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Part 1. Knowing what you are up against

Explain and discuss different trading strategies.
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stephan
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Part 1. Knowing what you are up against

Postby stephan » Wed Feb 10, 2016 2:31 pm

So you want to start at (automated) trading.... and you have seen those nice price swings or you have been told such great stories about people making lots of money from crypto coins? Well i am giving it my best to make you able to do exactly the same. But it will be all up to you in order to do it and decide on risks but the reward is all yours as well.

Before i make an pro out of you i will be breaking your mindset first, all what you have seen so far is now lost. Because do you have any idea what you are up against?

Actually you are up against...
- The fee costs
- The price spread


Of course the fee costs are pretty straight forward, each exchange has its fee percentages and those apply. The higher the fee is, the harder it is to get profitable. So by essence you must always prefer the ones with the lowest fee.

TIP: We have listed all the exchanges and there fee costs inside the "Platform Information" page. This makes it easy for you to make an compare.

Secondly the price spread, this is pretty unknown to most people to let me explain it for an moment. During trading an exchange we are working with an orderbook, inside this orderbook people place there orders. We got an bid side and an ask side. When you trade at real-time you want to target the orderbook. So you apply those prices.

The prices of the orderbook exists out of 2 prices, but what you see at the chart is only 1 price. Candle charts are build up from the last order progressed at the exchange. This means it can be both an bid or ask order which is filled. This is why you should not trust candle charts completely, its better to observe the spread chart because then you can truly see what you are up against.

cexiospread.png
Price spread of Cex.IO at Btc/Usd


The charts above are spread charts. The green part is where you can buy the coins and the red part is where you can sell the coins. The part in between is where nothing happens. So no order gets filled in there.

When an bot runs then it will target the green and red parts to buy and sell. So this is the "hidden" spread you need to overcome aside from the fee costs.

I know seeing this and realizing what it means is not funny, it mean an very lot and it will impact about any plan you might had. But remember when i wrote i will break your mind first? With knowing what you are up against you are now better prepared.

You will now hopefully select the exchange with the lowest fee and the one with the smallest price spread.

Note:
The story about people and getting rich from alt-coins comes from long run investments. As you now might understand the spread will be killing for alt-coins so they must apply an long run investment strategy in order to be successful.

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Feel free to leave an replay or to ask any extra question you might have after reading this text. But please keep in mind i will continue the course with parts 2,3 and so on.
Join the telegram group too: https://t.me/haasonlineofficial

Eynvent
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Re: Part 1. Knowing what you are up against

Postby Eynvent » Sat Feb 13, 2016 11:45 pm

Thanks Stephan,
This is very useful for for someone like me who is learning on how trade and to use HaasBot.
I am looking forward for your parts 2,3,4, etc.

ch405
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Re: Part 1. Knowing what you are up against

Postby ch405 » Mon Feb 15, 2016 2:06 pm

Great post! Looking forward to more.

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stephan
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Re: Part 1. Knowing what you are up against

Postby stephan » Tue Feb 16, 2016 4:31 pm

Thanks!, I am already writing the next part where i shall explain an approach how select an indicator and how to tune it. I think i will be ready this week.

Edit:
I am sorry for the delay, but next will be an bulk release of more parts at the same time because i could not explain everything within 1 part. Next will be:
Part 2. Price Trend identification
Part 3. The wonderful world of trading indicators
Join the telegram group too: https://t.me/haasonlineofficial

Matej
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Re: Part 1. Knowing what you are up against

Postby Matej » Fri Apr 21, 2017 9:50 pm

stephan wrote:
Of course the fee costs are pretty straight forward, each exchange has its fee percentages and those apply. The higher the fee is, the harder it is to get profitable. So by essence you must always prefer the ones with the lowest fee.

TIP: We have listed all the exchanges and there fee costs inside the "Platform Information" page. This makes it easy for you to make an compare.



It would be nice to have an update of the fee costs. I read somewhere that the 0% fees in the Chinese exchanges are history.

bodie
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Re: Part 1. Knowing what you are up against

Postby bodie » Tue Sep 19, 2017 1:14 pm

Part 2 on the way?


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