Get started

Hacks

Probably the Biggest Trading Advice CollectionHey traders! We hope you find these trading advices helpful! If you appreciate our ideas, give us a quick 💜💜 Top 50 Trading Advices 1. Risk Management is Key: Always define your risk before entering a trade. Use stop-loss orders to limit potential losses and protect your capital. 2. Stay Informed: Keep up with financial news and events that can impact your assets. Use economic calendars and news alerts to stay ahead of the curve. 3. Keep Emotions in Check: Emotions can cloud judgment. Stick to your trading plan and avoid impulsive decisions, especially during volatile markets. 4. Use Technical Analysis: Learn to read charts and use technical indicators. They can provide valuable insights into market trends and potential entry/exit points. 5. Diversify Your Portfolio: Don't put all your eggs in one basket. Diversification can help spread risk and improve long-term performance. 6. Paper Trading: Practice with a demo account before risking real capital. It's a great way to test strategies without financial consequences. 7. Continuous Learning: The markets evolve, and so should you. Stay updated with trading books, courses, and webinars to refine your skills. 8. Keep a Trading Journal: Record every trade, including your thoughts and emotions. It's a valuable tool for learning from your successes and mistakes. 9. Trade During Peak Hours: Liquidity tends to be higher during peak trading hours, which can lead to tighter spreads and better execution. 10. Stay Disciplined: Discipline is the cornerstone of successful trading. Stick to your trading plan, even when things get tough. 11. Monitor Market Sentiment: Pay attention to market sentiment indicators, like the COT (Commitments of Traders) report, to gauge how traders are positioned. 12. Use Limit Orders: Instead of market orders, consider using limit orders. They allow you to specify the price at which you want to enter or exit a trade. 13. Avoid Overtrading: Set a daily or weekly trading limit to prevent overtrading. It's easy to get caught up, so discipline is crucial. 14. Backtest Your Strategies: Before deploying a new trading strategy, backtest it using historical data to see how it would have performed in the past. 15. Stay Patient: Wait for the right opportunities. Not every price movement is a trading opportunity, and sometimes it's best to sit on the sidelines. 16. Understand Correlations: Be aware of how different assets are correlated. Understanding these relationships can help in risk management. 17. Keep an Eye on Fees: High trading fees can eat into your profits. Look for brokers with competitive fee structures to maximize your returns. 18. Network with Other Traders: Join trading communities or forums to share experiences and learn from fellow traders. Collaboration can be enlightening. 19. Adapt to Changing Volatility: Adjust your trading strategy based on market volatility. Some strategies work better in volatile markets, while others shine in calmer conditions. 20. Mental and Physical Well-Being: Take care of your mental and physical health. Trading is demanding, and a clear mind and body can make better decisions. 21. Stay Adaptable: Markets change, and so should your strategies. Be willing to adapt and evolve with changing conditions. 22. Understand Leverage: If you use leverage, make sure you understand how it amplifies both profits and losses. Use it cautiously. 23. Keep an Eye on Economic Indicators: Economic indicators like GDP, employment reports, and inflation can provide insights into broader market trends. 24. Avoid Revenge Trading: Don't try to make up for losses by immediately entering more trades. Stick to your strategy and avoid impulsive actions. 25. Set Realistic Goals: Have clear, achievable trading goals. Knowing what you want to accomplish can help you stay focused and motivated. 26. Trade What You Know: Stick to assets and markets you understand. Trying to trade unfamiliar assets can lead to unnecessary risks. 27. Stay Informed About Regulations: Be aware of the regulatory environment in your trading jurisdiction. Compliance is crucial to avoid legal issues. 28. Avoid Weekend Gaps: Markets can experience significant gaps over the weekend. Consider closing positions on Fridays if you're concerned about weekend gaps. 29. Avoid Trading on Tips: Don't base your trades solely on tips or rumors. Conduct your research and analysis before making decisions. 30. Practice Patience: Trading success takes time. Don't expect instant riches. Be patient, persistent, and committed to your craft. 31. Maintain a Trading Routine: Establish a daily routine that includes market analysis, review of open positions, and research. Consistency can lead to better decision-making. 32. Keep a Clear Workspace: Organize your trading environment. A clutter-free workspace can help you stay focused and reduce distractions. 33. Avoid Overconfidence: Overconfidence can lead to risky behavior. Always approach trading with humility and a healthy dose of skepticism. 34. Scale Positions: Consider scaling into and out of trades gradually. This approach can help manage risk and optimize profit potential. 35. Use Trading Journals: Maintain a detailed trading journal to record your trades, including entry and exit points, reasons for the trade, and emotions. It's a valuable learning tool. 36. Risk-Reward Ratio: Ensure your potential reward justifies the risk. Aim for a favorable risk-reward ratio in your trades. 