hi everybody Alex du Plooy from Expert4x and today I want to talk about
cryptocurrencies and how to invest and trade in those cryptocurrencies now
these coins Bitcoin and alt coins and Etherium are basically currencies and
people battle to get their heads around it but it's basically a currency without
a country and that's what makes it so tricky
it's an international currency and it's related to the US dollar or to even the
Aussie dollar or Pound or the Euro so it is a currency and it is tradable now
most of the quality cryptocurrencies are in a big bull market the prices are just
flying up I've been lucky enough to invest in and 25 of those crypto
currencies including Bitcoin and most of them of the 25 23 of them are fully
positive at this stage to say that I'm happy about my investment is an
understatement they've exceeded my expectations by far
there's a big discussion whether one should day trade the currency market but
when it is in a bull phase like it is I personally think it is a much better
strategy to just invest in the currencies the currencies will
automatically give you the growth that you're looking for you don't have to
really get into involved in day trading now please bear in mind I'm not a
financial advisor and I can't advise you on these things you've got to do your
own due diligence and own homework and decide on what you want to do that's my
strategy as I said I'm not totally convinced that technical analysis is
going to add much value to the benefits that you get from investing in crypto
cryptocurrencies you do much better to research the management involved in
those particular coins and the plans that they have for the future then to
try technical analysis now what happens in a bull market is that people say well
what you've got to do is wait for a retracement and then get in when there's a
retracement problem with that approach is that the price can just continue
never make up retracement and that that's happened with Bitcoin for quite a
while it's just gone up all the way and made minor retracements the other thing
is when it makes it a tracement how do you know when the retracement is over
sometimes it can be a ten percent sometimes a twenty percent sometimes a
forty percent retracement nobody knows so I have a very simple investment
approach to trading these currencies I use a grid system now one of my EAs which
was developed about six years ago trading the grid system is ideal for
this particular market it's a bull market so you sure of the direction of
the trade and it does retrace every now and then so you can't benefit from
retrace and you know and the system allows you to know exactly when to buy
the retraced currencies it's also ideal for sideways currencies a lot of these
currencies are waiting for some future developments and they're just trading
sideways at the moment and you can actually make a lot of money from a
sideways market using the grid trading approach 95% of cryptocurrencies canta
fall in the category of being in a bull market or in a sideways slowly trading
upwards market okay so let's have a look at the grid system and let's look at the
grid trend multiplier and how it helps you multiply your gains as the price
moves sideways or upwards in a nice soft bull market okay let's look at the
basics of grid trading and I'll give you an example of this to make it a lot
clearer but essentially what you do is you divide the trading chart into a grid
as you can see on the screen the grid lines can be any distance apart in this
case in this example let's say they just 100 pips apart and what you would
then do is you would start at a particular point where you are at the at
the moment you would buy into this particularly investment now the rules of
grid trading is very simple every grid level has to have a transaction that has
a chance of success going upwards also when current transaction goes positive
at a grid level you cash it in so let's just go through that process and I'll
show you how it works so you start you you enter a by it goes positive touches
that grid transaction and you cash it in those little green money bags are
cashing in of your book transactions so you're 100 pips up you enter another buy
that's got the potential of going positive you then that one then goes
positive it touches the grid over here you cash it in and you enter another buy
that has the potential of going positive but the price decides not to go up any
more and now you into a retracement phase now remember previously I said
nobody knows how strong a retracement is with the system you don't need to know
because it will automatically get you in buying in a retracement up until the
point that it's stopped retracing so here we go
so we now remember that buyers been cashed in so at each grade level you
need a transaction that has the potential of going positive so here you
enter a bi which is the potential of going positive you then enter here by
that is the potential claim process when you enter year by that has a potential
of going positive it didn't does go positive you cash it in but because it's
already a buy at this level with the potential of going positive you leave
that and it goes up again and you cash in that by that slowly now because
you've already got to buy on that level you don't need to enter another buy so the
price goes up and you cash that buy-in over this so you've now cashed in a
couple of times the price then decides okay it's had enough now it's going it's
going down again so at that point you have to and it touches the next grid
line at that point you have to enter by because there is no other buy active or
at that level that if it's the potential of going positive
the price then goes up again and that buy goes positive you cash it in and
because there's already a by that that buy over there is still active
you don't need you into another buyer so at this point if you had just traded
normally and entered entered an investment over here you would only be
200 pips up because you would have gone from here today and that's 200 pips you
had quite a rough ride but in the end you would have been 200 pips up but
because you used the grid trained multiplier principles which I've just
shown you you have cashed in six times so you have cashed in 600 pips
compared to the 200 pips that the trend was so that's why we call it the great
train multiply it literally multiplies the benefit that you get from a train
now this is a sideways market you can even make a profit going downwards
buying going downwards the maths just works out that way so I hope you
understand how the grid trend multiplier works we'll have a look at a live
trading example to give you a bit more information on that okay so on your
screen you can see a chart of the Bitcoin since the first of June up until
today and essentially Bitcoin has travelled
quite well it has had a strong drawdown over there and has recently had a strong
drawdown over there and has gone upwards and is now almost at a new high so
