BEST Crypto Trading Strategy Could 10x Your Portfolio

MoneyZG

Introduction to Making a 10x Return on Investment

To make a 10x return on investment within a short time frame requires a tactical approach, including timing the market and possibly using leverage.

Identifying Trend Rate of Growth and Price Cycles

  1. Charting the Asset: Use platforms like Trading View to chart the asset and identify its trend rate of growth.
  2. Momentum Indicators: Utilize indicators like the Hakin Ashi RSI oscillator to find where the price is too expensive or too cheap in relation to its longer-term trend.
  3. Identifying Price Cycles: Look for distinct price cycles within the asset's longer-term trend, which can indicate opportunities for trading.

Long-Term Investing vs. Short-Term Trading

  • Long-Term Investing: Focus on assets with a reliable trend rate of growth. Calculate the compound annual growth rate (CAGR) to estimate how long it will take to make a 10x return.
  • Short-Term Trading: Requires identifying assets with growth potential and timing market cycles. Leverage can be used to increase potential returns but also increases risk.

Calculating Time Horizon for a 10x Return

  • Use the CAGR formula to estimate the time horizon for a 10x return on an asset. For example:
    • S&P index at 12% CAGR might take around 20 years.
    • NASDAQ index at 18% CAGR might take around 10 years.
    • Bitcoin at 40% CAGR might take around 6-8 years.

Tactical Trading for Short-Term Gains

  1. Identifying Drawdowns: Use on-chain data and momentum indicators to identify drawdowns within an uptrend.
  2. Dollar Cost Averaging: For investment portfolios, buying during drawdowns can be a strategy.
  3. Leverage Trading: For short-term trading, leverage can increase potential gains but also increases risk. The key is finding the right balance of leverage to allow for breathing room in case the trade does not immediately go in the desired direction.

Risk Management in Leverage Trading

  • Understanding Leverage: 2x leverage, for example, means $1,000 can trade as $2,000. A 50% move in the market can result in a 100% move in invested capital, but it also means a 50% drop can wipe out the original investment.
  • Setting Parameters: Knowing the average drawdown (e.g., 20-30%) can help in setting entry points and managing risk.

Trading Out of Cycles

  • Identifying Tops: Use momentum changes to identify when to trade out or not take long positions.
  • Waiting for Dips: For investors, waiting through cycles can be beneficial as assets with strong growth trends will eventually recover and continue to grow.

Conclusion

The strategy for making a 10x return involves choosing between low-risk, long-term investing and higher-risk, shorter-term trading. Understanding the asset's trend rate of growth, identifying price cycles, and managing risk are crucial components of any strategy. Each individual can tailor this approach based on their risk tolerance, investment goals, and preferred assets.