54 Altcoin Sherpa
Jan 2, 2023
AltcoinSherpa is typically a swing trader who primarily trades altcoins and heavily relies on crypto fundamentals when trading. You can find him at: https://twitter.com/AltcoinSherpa and youtube.com/c/Altcoinsherpa. He enjoys trading, investing in new crypto projects, and also works with @nexa_network .
What attracted you to trading?
I first got into trading after buying bitcoin in 2016. I started to learn more about the space and all of the new projects listed on crypto exchanges and naturally started to learn more about trading through centralized exchanges. After getting absolutely demolished in 2018 and seeing my profits disappear, I made it a goal to protect myself against future market downturns and to educate myself on technical analysis and investing.
How did you start that journey? What resources did you go to first?
I started this journey by reading many Twitter accounts and trying to reverse engineer their charts and understanding their thought process. After learning about multiple indicators and trying several of them and seeing which ones worked/did not work for me, I found that I liked price action, volume, volume profile, EMAs, and the fib indicators/tools mostly.
I watched hundreds of hours and read dozens of books on trading. But most of what I learned was from Twitter and screen time with the charts.
How long did it take you to become profitable? Were there any major milestones where things just started to click?
It took me two years to become consistently profitable. I initially made a lot of money in the 2017 bull run through ICOs and simply being in crypto, but I would not call what I did back then ‘trading’. After losing lots of money in 2018 and most of 2019, things started to make more sense to me. I was throwing all extra income into the market and continually losing that money while also consuming as much material as I could. Around late 2019 is when it really started to click for me - I traded overall market cycles. ETH/BTC was a great indicator for altcoins, and there were certain times of the year when alt/btc did pretty well. I also learned my first real actionable setup, the fib retrace, which is something I still use today.
I was throwing all extra income into the market and continually losing that money
Would you say that this HTF cycle trading was a ‘step back’ from the impatient retail 100xer? How did you stay disciplined?
I would say that this HTF cycle trading required a lot more patience, yeah. But as you progress and get better at understanding market environments, you become much more fluid with regards to your setups, plans, etc. In 2018, I understood long only and hold positions for weeks or more. In 2022 I was able to do a lot more shorting, a lot shorter trades, and be more fluid.
I think you need a mix of big wins and consistent wins. Most traders I know will make the bulk of their annual profits during a specific time or a few big trades (and have small wins otherwise). 100xers are, of course, possible (we saw many in 2021), but you need to have the discipline, market knowledge, patience, and ability to realize some of those gains. Most beginning traders will mostly look for 100xers but not have the patience to hold their position (and flip from coin to coin, seeking the quick return). Consistency is what wins in this current market, and taking your 5-10% wins is what you should aim to do. When the bull market eventually returns, the 20,50,100, and 1000% return.
Did you ever consider quitting when you lost money in 18/19?
Not really, mostly because I was making money from other endeavours and treated trading more as a hobby. Like any other side hustle, I think you should learn to trade on the side while you still have a traditional steady income and then transition over (if you so choose) if you enjoy it enough. Personally, I liked crypto trading enough to dedicate a lot of time and effort to it and continued in 2018/2019 even though I lost money.
What does a typical day look like for you?
Wake up around 7-8 a.m. Check the charts and any active positions. Then go onto Telegram and talk with friends or partners. I work for a few hours and then try to take an hour off the computer around 12-1 p.m., either reading or just relaxing. I work until about 4 p.m. and spend the latter part of my afternoon doing crypto fundamental research, talking to any potential projects to work with on the venture side, or some Spanish lessons. I work out around 4-5 p.m.; either by rock climbing or going for a run and then come home, eat dinner, and do another hour or two of work or Spanish. I usually try to start relaxing around 9-10 p.m. and try to watch an hour of TV (or read) to relax my brain and then go to bed around 11-12 midnight. It’s this way 5+ days out of the week.
Who did you look up to when you first started trading?
Hsaka, Lomah, Trader Mayne, CryptoCred, CryptoDog, and dozens of others. I think that Crypto Twitter is an amazing school to learn anything you want; you just have to put in the time and effort for it.
