In today's fast-paced digital age, cryptocurrencies have emerged as a revolutionary financial asset class, capturing the attention of investors and traders worldwide. However, navigating the world of cryptocurrency trading can be overwhelming for beginners. Zero to Hero in Cryptocurrency Trading acts as a guiding light to navigate this complex realm.
This comprehensive guide to cryptocurrency trading empowers you to go from a novice trader to a proficient investor by helping you implement your own trading strategy. As you progress, you’ll gain structured trading knowledge through hands-on examples and real-time scenarios, bolstered by trading psychology and money management techniques. You’ll be able to automate your manual trades with an algorithm that works even while you sleep. You’ll also benefit from interactive teaching methods, including screenshots, charts, and drawings to help decode market operations and craft your unique edge in the dynamic crypto world. As an added bonus, you’ll receive ready-to-use templates to identify useful indicators, test your strategy, and even maintain a trading journal.
By the end of this book, you’ll be well-equipped to trade cryptocurrencies and automate manual trading to give you an edge in the markets.
Author(s): Bogdan Vaida
Edition: 1
Publisher: Packt Publishing Pvt Ltd
Year: 2023
Language: English
Pages: 414
Zero to Hero in Cryptocurrency Trading
Contributors
About the author
About the reviewer
Preface
Who this book is for
What this book covers
To get the most out of this book
Download the example code files
Download the color images
Conventions used
Get in touch
Share Your Thoughts
Download a free PDF copy of this book
1
Introduction to Cryptocurrency Trading
Disclaimer
My journey into trading
Overview of the book’s structure
Market myths
I will find a successful strategy on YouTube
I will make money paying for trading signals
I will run a successful trading bot
I will successfully invest in copy-trading platforms
And why do these strategies, signals, and bots fail?
Summary
Exercises
Answers to the exercises
2
Understanding the Basics
A trader’s psychology
Risk assessment questionnaire
Cryptocurrencies as an asset class
A candlestick story
Timeframes
Market participants
Types of markets
Summary
Exercises
3
Technical Analysis – Candles and Patterns
TradingView
Activities
Market patterns
I. The story of the pattern is more important than the pattern
II. The story changes as the pattern develops
III. Every pattern instance has a random outcome
IV. Seek confluence, not certainty
V. There’s always a pattern you haven’t noticed
Candlestick patterns
Hammer (bullish) versus Shooting Star (bearish)
Inverted Hammer (bullish) versus Hanging Man (bearish)
Doji (neutral)
Spinning Top (neutral)
Dragonfly Doji (bullish) versus Gravestone Doji (bearish)
Morning (Doji) Star (bullish) versus Evening (Doji) Star (bearish)
Bullish Engulfing versus Bearish Engulfing
Bullish Harami versus Bearish Harami
Three White Soldiers (bullish) versus Three Black Crows (bearish)
Marubozu (bullish or bearish)
Candlestick patterns questions
Activities
Chart patterns
Double Bottom (bullish) versus Double Top (bearish)
Inverse Head and Shoulders (bullish) versus Head and Shoulders (bearish)
Bull Flag (bullish) versus Bear Flag (bearish)
Cup and Handle (bullish) versus Inverted Cup and Handle (bearish)
Descending, ascending, symmetrical, and expanding triangles
Falling Wedge (bullish) versus Rising Wedge (bearish)
Ascending, Descending, and Horizontal (Parallel) Channels (or Rectangles)
Buildup, Breakout, and Breakdown
The Retest and the Fakeout (trend confirmation)
Differences between candlestick patterns and chart patterns
Chart pattern questions
Activities
Supply and demand
The law of demand
The law of supply
The market-clearing price
Activities
Support and resistance
Let’s speak in pictures
A game of randomness
Summary
4
Technical Analysis – Technical Indicators
Technical indicator categories
Trend indicators - moving averages
Repainting
Fees
Activities
Momentum indicators - relative strength index
RSI formula
Activities
Volatility - average true range
ATR formula
Activities
Volume - market volume
Activities
Trend analysis - divergences
Activities
Summary
5
The Centralized Exchange
What is the CEX?