that's the the trading history of Bitcoin over the last couple of months
now running the grid trend multiplier over that gives the following result so
this is using an eight thousand dollar account the net profit on that account
is twelve thousand dollars and the success rate is ninety eight percent is
in fact if we left it alone you'd have a hundred percent success rate and for
sure we have to cut the test off at one stage it made eight it made
fifty-one trades over this period the Bitcoin had a very strong trend and in
fact the stronger the train.the the less effective the Grid trend multiplier is but
there was a 6,000 pip trend that we measuring here and the total profits
relate to a 12,000 pip trend so it has basically doubled the effect of the
trend by duplicating a lot of trades and Will's you can see the general results
here very high profitability a very high success rate 50 consecutive wins so the
lost trade was negative because we had to stop the trade if we just kept kept
it going it will eventually go positive but that gives you an idea I just have a
look at the spread size the spread size is 3,200 points remember the the price
charts we looked at earlier a year is an equity chart you can see how straight it
goes all the way up and then you've got the lost little bit that made a bit of a
loss but there you can see those two draw downs that I pointed out in the
chart there they are and how they caused a bit of a drawdown and then came right
but the equity choice just goes up straight when you used in the grip trend
multiplier now I hope you can see this chart I'll zoom in as much as I can on
it to make it as clear as possible but similar to the example that I showed you
earlier what happens is is we're going to start with a buy and they had cashed
in and opened another buyer and then came down straightaway and open another
buy and then went up again and cashed that buy in and then went down and
opened another buy went down another good level and opened another buy went
up cashed in went up and cashed in and that is exactly how the glitt'ring
multiplier works the rules are pretty simple basically you have or have to
have a transaction that has the potential of going positive on each grid
layer when it does go positive you cash it in
and you open another transaction in the same direction as simple as that
and rewatch the explanation the part that I gave and then as the price went
up that open trade got cashed in that then got cashed in and then there was a
Buy opened and it took a long time to reach another grade level to be cashed
in but it did eventually same thing with that the next one over there and the
next one over there now you'll see a couple of most transactions yet at the
bottom that's because you can't actually regulate this EA to say hang on I don't
want to open too many negative transactions so you can't control that
aspect so that one cashed in and see how they all cashed in on a regular basis
and that's why if we just take that level over there you can see one cash in
to cash in three cash in for for cash ends on one level and that's why we call
it the grid trend multiplier these are actually transactions from the results
that I've just shown you okay now here we see the grid trend multiplier in
action it's running in visual mode on the Forex tester and you can see how it
opens by transactions at all the grid levels and then closes them off when
they go positive and this is running pretty quickly but you can see the
concept in action and how many times it multiplies the same transactions now
there was a big retracement it went all the way down open opened the buy
transactions and then cashed them in going all the way up so that's what you
want when you're trading nobody knows how far the retracement will happen but
if you opening a buy up at each grid level it takes the guesswork out of this
kind of trading so if you like the idea of grid trading and automated trading
then the grid train multiply is the deal yay for the crypto currency market
quite honestly the GRID trading in a bull market is the only way to go
otherwise you're just guessing it is so simple and so easy to automate now there
are few really important things that traders that are used to the forex
market need to be aware of firstly the leverage and margin requirements for
cryptocurrencies is very very low where you get a hundred to one
on a typical currency trade the general leverage your margins are one two three
instead of one to a hundred so a huge difference you in fact it is actually
better to trade this market with no leverage at all a lot of people do that
and when you use no leverage you don't need stops because you're treated as an
investment in a bull market it only stops at all
so leverage and margins is a big issue and you need to understand how that
affects your account it is very easy to get a margin call when your account is
nicely positive because you've run out of margin now the other thing that's
quite different is that the spreads are hundred times higher than in the in the
currency market so where a typical spread for a currency could be say three
perps it is 300 pips for Bitcoin so here you say that makes but go and
untrainable but it doesn't because these are compensation within that calculation
the pip values on the other hand are hundred times less the spread and the
pip values compensate each other but you need to get your calculations very
correct when trading the crypto market margins important spreads are important
and pip values are important if you get any calculations wrong you're either
going to make peanuts on successful deals all you're gonna get
a margin call for getting your sums wrong now this is a hot market the motto
in this hot market is IF YOU SNOOZE YOU WILL LOSE . Bitcoin was round about four
hundred dollars earlier this year it is now eight thousand dollars for a Bitcoin
and it has only just started and so have many of the other cryptocurrencies they
have only just woken up so I urge you to have a good look at this market and take
advantage of these fantastic moves that are happening I have done some other
videos where I explain how grid trading and dollar cost averaging can really
help you in investing in the crypto market if you don't have much capital
you can invest as little as a hundred dollars a week or a month into the
crypto market in fact that is a good way of investing because when the prices go
up you buy fewer of the expensive units when the prices go down you buy more of
the cheap units so investing the same amount of money on a regular basis is
the way to go if you have limited capital so have a look at the Grid Trend
multiplier and look at the concept a lot of traders actually trade the same
concept on a manual basis using pending orders targets and stops so I hope you
found this video interesting I hope I've given you some more information about
trading and investing in the crypto market and from me Alex du Plooy cherrio