wHicH eXcHaNgE sHoUlD i uSe?

Scott here, filling in for Mole while he’s yodelling.

Mole mentioned he’s been getting some hate mail about adding more coins to the tradeable universe so I thought it might be helpful if I explain the rationale behind it (you make more money) and some solutions to common problems that won’t take you more than 10 minutes to fix.

I think we can all agree that the strength and ferocity of the recent bear phase in crypto has had the effect of a “great reset”.

In effect, it’s a whole new bull market.

And one of the things we know for SURE about bull markets is that the winners in one bull are not the winners in the next.

The hot stock in 2000 was Cisco, it was nowhere in 2007.

The hot stocks in 2007 were Rio Tinto and BHP… they are nowhere now.

The hot coins in the 2017 altcoin bull were ZRX, TRX, NEO, OMG… again well back in the pack today.

And the winning coin in the first half of 2021 by a mile was DOGE (which we rode like bosses and jumped out at the right time)

This is a chart of all the major altcoins off the July lows. DOGE is up a pathetic 19% while LUNA for example is up 269%

When Mole and I got up to our elbows in the data the vast majority of the coins we owned before are recovering, but way slower than the new breed.

That’s a big big problem. Momentum works because by riding the winners you are holding the hot coins. But nobody likes a losing coin, so holding them is likely to underperform the market.

For a neat illustration this is a chart of two different stock trading systems going all the way back to 1800

Trading system rules:

System 1:

On the first day of the month list all the stocks traded, ranked by the last 12 month returns. Buy the top 1/3, equally weighted.

System 2:

On the first day of the month list all the stocks traded, ranked by the last 12 month returns. Buy the top 1/3, equally weighted.

Sorry about the low res image, but you get the idea. For 200 years the top performing stocks did great and the worst performing stocks sucked.

“Winning is a habit. Unfortunately, so is losing” Yogi Berra.

Mole and I aren’t about underperforming the market. And if we kept only underperforming coins in the universe we run a very real risk of the whole system not working at all.

What we did is expand the universe with some of the early winners, which are available on binance, but not binance.us and kraken.

Which is a good thing.

But you need to make some more exchange accounts. Yes I know it’s a bit of work, but let’s be clear.

This is NOT a small effect. DOGE, up 19% in a few weeks vs LUNA, up 269%

Extrapolate through a 6 month bull market and you are talking at least hundreds of percent difference at the end.

It’s not a decision we made lightly.

Here’s the deal. All coins are available on Binance.com. Some are missing (not that many) from binance.us and a lot are missing from Kraken.

Here’s several methods of solving the problem.

If you are in the UK, EU, Australia, Hong Kong, Singapore, New Zealand, Japan – Just open a binance.com account.

If you are in the USA you have several options.

Easy option – http://www.kucoin.com  – good exchange, easy to use, been around for years, accepts US customers without any drama

More complicated but ultimately more control option is to join one of the DeFi DEX (distributed exchanges). http://www.uniswap.com and http://www.sushiswap.com are the two biggest.

One thing I will say about the DeFi exchanges is that you need to use limit orders and not market, since the market makers are real sharks.

Anyway, I hope that clears things up. We don’t make system changes likely, and the only reason we would do it is because it both reduces the risk of things going wrong and increases the money you are going to make.

From where I sit the evidence is very clear that we are entering a fabled “turd of a turd” wave. Bitcoin, Ethereum AND altcoins all moving together, with small cap, medium cap and large cap altcoins going up at the same time.

We haven’t seen this since 2017.