Crypto Twitter is an amazing school to learn anything you want; you just have to put in the time and effort for it.
Tell us about your most memorable trade
I’ve had several solid trades, but one that I like best was in late 2021. I bought DUSK at .15-.20 and sold at $.75-$1. It really was a well-structured setup for me.
The latter half of 2021 was trading all around narratives - crypto liquidity was very fragmented, and altcoins were a game of hot potato. A sector would pump very hard and then that money would leave and go to another sector. You saw it with gaming (AXS), the layer 1s (Solana, Avalanche, Luna), metaverse (SAND, MANA), and bridges (CELR, SYN). It was a guessing game as to what the next narrative would be and ZK rollup coins were the next up (which I correctly guessed). While this trade took a little bit of time to develop and there was some opportunity cost with the money sitting there, it was an extremely profitable trade for me.
What’s the best trading advice you’ve been given?
Too many to count over the years, lots of great individual trading tips over the years. One, in particular, was from Hsaka: In moments of extreme volatility to the downside, identifying the coin that held up the best and also the coin that also got destroyed the most can yield really good results.
What drives you to keep trading?
I enjoy it. It’s mentally stimulating, it’s something you can always improve at, the market itself is very inefficient, and you’re competing against yourself.
What does ‘making it’ look like to you?
I’m not really using money as the ultimate factor when saying I have ‘made it’. I want to keep trading and being a market participant as long as it is fun and challenging to me. I had a successful 2021, but I want to continue to grow as a trader.
I want to keep trading and being a market participant as long as it is fun and challenging to me.
What's the most important quality in a trader and why?
Patience. Being able to wait for setups, price targets, not FOMOing into entries; these are all important when taking a trade. Emotional control is just as important; you have to be able to take losses and also not become euphoric over wins.
you have to be able to take losses and also not become euphoric over wins.
How would you describe the way you trade?
I’ve mostly been a swing trader my entire career. It works best in a bull market and less so in a bear market. Typical time horizon for a trade is around 2-7 days in the current market conditions, but it’s always best to be flexible.
I trade off price action and a few indicators such as EMAs, volume, and Volume profile. Over the years, I’ve realized how much everything fits together and how each person has their own system/way they like to trade. It’s why I’m dubious when I look and see some trading programs that explain one specific way to do technical analysis. Different methods work for different people. Order flow traders are going to trade differently than technical analysis traders, and that’s okay. It just depends on how you like to interpret the available data and make sense of the overall picture.
I always like to trade in congruence with fundamental analysis. Crypto in its current state is very narrative-driven, with liquidity going from one sector to the next. I expect this to continue until the next big bull run, where everything simultaneously moons together.
How much do you pay attention to narrative vs pure chartist?
I’m of the strong opinion that news moves charts and not *everything* is baked into the chart. Pure TA traders will tell you otherwise but I personally don’t believe it; I think that fundamentals, narratives, token emissions, etc really play a large factor in crypto. Ideally you use both TA and FA to trade- TA for entries and exits and narrative/FA for understanding which coins are moving and why.
Has the way you trade changed over time?
Of course. You should always be learning and getting better and adapting to different market conditions. I might hold something for two months in the bull market, and I might hold something for an hour in the bear market. It just depends.
As you gain more experience, you can be more discretionary. You have greater control over your emotions and much more experience in the market. When I first started trading, I was discretionary (and had zero rules for myself). Realizing that I was losing lots of money, I set hard rules for myself after this and have slowly gone back in the other direction, being more discretionary and willing to hold onto positions longer than I originally planned (or cut them much quicker, depending on market conditions).
You should always be learning and getting better and adapting to different market conditions
Why do you think you have success trading?
I think I have success because I understand crypto fundamentals at a higher level than most crypto participants. I understand narratives, and most of the sectors, and I have played around with a lot of applications. Being in crypto since 2016 and learning on Twitter every day has been the best education that anybody could ask for.
