Price Wars: Interview with a full-time crypto trader
You’re about to read a transcript from my very first interview for the Price Wars series. I created this series because I believe there is a need for easily understood information about Technical Analysis, particularly in the Cryptocurrency space. Please enjoy and let me know if you have any suggestions for future content and/or guests in the comments!
Q: Tell the readers your name and a bit about your background.
A: My name is Brent Clarke. My professional background is in management consulting in corporate finance. I began trading the stock market in 2008 as a hobby. After having some initial success, I began to see the power of technical analysis (TA). I spent many years thereafter researching and studying TA. In 2013, I went to work for myself. I also began committing more time to trading, and swing trading the stock market more aggressively with a larger portion of my money. In 2016, I began to learn about Bitcoin and Cryptocurrency and spent many months learning as much as I could because I felt that the technology would change everything. I bought my first Bitcoin in early 2017 and never looked back. I now manage a small fund and trade cryptocurrency full-time.
Q: How did you get interested in TA?
A: TA piqued my interest when I started seeing specific setups playing out almost to a tee in the stock market. Naysayers would say that TA doesn’t work but, aside from the psychological aspect, most of it is actually mathematical and I have seen first-hand how price action is predictable. I’ve also proved many hard-fast naysayers wrong and have converted many non-believers, although this took time. The reason that TA gets a bad rap is that it is extremely hard to master — in fact, I would argue one can never fully master it — but there are so many people out there posting sub-par TA. People see that and think TA doesn’t work. But it’s hard to know who is good and bad until you’ve been studying it for years. 99.9% who play with TA are bad, or at least not good enough to win consistently and/or make a living at it.
Q: What was your most successful trade?
A: This is tough, as I remember the bad trades I’ve made much more vividly….or the ones I saw coming but just barely missed an entry. Those really sting and are cemented in my memory. In equities, it would probably be a trade I made on AMRN (pharmaceutical speculation) for about a 6x return. I actually just sold that one, which I’d been holding for quite a while, and it seems I sold the top at ~$22.8 which is a rarity but feels great when it happens. Also, CANN (marijuana spec) was also a good one a while back for about 10x.
As far as crypto, I am a US citizen so was unable to partake in much of the ICO frenzy that yielded such amazing returns in 2017. By the time I got involved with some international investors I know, ICOs were becoming losing propositions. So my best crypto swing trades, as far as multiples, have all been in the 5–10x return range…and the tickers are the likes of $VET ($VEN at the time), $TUBE (I became an advisor to them after the fact), $NXS, $TRIG, $WISH, $POT, $SUB…& probably 1 or 2 more that I’m forgetting. That said, the two crypto trades I’m the most proud of are:
1) selling most of my crypto stack in late August, after I realized Bitcoin was going to break down.
2) Buying the current Bitcoin bottom from $3100-$3200.
This has yet to fully materialize, however, so the jury’s still out on whether it was a good entry.
Q: Why is TA used and how can it be part (or all?) of a successful strategy? Are there any common misconceptions about it?
A: See above on misconceptions. I will say that TA is misunderstood in that most folks think there are certainties in TA. There are no certainties in TA, only probabilities using all the information available and coming to an educated conclusion. You may be wrong. But trading is not about being right all the time. It is about being right more often than not, minimizing your losses when wrong, and maximizing gains. It is also about risk management and capital allocation. A strong TA trader can be successful trading on 100% TA, without any fundamental knowledge. That is definitely possible.
Q: In a few words, how would you describe your trading strategy?
A: I prefer to use TA in conjunction with Fundamental Analysis, what I know about a coin or equity and what is going on in a macro-economic sense as well.
Q: What is a day-in-the-life of a crypto trader actually like?
How do you keep yourself calm and stick to your strategy when so often things won’t go your way?
A: Good question. My overall strategy in crypto has had to shift with the times. In 2017 and early 2018, I was mostly flipping Alts (any coin that isn’t Bitcoin) for quick gains when possible. Since August, my strategy has shifted to 90% holding positions for weeks or months at a time and 10% scalping/ inter-day trading. Bitcoin has been in a massive corrective structure since Jan 2018, and when I realized it was not going to break out bullishly, I had to shift my strategy. Keeping calm is something I work on all the time and does not come easily to me on a personal level. I use meditation, yoga and cold showers (yep, they work!) to keep my mind strong, in addition to regular gym and surf sessions (living in Southern California has it’s benefits :). But mainly it’s about watching macro trends. Understanding the overall direction that the market is going in, and trading along with it. Trying to catch knives like I did at $3100 is not something I would recommend for anyone without a TON of trading experience, because it is almost always a losing endeavor.
Q: What comes to mind when you think about the crypto market right now?
A: The current state of the market is confusion. Bitcoin broke out of a descending wedge bullishly about a week ago and has been trying to hold new highs since. Total crypto Market Cap has broken through strong resistance, as has Ethereum and other large caps, so for now I am bullish. Bitcoin shorts also remain near all time highs, so as long as they stay there I think the bullish narrative is intact. Almost all traders lose money trading, so they are almost always short when they should be long and vice-versa. That said, the US equities market is extremely bearish right now….so for Bitcoin to continue pushing up would be extremely notable. It has a ton working against it to do so. For now, we have to take the “wait and watch” approach. Bitcoin must break through $4400 to continue bullishly. If it drops through $3500, I believe new lows will likely be upon us. In my opinion, we have also not seen a true “capitulation and despair” selling day, so that is the D-day I am really waiting for before we can begin to normalize.
Disclaimer: None of the statements or answers contained in this interview should be taken as financial advice. This is for education and entertainment purposes only. Investing in cryptocurrency is very risky and you should be prepared to lose everything that you put at risk.