37. Stay Calm During Drawdowns: Drawdowns are a part of trading. Stay calm and avoid making impulsive decisions during losing streaks. 38. Learn from Mistakes: Don't dwell on losses; instead, learn from them. Each mistake is an opportunity for growth and improvement. 39. Stay Grounded: Avoid letting wins inflate your ego. Stay grounded and maintain discipline, regardless of your trading success. 40. Consider Seasonal Trends: Certain assets exhibit seasonal patterns. Research and consider these trends when making trading decisions. 41. Utilize Fundamental Analysis: Combine technical analysis with fundamental analysis for a comprehensive view of the markets. 42. Stay Informed About Global Events: International events can have a significant impact on markets. Stay informed about global news and geopolitical developments. 43. Stay Informed About Global Events: International events can have a significant impact on markets. Stay informed about global news and geopolitical developments. 44. Avoid Chasing Trends: Be cautious of entering trades late in a trend. Wait for pullbacks or retracements for better entry points. 45. Trade with a Clear Mind: Avoid trading when you're stressed, tired, or distracted. A clear and focused mind leads to better decisions. 46. Learn about Position Sizing: Determine the appropriate size for each trade based on your account size and risk tolerance. 47. Utilize Mobile Trading: Mobile trading apps can provide flexibility, allowing you to manage your trades on the go. 48. Stay Humble in Victory: While celebrating wins is natural, stay humble and recognize that markets can be unpredictable. 49. Consider Tax Implications: Be aware of the tax implications of your trading activities and plan accordingly. 50. Avoid Overnight Risk: Consider closing positions before major news events or overnight gaps to minimize risk. 51. Continuous Education: Commit to lifelong learning in trading. The more you know, the better-equipped you'll be to navigate the markets successfully. Remember that trading involves risk, and there are no guarantees of profit. These advices are meant to help you become a more informed and disciplined trader, but always approach the markets with caution and a well-thought-out plan. Happy trading! 📊💼
Education
by Vestinda
1
The secret tool that institutional investors use Recent news of potential attacks on wallet applications built on the Solana ecosystem, resulting in lost funds, has once again highlighted the long-running problems around the difficulties in securing hot wallets1. As a reminder, "hot wallets" involve storing private keys used to sign digital assets transactions, on a computer or phone connected to the internet. This provides users with a convenient way to send, store and receive digital assets. However, they can also be hacked… and the digital assets lost. The emergence of institutional demand for digital assets has brought with it all kinds of questions around access, security, liquidity, and transparency. Equity, bonds, or commodity futures contracts are all traded on similar exchanges or through the same market makers and brokers. Digital assets, by definition, live in their own, newly created corner of the world and, therefore, accessing them can be difficult. The institutional world is asking for an all-in-one bridge that would facilitate access to digital assets while also managing cybersecurity risk, custody risk, liquidity and all the relevant operational risks on their behalf. In the last two years, the institutional solution that strikes this fine balance has finally arrived in Europe under the name of physically-backed digital assets exchange-traded products ("ETPs"). Investing in digital assets – the access points There are many ways to invest in digital assets. Each one comes with its pros and cons, these include: direct holdings - personal wallets - account on centralised crypto exchanges - hot or cold wallet with custodians synthetic exposure - futures or swaps - futures backed ETPs - structured products physically-backed wrapped solutions - close-ended funds - physically-backed digital assets ETPs This is a long list, right? The choice can be a bit overwhelming. This is why we have recently released our latest WisdomTree Insights, ‘A New Asset Class: Investing in the Digital Asset Ecosystem’. In this report, we discuss, in detail, the pros and cons of these many different access points for an institutional investor. The results of the analysis show that: - Direct holdings are mostly kept in hot wallets, which are always connected to the internet and, therefore, open to cyber-attacks and hacking. Furthermore, they do not plug at all into existing trading or portfolio management systems. - Physical exposures through direct investment stored with a custodian in a cold wallet are very tedious to set up correctly and manage daily. - Synthetic exposures can be useful when leverage is needed, but they suffer from a large performance drag due to the negative roll yield of Digital Asset futures. This negative roll yield is very often higher than 10% a year, i.e. create a 10% per year drag on the performance. - Close-ended funds suffer from high fees and extremely large discounts and