Dialogue with trader Raxy: After learning all the indicators, making big losses and big profits, I only use 2 strategies

The following text is compiled from the series Twitter Space #DialogueTraders, hosted by FC, founding partner of SevenX Ventures, Twitter @FC_0X 0

This episodes guest: Raxy, independent trader, Twitter @Raxy 2001

About Raxy: From a Tier 1 Investor to an Independent Trader

In January 2021, when the platform coins of various exchanges were hot, Raxy entered the Crypto industry. After working on the GameFi project, he entered the VC industry and worked at Jsquare and DFG.

In his more than two years of VC career, Raxy has looked at hundreds of projects. He left VC at the beginning of this year and systematically learned and did trading on his own, transforming from a first-tier investor to an independent trader.

The progress of trading starts with losing money…

After the sharp rise of BTC at the beginning of the year, altcoins also had some market conditions, so Raxy still used the valuation nesting logic of 2021 to trade Altcoins: for example, the primary market thinks which track will be popular and what the valuation is, so it looks for fully circulated targets with similar backgrounds/tracks, similar and reasonably valued targets in the secondary market and buys them.

Raxy made some money using this method, but starting in March, the market took a strange turn.

By comparing the market share of BTC and USDT, Raxy found that it is too difficult to make a profit from altcoins. You either have news or have a deep understanding of this thing, and can look at the daily and weekly charts and buy at the bottom on the left. Later, he re-examined his trading strategy and finally concluded:

では 暗号 market, Bitcoin is the most suitable variety for full gaming. Therefore, he gradually shifted his trading focus to Bitcoin.

Currently, Raxy has approximately two million USD in funds. His position allocation is clear:
1) 80% -90% of the funds are invested in the spot market, using the Turtle Trading Method combined with key moving average indicators to capture market trends.
2) The remaining 10% -20% is used for contract trading. This part of the funds mainly relies on traditional chart pattern analysis and some small technical indicators to assist decision-making.

By observing the practical experience of others and combining it with his own market exploration, Raxy has gradually formed a trading style that suits his personality and goals through continuous practice and adjustment, and can flexibly respond to market changes.

How to trade with high winning rate through moving average?

Raxy believes that the market is divided into two structures: oscillation and trend, and the two will always switch back and forth. The only difference is that everyones understanding of the level of oscillation and trend may be different from others. For example, a daily oscillation may be a one-hour unilateral market.

Raxy uses a moving average system based on EMA, which reflects the average price in the past.

Raxy pays special attention to the two moving averages, EMA 20 and EMA 200, and uses common technical indicators such as MACD, RSI and SRSI to confirm the trend. His specific operating rules are very clear:

1) When EMA 20 crosses EMA 200, it is considered a buy signal and a buy operation is executed;

2) When EMA 20 crosses below EMA 200, a sell signal is issued and a sell operation is executed.

In this way, you can achieve the following: you must be there when the market rises sharply, and you must be absent when the market falls sharply.

However, moving average trading is not perfect. It actually lags behind the market reaction. In a volatile market, due to frequent price fluctuations, the moving average will cross back and forth, resulting in greater wear and tear, which means that false signals may be generated many times during the volatility, resulting in unnecessary trading losses.

However, Raxy emphasized that the biggest advantage of this trading strategy is that it is simple and clear to operate, does not require complex analysis or subjective judgment, and can avoid being disturbed by market noise and emotional fluctuations. Therefore, it is suitable for people whose mentality is easily affected and whose emotional control ability is weak. As long as it is strictly implemented, it can reduce the impact of subjective judgment and avoid making wrong decisions due to emotional fluctuations.

Can altcoins use moving averages to ガイド trading?

Raxy believes that the trading of altcoins can refer to the moving average strategy, but the effect will be relatively worse.

The characteristics of altcoins are high Sharpe ratio and violent fluctuations, often accompanied by large ups and downs. When operating, Raxy regards the daily EM 20 as an important reference indicator:

1) If the altcoin fails to stand above the daily EM 20, he usually does not make a lot of moves;

2) Only when the daily EM 20 rises or is broken, he believes that the market may have real purchasing power, accumulation or a trend of pushing up prices. At this time, he can trade according to the moving average rules, that is, buy when it is above and sell when it is below.

