Binaryx starts a series of podcasts with professional cryptocurrency traders. Here we talk about skills, strategies, ideas and more. Meet Tiago Pratas and our first podcast — “The most common trader’s mistakes.” Alex: Hi, Thiago. My name is Alex. I work at Binaryx. Binaryx is a new exchange and trading platform that allow traders to trade and buy cryptocurrency fast and safe. How many years are you in training or cryptocurrency? Tiago: So, I started trading cryptocurrencies in 2016 when I bought my first Bitcoins. A year or two later, I began to trade actively, so I’ve been trading actively for like the last 2-3 years. That’s been my journey. I tried to create several start-ups in the trading-related area. Still, I’m in the cryptocurrency trading for three years. Alex: OK. Thank you, Tiago. Since you are an experienced trader, maybe you have a few tips and advice for newbie traders or traders who only started to trade. Further, what mistakes do newcomers make and how to avoid them? Tiago: Usually, when people come to crypto, they probably think they’ll get rich quick, just like a Wolf of Wall Street. Though it won’t happen, you need to be willing to lose money because there are not 100% guaranteed strategies. That’s also another problem when you start trading. You probably don’t have a strategy defined, and that’s normal because you’re starting at that moment. You don’t know anything about indicators or how to use the exchange. So, you’re just guessing with all this information available. The best tip advice I can get is trying to follow strategy. Make an Excel sheet with all your trades. If the trade fails, you just log in and try to explain to yourself why it failed, why your stop loss was activated. That way, you can eliminate the emotion because trading with emotion is a prevalent issue. I believe that the best advice I can give is to try to build, follow, and improve your winning strategy. You also need to do the risk management, as well as the backtesting. Alex: The trading plan as you say it’s a must-have thing for a newcomer trader, right? Tiago: That’s what I said. You won’t have a trading strategy, but I believe you should try to do it. When you have a strong strategy, it’s so much easier. You can just control your emotions because you’re just following your plan; you have confidence and backtest. You know it’s worth following in the long term because trading is not a sprint; it’s a marathon. So, if you have confidence in the trading strategy, you know that you’ll get that money back in the long term, even if you were like 3 trades in a row. Independent thinking is critical in trading, so it’s OK to disagree with me and other people’s opinions. As long as you’re making money, you are right. Alex: What obstacles or challenges can be made by newcomers traders and by the experience of traders? Tiago: New traders have an amount of information to guess. There are many exchanges, assets, indicators. So, they need to try to understand all of the available information about the trading process. Probably, that’s the biggest issue for newcomers. Moreover, they don’t even understand the Bitcoin technology or know how to use the exchange. The biggest problem for a prominent trader is to find a trusted exchange to use with liquidity. If you’re a big trader with a lot of money, some trades sometimes might not fill because of the market liquidity. At least from my perspective, the issue is not losing your funds by having a secure exchange platform and a market with liquidity. Alex: In your opinion, do you think that newcomers should look for a mentor or study and learn all the cryptocurrency things by themselves? Tiago: Of course, this is my personal experience, but I learned by myself. I’ll do, I have a Bachelor’s Degree in Finance. They don’t teach you how to trade cryptocurrency at the university. So, everything I know about trading, I learned by myself. I learned by studying and making mistakes, as well as trying to understand and improve them. I also understand that most people couldn’t be this way because that’s a very particular characteristic of mine. If I don’t know something, I just go and learn about it by myself. But, I also know that there are people who don’t have that characteristic and need to have a tutor or mentor. So, if you think it suits you and believes that you’re getting the right amount of information and knowledge, you can pay for it. Why not? Alex: OK, thank you. When were you starting your trader’s career, which habits and qualities you wanted to train an adopt first? Tiago: I was trying to follow my strategy because I also think that I was like The Wolf of Wall Street, and when you make 200 trades in a row, you’re going to be rich. And then you start to get arrogant and cocky about your trades and think you’re like the master of the Bitcoins and market. That’s just not true. So, you need to control your emotions and be humble about the markets because the market will crush you if you just start to be cocky. That was my biggest mistake when I began trading, trying only to trade randomly without any pattern or strategy. That’s what I advise trying to get a strategy that you think suits you; it’s your investment and trader profile and trying to follow that as much as possible. Alex: OK, thank you. How do you think what is the main distinguishes between a professional trader and a newcomer one? Tiago: First of all, it is the amount of money they are trading with. Newcomers have less money to invest, of course. But I think everyone should start that way. The most crucial issue is the control of emotions. That should be awkward or weird saying this to non-traders, but I feel the same when I’m winning or losing. It’s the same thing for me. I just don’t feel anything at all because I know that I believe in my strategy in the long term and add