Depositing money
Trading sections
Long versus short
Activities
Types of orders
Market orders
Limit orders
Stop limit orders
Stop market orders (only available in the futures markets)
OCO orders (spot and margin markets only)
Trailing stop orders
Other types of orders
Spot versus futures
Activities
Leverage and liquidation
Activities
The order book, market depth, commissions, spreads, and slippage
The market depth or depth of the market
Liquidity
The bid-ask spread
Slippage
Market makers
A metaphor for it all – 3Commas
Connecting to an exchange
SmartTrade
Paper trading/demo account
Your first (demo) trade
Activities
Summary
6
Money Management
Limiting losses
Limiting losses strategically
Limiting losses in the trading account
Limiting losses in trading
Activities
Position sizing
Method 1 – percent of equity (variation)
Method 2 – fixed fractional position sizing (also known as fixed risk position sizing)
Activities
Keeping a trading journal
Adjusting to the market
Handling emotions
Planning your trades
Your trading plan
Dollars or Bitcoin?
Summary
7
Finding Your Edge
Trading system essentials
Filters
The setup
The entry trigger
The stop loss
The take profit
Optional
The review
Identifying a trading pattern
YouTube/Twitter/Telegram/Discord/TradingView and other social channels
TradingView’s indicators and strategies
Learning PineScript or Python and get hired as a coder
Developing your own
Defining entry and exit points
Entries
Exits
The SHIELD mentality
Backtesting
Activities
Forward testing
Paper trading (the dry-run)
Live action
Testing checklist
Summary
8
Automated Trading
Technical requirements
Coding trading strategies – from Pine Script to Python and beyond
Coding an indicator in TradingView
Editing existing indicators
Making your own indicator
Converting an indicator into a strategy
Caveats when coding Pine Script strategies
Linking the strategy to a 3Commas bot
Coding a strategy in Freqtrade
Freqtrade intro
Directions for installation and configuration
Creating your own strategy
Trading ideas
Summary
Further reading
9
What’s Next?
10
BONUS – One Month of Trading
Preparing the tools
June 7, 2023
June 8, 2023
Trading
June 8 – BTC analysis
June, 10 – Trade 1 BTC/BUSD
Adding other coins to watch
June, 10 – Trade 2 ETH/BUSD
Using ATR bands
June, 10 – Trade 3 DATA/BUSD
June, 10 – Trade 4 GRT/BUSD
June, 12 – Trade 5 POLS/BUSD
June, 14 – Trade 6 XVS/BUSD
June, 14 – Trade 7 VIDT/BUSD
June, 14 and 16 – Trade 8 and 9 TOMO/BUSD
June, 16 – Trade 10 CELR/BUSD
June, 16 – Trade 11 ANT/BUSD
Using vFMSS
June, 16 – Trade 12 BAKE/BUSD (vFMSS)
June, 16 – Trade 13 VIDT/BUSD (vFMSS)
June, 17 – Trade 14 THETA/BUSD (vFMSS)
June, 17 – Trade 15 STG/BUSD (vFMSS)
June, 18 – Trade 16 GLMR/BUSD (the Crypto Pairs Screener)
Using SLs
June, 18 – Trade 17 ACH/BUSD (vFMSS)
June, 18 – Trade 18 KAVA/BUSD (vFMSS)
June, 18 – Trade 19 HOOK/BUSD (vFMSS)
June, 18 – Trade 20 GFT/BUSD (vFMSS)
June, 22 – Trade 21 KEY/BUSD (the Crypto Pairs Screener)
June, 23 – Trade 22 AGLD/BUSD
June, 22 – Trade 23 GLM/BUSD
June, 24 – Trade 24 OMG/BUSD (the Crypto Pairs Screener)
June, 25 – Taking a break
June, 26 – BTC analysis
June, 28 – PUNDIX/BUSD (a new trick for you)
June, 28 – XLM/BUSD
Final results
Index
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