Resources
- Book: Zero to Hero in Cryptocurrency Trading by Bodgan Vaida, 2023
- Book’s Official Code Repo: https://github.com/PacktPublishing/Zero-to-Hero-in-Cryptocurrency-Trading
- Book’s Colored Images as an official separate PDF: https://packt.link/pXrot
- All the links mentioned in the book: https://github.com/PacktPublishing/Zero-to-Hero-in-Cryptocurrency-Trading/blob/main/LINKS.md
Glossaries
#glossary As usual, “TC” for transaction cost.
Chap 1: Intro
Goal: Get an overview of:
- Market
- Get your mindset right
- Author’s self-intro
- Get familiar with book’s strucutre
Key points:
- Author did get some promising earnings using technical analysis.
- Inside trading is common
- When you like something, devote at least 12 hrs a day to that project.
- Author found a strat/technique by @EmperorBTC on Twitter.
- Author is hard-working, enthusiastic about crypto, did a lot of hardcore coding, reader, programmer, twitter, owner.
- Author likes to read, reading some 100ish books/year.
- More resources are found on Github.
Demystify the market
- Test strats you found online with solid backtesting and reasoning.
- Most of the paid signals, strats, are not any better than retail traders, they are for the money from you, not the actual strat they developed. Why they work is because it’s the bull market.
- Do not overestimate the agencies, companies that solicit their profile, they are not any better than yourself. Often their bots do not work if you actually backtest. Or their bots do not account for tcs or slippages.
- You can actually find traders on platforms like TradingView, but always backtest and make sound decisions. Account for taxes, fees, tcs, slippages.
Example: Terra Stablecoin Crash: https://www.forbes.com/sites/qai/2022/09/20/what-really-happened-to-luna-crypto/
Why traders fail and conclusions
- Higher probability to win is not Higher profit.
- Homo sapiens have echo chambers, no matter where. Be it YT, Tiktok, Twitters. Losers account the failing on themselves while seeing all the comments are promoting the idea.
- Backtest goes wrong. Always Ask:
- Frequency of the trades
- Volume/sizes of the trades
- Bull/bear market(market regimes)
- Overfitting/forward biases
- Paper tested/live tested
- Reproduce results
- Backtest does not promise future profits
- Outcome can be random
- Cognitive biases: https://en.wikipedia.org/wiki/Cognitive_bias#List_of_biases
- Before believing in something, understand behind-the-scenes, check premises, verify the results, then believe in it.
- Target moderately success, not like Bill Gates or Warren Buffett.
- Researching online is generalized, but when you see a doctor, the treatment is tailored for you.
- Don’t believe in get-rich-quick schemes.
Chap 2 & Chap 3 : Basics and Patterns
Goals:
- Get to know yourself
- Build your toolkit
- A first hands-on on candlesticks
- market regimes
Candlesticks AKA K-lines AKA OHLC chart
![[Pasted image 20250630142832.png]]
Incrypto, 1D candles = 24 1H candles
#KIM Play with TradingView to understand how higher candles composed of lower candles.
Market influence factors:
- Large funds: Large firms have quota on portfolios, sometimes they need to entry no matter how the price went.
- Speculators: Entries usually do not influence the price.
- HFTs, bots, algos and autos: Do 90% of the volume.
Types of traders:
- Scalpers:
- Day traders
- Short-terms
- intermediate/swings
- long-terms
Delve into the micros of candles:
Comparing the ticks BTCUSD from Coinbase and Binance: ![[Pasted image 20250630150227.png]] ![[Pasted image 20250630150231.png]] These are the orders filled. Upper ticks meaning someone just sold high. Lower ticks meaning someone just bought low. And they are definitely not the same for different exchanges.
For instance, in CB, 30th June 02:59:21, there’s a huge up tick, while in Binance at almost same time, movement is smooth, not huge up or down ticks(For some reason, Binance 1-second level is moving actually 3-5 seconds, while Coinbase can be steadily fetched for fixed 1-second.)
Based on the movements of the ticks, we have 3 types of markets:
- Bull(Ups)
- Bear(Downs)
- Sideways(Ranging)
#KIM You can’t usually identify the start of a bull market until you’re already in it.
Playground Observations: On 28th Jul 2022, after Fed conference, BTCUSD went up by 7.9%.
#KIM #Extremely_important 5 commandments on patterns:
- The story of the pattern is more important than the pattern.
- The story changes as the pattern develops.
