assume responsibility for its accuracy. The views expressed herein are solely those of the author as of the date of this report and are subject to change without notice. The author may have a significant financial interest in one or more of the positions and/or securities or derivatives discussed.
