A closely-followed Bitcoin trader is unveiling his winning crypto trading strategy that allowed him to grow 0.2 BTC into $100,000.
In a new Venture Coinist episode with Luke Martin, the pseudonymous trader SalsaTekilla offers his insights on how to manage risk.
“I think of the market in [terms] of a constant dynamism in the sense that whenever I enter a trade, my expectancy changes. Let’s say I enter at $11,800 a long position and I’m targeting $12,000 and my stop is $11,700. My risk-reward [ratio] is two to one…
As the market moves, my risk-reward also changes. Let’s say we’re at $11,900. Suddenly, I’m risking $200 to make $100. So I always evaluate my positions whenever I’m in one.”
SalsaTekilla, known as one of the most transparent traders in the crypto community, is at the top of the leaderboards in Bybit’s world series of trading.
As a day trader, SalsaTekilla says his edge comes from scalping, which is a trading technique that leverages volatility in the lower timeframes.
“The longer you’re in the trade, the more outside factors can affect it…. If you are in a trade for days, you give the market a lot more time for such news that affect the market to change conditions. The more time you’re in [a trade], the more risk you take of outside factors affecting your trade.”
The crypto strategist also points out that as a day trader, he consistently monitors the market.
“I use different tools, the news. I try to have a decent newsfeed. I use not only Japanese candlestick charts, but I watch a bit the order books. I watch on-chain analysis, the news, certain market statistics that I have.”
The trader notes that he uses all of the data to evaluate whether he should take a certain trade and how he should manage it. In addition, SalsaTekilla emphasizes a few key strategies when trading on leverage.
“When you’re leveraged trading, you need to use a stop loss. You need to have an invalidation plan and you need to keep your risk very tight.”
For those who are looking to trade for a living, SalsaTekilla explains why he does not recommend trading money that you don’t have.
“If you don’t have spare money to trade from and to live off, you have a way lesser edge in a sense that if you’re pressured to make money and you need to make money trading to live, you’re going to have a lot of pressure on your shoulder and you might take some shit trades.”
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