Raxy also mentioned that altcoin trading has higher requirements for profit taking and position management:

Taking profits requires precise judgment, and buying in batches must be strictly controlled and subject to detailed mathematical calculations, otherwise the overall profit and loss ratio will easily become unbalanced.

While on a daily level, moving average trading is effective in reducing volatility wear and tear, on smaller levels, such as the 1-hour or 4-hour levels, the situation becomes much more complicated.

Therefore, Raxy prefers to use the daily level to guide operations.

What exactly is the Turtle Trading Method?

The Turtle Trading Method is a trend trading strategy that is effective in a market environment with clear trends and less noise. This method relies on clear buy and sell signals to confirm the trend direction of the market by breaking through key points (such as recent highs or lows).

In practice, Raxy is a combination of Turtle Trading and Moving Average, with Moving Average as the main focus. Turtle Trading can basically ensure that the trend is there, and small-level Moving Average can ensure that you know when the short-term trend ends. For example, if you set the time to 1 hour or 4 hours, you will most likely know an exit position, including with some MACD and other indicators.

I have seen too many indicators. I have seen almost all the methods and strategies in the market, and I have lost money in all of them. So in the end, I chose indicators that everyone has heard so much about, such as MACD and trading volume. They are very simple.

Raxy also mentioned that the logic of choosing the Turtle Trading Method is the same as that of choosing the moving average. To judge the rise and fall of prices, there are too many things to think about. First, it is not easy to figure it out, and it is easy to make mistakes. It is better to choose a simple and clear system to avoid messy thinking.

What indicators are used to “escape the top”?

SRSI is an indicator that Raxy attaches great importance to. SRSI is an algorithm based on the superposition of dynamic strong and weak RSI.

1) When SRSI crosses, Raxy will adopt a defensive strategy of reducing positions

2) When SRSI crosses the golden cross, he will consider reopening the position.

Although SRSI can effectively reflect the purchasing power of the market and the trend in the future, it is still difficult to accurately judge the top in a rapidly changing trend market.

Raxy also looks for clues from the behavioral logic of large investors. For example, when large investors stop buying in large quantities through the spot market and start to use other methods to obtain profits, it may mean that the willingness for further price increases has weakened, and the markets upward momentum may be coming to an end.

But overall, determining market tops is always a challenging task, and no single method can be completely accurate in predicting them.

The “Stop Doing List” from two big losses

Raxy mentioned that the core of the Stop Doing List is to avoid incorrect trading behaviors caused by mentality problems.

First, you should not set unrealistic round-number targets for profitability.

“When you make a lot of money in a short period of time, beyond your expectations, you will most likely set a goal for a certain round number. And once this goal is established, that day is almost the day you start to lose money – 100% without exception.”

In addition, you should always respect the signals of the trading system and allocate positions reasonably to avoid potential losses caused by subjective blind self-confidence.

Also, you should never run two strategies in the same account, as this would cause chaos.

Six necessary mentalities for good trading

In the conversation with Raxy, he also shared some of the mindsets he learned in the process of transforming into a trader, which he hopes to share with you:

1. Trading is like a hell-difficulty copy in the game of life. Once you complete this copy, you will have a deeper understanding of various other things.

2. Investing in projects in the primary market is actually investing in people and their character, while the secondary market is ultimately a matter of position management.

3. There is no perfect trading strategy. You must learn to judge trend cycles or shock cycles and hedge in different market stages.

4. When you reach enlightenment in trading, you start doing subtraction: no longer fantasize about getting rich quickly, because you know that the profits beyond your cognition will be returned to the market over time; you no longer have to worry about the serious consequences of continued losses, because the losses are all within your plan.

5. Follow the general trend and there will be higher certainty.

6. Opportunities are always there. What matters is whether you are still there.

最後の言葉

I have talked to so many traders and found that everyone is looking for themselves in the end.

What is my relationship with the market? Where should I be placed and what should I do to be comfortable and make money? Finding a trading strategy that matches my personality and continuously correcting the relationship between personality and trading strategy is a fundamental and particularly important thing for traders.

This article is sourced from the internet: Dialogue with trader Raxy: After learning all the indicators, making big losses and big profits, I only use 2 strategies with a winning rate of 80%

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