Managing A Difficult Market

Inspired by a post by Hersh, I wanted to mix my current take on the market with a bit of pep talk and principles, and a reminder regarding how I work. I hope it is helpful. 

This Market Sucks, But Don't Dispair.

First there is no doubt that this is a difficult crypto market. Unless you had all your money in bitcoin, you might have found it hard to eek out a gain. If you have anyway, you are a top tier trader. Be proud. If not, don't be discouraged. This too shall pass, if you have sufficient patience. Please don't ask me when. I think it is coming, but haven't I said that for a while? The Elliott Wave explanation for this, may be too simplistic for some is we are in corrective structures. For some coins we are still in the wave 4 which began in June. For some, mostly these small tokens, we are in diagonals and may never see a strong impulse (see Evolution of A Diagonal). 

Again, when in these types markets, you have to know yourself as a trader. What style of trading are you good at? Reversal or Breakout? Scalp, swing, or positional? I have had to learn these lessons the hard way. And, to make more complex, I keep evolving. I always try new things and learn new skills. 

EVERYONE IS A GENIUS IN A BULL MARKET. The true genius' are revealed in difficult markets. (Think I stole that from HD.)

How to Manage

Really, the easiest way to trade all this is to HODL. (Crypto slang for holding on through thick and thin) As long as bull market supports hold, there is no reason to worry. That said, to do so you really want to not invest more than you are comfortable losing. When Avi said he was going to enter the Ethereum market he said he was going to only invest money he was comfortable losing. Wise words from a wise man. Bull market supports can always break. I don't want to ever hear anyone tell me my analysis is Bad because a support broke. I have no control of that. What I can only offer is where the market will pivot. I can't control what it will do with that level. So, you should trade accordingly if you are relying on me to help. 

That said, long term counts are always more reliable than short term. So, if you are having difficult trading consider zooming out and position down to the point you are comfortable. Consider building a long term portfolio. 

Likewise, I'm going to put out some 'moon' counts with boldness. That IS NOT a statement from me to go all in and expect that riches will come. But it is a statement that if anything is going to moon, it will be those assets. There is no moon without the right setup. No market moves either way aggressively without a proper setup. Show one where you disagree, and I will show you the setup. I promise. Even the 1987 crash had a setup prior. Did anyone know with 100% certainty that it would crash? No, but some knew it could and positioned accordingly. Consider my analysis a search for setups, not a foretelling of the future. I will talk about what I expect but I'm no genius. But I must plan so I must have a point of view.

My Personal Approach and How it Relates to the Portfolios.

I continually take short term profits and put what I'm comfortable not touching on my Ledger wallets, in the Coinbase vault, and Gemini, my long term 'holding' spots. I am also starting to do that with the alts that are showing the seeds of a long term move. While some here, might fundamentally disagree with me, those are STRAT, LSK, OMG screaming the loudest. Ripple is also in that group but is likely going to see one of the brutal wave 2's next year. This set will be along side my long term Ether, Litecoin, and Bitcoin holdings. 

It's a little challenging for me to lead the next phase using the trade signals. The service started in an awkward moment in time where we are between long term supports and long term resistance. That's why the portfolios are hardly exposed. 60% still cash, roughly. My plan is to size up on the big wave 2's I expect next year, until that view changes. In the mean time I have keep it low in exposure. And, while some people may think my short term moves in those are crazy, they are really looking forward, emphasizing the long term nature of these portfolios. I'm imagining myself running a crypto mutual fund, not a prop firm, while the swing positions are a little different. Note that I'm not posting swing trades right now? Market conditions don't warrant it. I was stubborn in October and the bad results show (Down 85% cumulative versus 365% in September across all portfolios)

Any short term profit taking in these portfolios is meant to cushion them a bit, but still hold a core. I have been trading that way, but this is a difficult market and requires much patience, I don't expect this chop to end right away, but I want to have some strong holdings for the probable TRUE impulse around the corner. 

Ryan Wilday hosts the Cryptocurrency Trading service on ElliottWaveTrader.net.