- Every pattern instance has a random outcome.: The strat is profitable because of statistics, but because that particular trade is profitable.
- Seek confluence, not certainty: Seek convergence with other patterns to cross-examine the profitability of the strat to increase your win rate.
- There’s always a pattern you haven’t noticed: Bar Replay to practice pattern recognition skills.
![[Pasted image 20250701133634.png]]
#KIM When price goes up, you can phrase it like:
- More buyers than sellers;
- Bulls are in control;
- More demand than supply;
- Buyers are pushing the price up
- …
Candle patterns
#KIM The game: Buy Low, Sell High; Borrow High, Sell Low
![[Pasted image 20250701134740.png]] ![[Pasted image 20250701135549.png]] ![[Pasted image 20250701135705.png]] ![[Pasted image 20250701140313.png]] ![[Pasted image 20250701140551.png]] ![[Pasted image 20250701141423.png]] ![[Pasted image 20250701141514.png]] ![[Pasted image 20250701141529.png]] ![[Pasted image 20250701141615.png]] ![[Pasted image 20250701141628.png]] ![[Pasted image 20250701141941.png]] ![[Pasted image 20250701142031.png]] ![[Pasted image 20250701142138.png]] ![[Pasted image 20250701142152.png]] ![[Pasted image 20250701142248.png]] ![[Pasted image 20250701142349.png]] ![[Pasted image 20250701142517.png]] #KIM Ticks is the battlefield for bulls and bears.
#KIM It’s not guaranteed that hammers are 100% bullish or shooting stars are 100% bearish.
#KIM Usually the wick must be 2 times the candle body for the pattern to form.
Chart Patterns
![[Pasted image 20250701144155.png]] ![[Pasted image 20250701144222.png]] ![[Pasted image 20250701144239.png]] ![[Pasted image 20250701144251.png]] ![[Pasted image 20250701144311.png]] ![[Pasted image 20250701144320.png]] ![[Pasted image 20250701144334.png]] ![[Pasted image 20250701144345.png]] ![[Pasted image 20250701144407.png]] ![[Pasted image 20250701144418.png]] ![[Pasted image 20250701144456.png]] ![[Pasted image 20250701144534.png]] ![[Pasted image 20250701162419.png]] ![[Pasted image 20250701162432.png]] ![[Pasted image 20250701162604.png]] ![[Pasted image 20250701162613.png]]
Supply and Demand
Price & The Quantity Demanded is in an inverse relationship.
The law of demand
Price goes up, Demand goes down. Price goes down, Demand goes down.
3 Reasons for the law of demand:
- The substitution effect, if mid-tier grows too much, high-tier becomes more affordable.
- The income effect: Price goes up, less people can afford them, price does down, more people can afford them.
- Law of diminishing marginal utility, check here
5 influencers for demand:
- preferences
- number of buyers
- price of related goods
- income
- expectations
The law of supply
Positive relationship between price and quantity supplied.
5 influencers for supply:
- Price of resources
- Technology
- Government involvement
- Number of sellers
- expectations
Market Clearing Price
When demand and supply are in equilibrium, the price will be market clearing price. Change in the price will impact both the demand and the supply. It’s called shortage.
Price is too low, demand > supply, the price will be forced to increase. Price is too high, demand < supply, the price will be force to decrease. It’s called surplus. In a free market, the price will reach equilibrium.
Forces that moves Bitcoin:
- Regulations
- Institutions
- Retail Investors
- Alt coins
- Adaptation and sentiment of crypto
- Hash algos that generate Bitcoins and the mining tech
- …
Support and Resistance
- Support: More demand, lack supply
- Resistance: Lack demand, more supply
- The longer the period is hold, the stronger support/resistance;
- When the period is broken, it becomes the opposite
- The higher the time frame, the stronger the support/resistance
- If price reacted to the previous area, those areas become stronger
Chap 4 Technical Indicators
You can basically categorize indicators into:
- Trend analysis
- Trend indicators
- Momentum Indicators
- Volatility
- Volume
#KIM #Extremely_important Confirm prediction from at least 3 angles of these analysises.
Moving averages
![[Pasted image 20250703184753.png]]
Repainting
In a longer time frame, MAs will be repainted until the close formalize. Thus:
- #KIM MA is a lagging indicator
#KIM #Extremely_important you need to beat the market by quite a lot to be profitable, even with a fee that looks small(Considering 0.1%).