When trading, one of the biggest question me and you will ever want to answer is knowing when to sell or when to buy. Just never forget, buy cheap and sell expensive; but the real question is when. If a pair is having a bullying trend, should I sell right away or wait because I may lose some potential earnings; on the other hand, if the pair is having a bearing trend, should I buy right away, or should I wait a little longer? Let's say trading is the art of predicting the future by knowing the past.
Thank god, trading experts have given us metrics and one of them is EMA. I will show you some very basic use of EMA to help you decide when to buy or sell.
The RSI is a momentum metric that helps to determine when it is a good moment to sell or buy. It's valued with nondimensional units between 0 and 100. The basic formula to calculate it is given by:
RSI(t) = 100 - 100 / (1 + RS(t))
RS(t) = Average gain of up periods during the specified t time frame / Average loss of down periods during the specified t time frame
The interesting thing on this metric is that it will work regardless the range of the variation. Thanks to this metric, you can see the likelihood of a given price. But, you can use it to know when to trade. Usually, when RSI returns a value higher than 70 it means it is a good moment to sell and lower than 30 it would be a good moment to buy.
With a little more of statistics, this metric could be used determine if a currency is a candidate for trading. For example, if a pair of a given time period hits many times the low and high thresholds, it could indicate the currency has enough fluctuations for trading. Of course, more conditions must meet.
After getting more confident with the trading thing, I wonder if I could make a bigger profit if I do trading with more pairs. However, during my readings on the Internet and chatting with other traders in forums I found that it is not recommendable to trade against all pairs the Exchange offers. For example, Poloniex offers like 80 different pairs (most in the Bitcoin market).
Of course, as a newbie, I decided to ignore that advice and I traded with all available pairs as possible. Here it comes the problem: dust. Although it was making a profit, at the end I had a lot of dust. Dust is the balance that is not tradable, for example, Poloniex will not allow any trading that is less than 0.0001 in any market (after fees); any balance equivalent less than 0.0001 BTC (for Bitcoin market) is considered to be dust.
Here it is my solution to this problem while I try to answer the question: What pairs should I trade?
I must say, studying a Master's open your eyes in many ways. One of them is the know-how about how to actually do business with IT. As a Computer engineer, all IT is just IT. ITAM gives a very good program called MTIA which it is in my opinion, the perfect bridge between IT and business management. It will give you the tools to monetize the technology. I might think the MTIA program might see the future of the FinTech in a very naive way (the program, at least in 2007-2010, did not have any subjects related to cryptocurrencies).
I must recognize I delayed getting into cryptocurrencies. Although I was aware of Bitcoin, I did not take it seriously because I was not able to go to Walmart and pay with it. At that time I did not completely understand how to convert the cryptocurrency to my local currency.
In late 2016, I started to study the cryptocurrencies and built a little miner. After some readings and studies about the cryptocurrencies fluctuations, its relationship with trading, and financial impacts, I took the call not only to mine them but to make them as much as profitable I could. I decided to start trading.
As a freelancer, business man or whatsoever the term could fit one of the biggest dilemmas I have had is the pricing. You can not give your time, knowledge and effort for free, but while competing against others, I have found that many customers take the pricing as the first factor. So, here it is a way I have found to make this very attractive without hurting my working effort. I hope this will help others as well.
The first thing is that this technique only applies when you are selling products with a scale scheme. For example, giving a course and billing per participant, building a server cluster and billing per server setup, software licensing, it could even apply for support hours if you know how to deal with that, but I wouldn't recommend for that.