premiums to net asset value. The tracking error and difference of those products are therefore very poor. This leaves physically-backed ETPs, which appear to be the most robust and easiest to set up for a long-only institutional investor. They combine an easy operational setup and trading with security and efficient tracking. This is one reason why institutional flows in such products have significantly picked up as the product range has become more numerous and available via more venues. Selecting the right digital asset ETP for your needs Physically backed digital assets ETPs are new, though if you know how a gold exchange-traded commodity (ETC) works, then you understand the core concepts. When selecting between various ETPs, investors must consider the unique characteristics of each potential product. Investors could use the below holistic framework to approach their selection: 1. Security & custody The number one concern when it comes to digital assets is cybersecurity. Crypto hacks make the news regularly, and so it is often front of mind for investors. However, in almost every single case of digital assets being stolen, the asset was stored in a hot wallet. The gold standard is storage in a cold wallet (i.e. where the private keys are stored somewhere that is not connected to the internet), managed by recognised custodians for institutional investors. Having a safe custody solution and a robust process for approving any transfers is critical. Investors should pay attention to the custody provider, the storage solutions, their relationship with the crypto ETP issuer and the security practices for transferring coins in or out of the wallet. 2. Issuer & product structure Choosing an issuer with recognised expertise in creating and running physically-backed listed financial products and a track record in managing their trading and liquidity, particularly in a crisis, can deliver important peace of mind to investors. To mitigate the risk, it is also important to see if the issuer has a diversified business and range of products (not only digital assets) that can support periods where digital assets are down and out of favour. 3. Cost of holding For physically-backed digital asset ETPs, all the direct costs should sit in the total expense ratio (TER) of the ETP. There should not be any other hidden costs. The lower the TER, the fewer coins the issuer takes and the more coins per share are left for the investor. Trading costs are also part of the cost of holding. Secondary market bid/ask spreads are impacted by many factors: the liquidity of the ETP on the exchanges, the depth of the order book, volatility profile of the coins, inventory level, authorised participants' (APs) ability to source liquidity, and the number of market makers etc. For most efficient trading, it is always best to discuss with the Capital Markets team of the issuer to request an analysis when planning for large trades. 4. Lending & staking For equity ETFs, investors have become familiar with security lending. This feature can also apply to digital assets ETPs – but not all. Essentially how this works is that the coins that should be held as backing to the product are lent out to counterparties in exchange for additional yield. This additional yield could subsidise the issuer, enhance the product's performance, or both. This activity can, however, be very risky with additional credit/counterparty risk vis-à-vis "unknown" entities the coins are lent to – not to mention the additional process risk with lent coins moving out of cold storage and into hot wallets. In some cases, this lent amount can be collateralised. Certain physically-backed crypto ETP prospectus' allow for crypto lending, while others do not. Therefore, investors should check the details accordingly with the issuer. Staking, on the other hand, is very different to lending. It is a unique feature of certain Digital Asset networks and, therefore, of certain digital asset ETPs. Staking needs to be enabled on blockchain networks that use a Proof of Stake consensus mechanism2. Overall, staking is less risky than lending, even if the reward for staking can be as high or higher. However, the operational setup of the issuer to deal with staking is an important criterion when selecting an ETP tracking a Proof of Stake asset. 5. Primary and secondary trading ecosystem How the APs trade the underlying coins to facilitate the creation and redemption of the shares within a crypto ETP is critical for a due diligence process. When completing due diligence for the AP process, it's key for the issuer to be able to present the subscription/redemption process in detail and make sure the workflow is understandable to the investors. 6. Operational considerations for digital asset basket products Digital assets are the most at risk when they are on the move since they have to come out of cold storage and move to a hot wallet. In the case of ETPs that are tracking not just one digital asset but a basket of digital assets, rebalancings are necessary to ensure that weight remain in line with the investment objectives. A robust and detailed process around those basket rebalancings is therefore a must. Sources 1 www.washingtonpost.com 2 For a brief explainer on staking, see: www.wisdomtree.eu This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
C
by aneekaguptaWTE