I also have experience in other risk markets such as poker. I worked in the poker industry for a long time, and I think there are a lot of similarities between poker and trading: working with incomplete information, thinking in terms of probability, risk management, and managing your emotions are all elements of being a successful poker player.
What’s your general attitude towards risk?
I’m traditionally a bit riskier than other people, I’m fine to eat larger losses than others. I have run large amounts of money up and lost large amounts of money as well. I would say that I have a larger risk tolerance than others because I was in the online poker industry for many years and understood variance/probability better than most people. I’m confident in taking riskier positions/trades because I feel much more confident than I did back in 2018.
What's the worst thing about trading and why?
It seriously fucks up your dopamine levels, and it also can change your overall lifestyle a lot. Crypto markets are 24/7, and it’s the greatest casino on earth. It can negatively impact your life very badly if you aren’t careful. How you feel after you lose a big trade can seep into your normal life, and the emotions that follow can be harmful. I don’t recommend trading to many people; it’s an extremely hard thing to do, and it’s not great from a lifestyle perspective. You have to do it because you enjoy it, not purely for the money. Assets like NFTs are probably the easier/better way to make money (at least recently).
I don’t recommend trading to many people; it’s an extremely hard thing to do, and it’s not great from a lifestyle perspective.
What's something you've learned in the last six months that has made you a better trader?
I think that even participants who have been in crypto for a while have been reminded of some lessons that they thought they knew. I personally never thought that the market would get crushed as badly as it has in 2022, but here we are. Ironically enough, I am relearning a lot of things that I thought I was an expert at. “Next time I’ll do better!” is something we always tell ourselves, only to make the same mistakes that we always did before. Human nature is like that, unfortunately.
A few things I’ve reminded myself of:
Always take profit
Price always goes lower than you think it will
Longer swing trades are for bull markets; scalps are for bear markets.
You don’t have to make it in a year or two years or five years. You have a long time to make money if you want.
Build skills that are applicable in all environments
I still sometimes find it hard to take profit, even when I know I should. I went from taking 3% scalps in 2019 and being happy, to taking 50% moves in big positions in 2021. I was too slow to adjust in 2022.
What's the mistake you find hardest to avoid when trading?
Currently, it’s being too greedy with my take profits in this current environment. I can’t count how many times I have round-tripped my profits, where I’m up 10%, and then I see price come back to my entry. Although I’m better with it now, I still made too many mistakes in 2022.
The way to avoid this is to simply adjust to market conditions better and be greedy with regards to taking profit. It’s a simple fix, but one I still had issues making.
In this current environment, I can’t count how many times I have round-tripped my profits
If you could give someone starting trading tomorrow one piece of advice what would it be and why?
Probably to just trade spot, and to trade with price action. I wouldn’t personally touch leverage at the very early stages; it’s unlikely you have a good enough idea/edge to trade. Learning with price action and a naked chart also allows you to get screen time under your belt and read charts accordingly. If you’re big brained, you probably would have a much higher edge not doing technical analysis and learning more algo/quant trading.
Don’t be ‘results oriented’ and don’t dwell on the past. Learn from your mistakes but don’t think about all of your ‘what if’ situations with the past trades you have made. It’s impossible to turn back time, and yeah, it sucks that you sold Solana at $1.50, but it is what it is.
Understand that the road to riches is being a lone survivor on top of millions of bodies. There are millions of people who have tried to trade successfully in the past and failed. To be a successful trader means that you are defying all odds and excelling at a job that is, quite frankly, very difficult.
Understand that the road to riches is being a lone survivor on top of millions of bodies.
What goals do you set for your trading?
To make more money than I started with. It’s simple and is the goal in every trade I take, but I never set a target number for $ profit or anything like that. I just want to keep improving and getting better as much as I can.
Fill in the blanks
Most traders would be better off dollar cost averaging and not trading at all.
What separates the pros from the rest is experience, capital, emotional control, and better tools.
A good trader should never stay stagnant, he should always be learning more about the market.
The biggest misconception about trading is I don’t have an answer for this one.