Professor Shrewd

  Traders Four Most Common "Sins" This blog is on the most common mistakes (I would call them sins) that new traders make during their entry into crypto trading. There could be dozens of other related mistakes also. However, I would prefer to restrict myself to the Four most common sins that new traders may commit due to their lack of knowledge about the cryptocurrency market dynamics. The below discussion is based on these four most common yet most important mistakes that new traders should avoid. 1.    No distinction between Investing and Trading Let’s make a distinction between these two common terms first because the majority of new entrants in crypto trading, do not know the difference nor do they know why they are entering this market(i.e., do they want to invest or trade). Their initial ignorance leads to wrong expectations, psychopathic behaviour, ultimately unbearable losses and exit from the crypto trading/investment market.   Figure 1: Photo by...

Risk Management and Power of 1% Rule Risk management has the same relation with trading as the spinal cord has with the human body. Like a human cannot survive without a spinal cord, a trader cannot survive without mastering the art of risk management. Despite the importance of risk management, about 99 % of traders ignore risk management during trading. According to a survey, risk management and trade psychology contribute to 95% of the success in trade and the remaining 5% comes from technical analysis. This implies that traders (especially new traders) should spend most of their time mastering the art of risk management instead of focusing on fancy chart-making only. This write-up aims to highlight the importance of risk management in trading/crypto-currency trading using some simple examples and using two hypothetical characters Mr. Raju (a new trader) and Mr. Babu (an experienced trader). Risk Management and New Trader (Mr Raju) Raju is a new trader. He has a 3000 USD portfoli...