Nick Patel, also known as “cointradernik” on Twitter, is a full-time trader, investor, writer, and consultant in the digital currency space. He has been active in digital currency markets since the year 2013. Since then, Nick has had many followers on Twitter, where he publishes market analysis along with commentary charts. He also writes a digital currency report on his blog, (An Altcoin Trader), and shares his personal views on market trends.
In an interview with Nick, the Binance Exchange Academy section asks him about his trading, investing, major strategies and lifestyle as a digital currency trader and investor. Here’s the fascinating interview below:
Binance: How did you start trading digital currencies?
Nick: Before I knew anything about digital currencies, I joined the Dodge Coin community on the Reddit website in December 2013, and finally, in February 20214, I followed digital currencies on Twitter. That same month I started trading on the MintPal currency exchange.
Binance: Tell us about your first experience in trading. Did you have a bad deal?
Nick: My worst deal was in my early deals. I remember I signed up for Montreal in February 2014 and bought Mazacoin because it had been rising sharply for several days. Finally, I lost two-thirds of my initial capital on that deal.
Binance: How long did it take you to finally achieve steady profitability?
Nick: It took about 4months for digital currency trading. It was mostly for my good fortune that I started out early 2014 and that helped me learn, adapt to the situation, and refine my strategies for the rest of the year. It took me about a year to make a profit out of digital currencies.
Binance: Are you still trading in markets other than a digital currency?
Nick: Yes, I trade in all markets. Outside of digital currencies, I deal with metals and indices (stocks and currencies).
Binance: What is the best deal you’ve made?
Nick: As a percentage, I bought Neutron Digital Currency for about 130 Satoshi (0.00000130 BTC) and sold it for about 6800 Satoshi (0.00006800 BTC) which made my capital 50 times greater.
Binance: What do you think makes the difference between a good deal and a bad deal?
Nick: A good trade is a trade in which you follow exactly the rules [and the plan]. A bad trade is a trade that you set aside your rules and make an emotional decision. In the distinction between good and bad trading, it does not matter whether you profit or lose.
Binance: Many successful traders agree with your answer. A good or bad deal is not determined by the outcome. A good trade can be disadvantageous, and a bad trade may lead to profit. The key is to adopt a good and long-term strategy.
What lessons have you learned since we’ve been through a few years of a declining market for Bitcoin to date?
Nick: It was a time when we (including myself) were only paying attention to the bitcoin price of the Altcoins. Although we had to consider the dollar price. It was here that the digital currency bubble struck on January 2018. After that, I incorporated both the price (dollar and bitcoin) and the historical conditions of digital currencies into my decision-making process.
Binance: It’s interesting how popular mindsets in social networks can shape and reinforce people’s orientation. Since we are in the heart of the digital currency community, which trader do you most follow?
Nick: Tom Dante is one of the most important people I follow in my decisions, especially when I take notes and want to make my prediction a little bit more accurate.
Binance: Improving a strategy is an unlimited process for investors. What is your strength and how did you find it? What advice do you have for newcomers looking to find their strengths in the market?
Nick: My main strengths are rotational positions, where I find projects that are well below their true value and have good fundamentals, and keep them throughout their marketing cycle. I recommend newcomers to take daily notes to identify their weaknesses and strengths so that they write down all the details.
Binance: Probably the most successful traders will write down their trades. Performance evaluation (especially at start-up) is essential to identify strengths and weaknesses. Are you dealing with a few different strategies or just one or two specific plans for yourself?
Nick: I have a few basic techniques based on technical analysis that I use for my weekly or intra-month trading. For long-term trading, I use fundamental analysis extensively. At the very cheap prices that have been unprecedented in the history of digital currency, I make purchases and maintain them throughout the market cycle (from descending to ascending).
Binance: What is the longest time you have kept a digital currency?
Nick: More than a year.
Binance: It’s been a lifetime in the crypto world for a year. Entering a long-term position on the one hand and managing risk in this vibrant market, on the other hand, is a major challenge. What is the best criterion for identifying a profitable digital currency?
Nick: The export structure of digital currency [and manner of distribution]. Inflation is one of the criteria we can always use to find out if a digital currency is coming or going.
Binance: Do you use intra-network metrics (such as hash rates or transaction volumes) in your strategies?
Nick: I look at the volume of transactions on the chain (network) to compare it to the volume of speculative transactions (on exchanges). I also look at the list of the richest (Richlist – largest holders) of digital currency.
Binance: Which do you prefer, technical analysis or fundamental analysis?
Nick: For the long-term investment, I start with the fundamental analysis and the fundamental factors of digital currency and then with the technical analysis I take the final decision. For the short-term weekly trades, I only use technical analysis. For leverage trading, I use only technical analysis.
Binance: Let’s look at the more tangible aspects of trades that are important and that no one will pay attention to. How does your trading day go, and how do you adjust your lifestyle despite staring at charts?
Nick: I check out the whole market on Sundays (weekends). So I know what I’m going to do during the week. I write my schedule, mark my charts, set alarms for important price levels, and write exactly what I’m going to do at these prices. Then I execute my trades and look at them every now and then.
Since most of my trading takes more than a week to complete, I spend most of my workday working on blogs, freelancing, reading, sports, and more. I don’t stare at charts. That’s why I decided not to trade every day. Since I work at home and set up alarms and systems for myself, I don’t have to look at the chart. I’m not a fan of this lifestyle, so I decided not to trade on a daily basis.
Binance: What are the most important tools you use for trading?
Nick: I don’t need a lot of tools. I have a laptop, an extra monitor, a tablet, a TradingView account, and a few accounts on the broker sites for the assets I trade. Nothing else is needed.
Binance: It would be a shame if we ended the interview without predicting the price. At the end of 2020, where do you see bitcoin?
Nick: 26000 dollars
Some key points to learn from Nick Patel’s talk:
Have your own rules and plans and act accordingly. Avoid emotional bargaining. An emotional decision without a plan does not produce good results.
Carefully write down the details of your transactions and constantly seek to improve your strategies.
Sometimes, it may be good to stop and see if other people’s orientation will affect your transactions.
Don’t try to complicate things. A good strategy with a simple plan can work for you for a long time.
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