What you need to consider before trading cryptocurrencies

It's the system stupid

safe at home

It’s impossible to imagine the value of the blockchain and crypto currencies, so I’m a long-term investor at this point. I think the value is in my process, not the instrument that I’m trading. Likewise, I feel the best way to extract capital from the market is via an investment that takes advantage of wide adoption of the underlying.

Two, I’m not going to let any one security put my trading process in jeopardy. I’ve talked before about what I look at and how I rake the data to include instruments within my trading system. I’m not going to change those rules for any instrument. 

Before you trade bitcoin futures

I have not traded bitcoin futures and I won’t be in the near term. There is not enough data and I don’t know who has basis risk. It seems like the market is dominated by speculators and not hedgers, and they are heavily biased long.

When the market is lop-sided and fickle, it makes for a poor trading environment. That’s why I’m invested and not trading at this point. It’s too easy to lose money…and that’s going to happen even when I’m trading well…

The best that will happen is that I’ll add it to my system and trade it among all the other instruments that are in there. It’s not getting any special treatment, nor am I going to try to develop a dedicated system to trade bitcoin. 

The Safest Way to Store Your Crypto Currencies

Use cold storage for your crypto currency investments – that means offline.

You can use a USB drive and drop that into a safe deposit box.

You can also use what’s called a “hardware wallet” such as those below instead of an online wallet and exchange such as Coinbase or another online digital wallet that can be hacked. 


Ledger Nano S



In order to stay as safe as possible, keep your mouth quiet about owning bitcoin or any other valuable cryptocurrency and how your store them. No one needs to know your personal business. Don’t brag or bring attention to yourself (about bitcoin, art, or collectibles) so you don’t tip off anyone to come and rob you.

There’s nothing terribly bright about trying to engage in a market that you have no business being in. Intra-day patterns are not reliable and if you missed several big moves, trying to play catch-up is a lethal proposition. Sometimes you just miss trades and you have to face up to it. That fact should motivate you to stop trying to read charts because any basic trading system would have had you long several of the crypto currencies.

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