it to my portfolio. I just have control of my emotions, even if I’m losing or winning. Probably newcomers don’t have that, and they excited when they make a winning trade. So, that’s my piece of advice for them. Alex: So, the panic is the last thing the trader wants to face. OK. What about the trading strategies that are not working right now? There were few working strategies, and they were working, but right now, they’re not so useful? Tiago: That’s a prevalent issue when you’re building a strategy because, over the time you’re still started, you will lose Alpha. Alpha is the edge you have over the market. When you are trading, you are always trying to get the most significant Alpha with our strategy and, of course, strategy use alpha over time. So the strategy that is working today will not work in 6 months. So, it’s vital to have independent thinking and always trying to improve yourself. You need to understand you could be wrong, be humble with the markets, and just try to develop your strategy over time. Don’t say like “This strategy works, and I will use it forever.” You always need to try to improve your strategy and improve yourself as a trader. Alex: So, always learn, always grow, and there will be a result. And always check yourself. Tiago: Yes, I totally agree. Yes. Alex: OK, thank you. What can you say about the robotic algorithm like an automated algorithm for trading? What’s better, to trade by yourself or to use the computer modes used? Tiago: I believe the technology is used to enhance the human powers. So, I totally agree specific strategies are entirely automated and could be done by robots instead of you losing time sitting in front of the computer. You could just automate your strategy. But, some strategies are just unautomatable. I believe you should vote on three strategies, where one is automative, and two are not. You can have the best of both worlds. Alex: OK, thank you. What kind of what should beginners work with or any special wallet or cryptocurrency that can be more useful or easier to start with? Tiago: So, I can talk about my personal experience. I use the Exodus wallet because it’s the multi-wallet where you can have several cryptocurrencies there. It’s very safe and easy to use. I believe you should use the wallet that fits you. It’s very personal because since I’m in the community for a long time and I’m aware of the scams. You should do your research and try to follow and find the wallet that fits you most. Never keep in exchange, always keep in your wallet on your PC on your mobile phone. Always try to be one of your cryptocurrencies. Alex: OK, understood. You told me about the scammers. How do you think of not falling for the scam when you’re choosing a mentor or expert? Tiago: Usually, you have YouTube. That’s very flashy with a millionaire mentality, screaming titles, cash notes. There could probably be a scam. You know that people are following for that dream of being rich quick without effort. But that’s just not true; you should just try to improve by yourself. So probably, if services are offering you a fixed income for your cryptocurrencies, that’s fake. You can’t have a fixed income on the variable market. The price of Bitcoin is going up and down. So, there can’t be a fixed income to that, and there could be scams. If they’re screaming like handling with Lamborghini and loads of cash notes, just don’t do that. The biggest traders I know, are very reserved. They don’t even have social media and don’t take pictures of their wealth. They just keep it for themselves. Some people are trying to show their lifestyle, and it isn’t true. So, be aware of them Alex: OK. So, since trading is not an easy job. It’s difficult trading tasks and daily growth and learning. Maybe it would be very sad to lose money or your wallet. For this purpose, how to secure your wallet and not to lose money? Tiago: That’s a critical issue in the Bitcoin community. First, Bitcoin is the revolution to be around the bank. So you should always try to keep your coins on your wallet and an exchange. Of course, if you’re a trader, you are holding parts of your funds on an exchange, but you should always try to have a cold storage wallet. There are a lot of companies that can help you with cold storage like Ledger. There are a lot of products you can try it out. I just use a wallet on my old cell phone, and I use it as my cold storage. Alex: OK. When I started trading, and I did the first steps and won a few bits, I already lost a few bits. What factors can tell me that I’m doing something wrong in trading? Tiago: My strategy to improve my strategies is to have an Excel sheet where I keep track of all my trades. And when the trade fails, I always try to explain why that trade fails. It could be like I didn’t follow my strategy. That was my biggest issue, as I said before. I believe you must know yourself. A process I did to know myself is when I lost a trade, I always try to put it down why that trade was old. Was the stop loss activated too early? Was the tech profits activated too early or too late, and the trade not planned? And then you keep track of everything, and you get the reason why your trades are failing, and that’s very good to eliminate them. For instance, my biggest mistake was not following my strategy. It was very easy to remove them, just follow the strategy. So for me, that’s the process to improve myself as a trader. Alex: OK, thank you so much. In your opinion, what currencies are coins or tokens are the most unstable right now? Tiago: I usually trade Bitcoin, and I’m very focused on it. Of course, I have some altcoins for the long-term, but I don’t trade them actively. Of course, altcoins are much volatile then Bitcoins and other leading coins. Due to many different factors, like a lack of liquidity for some altcoins, the Bitcoin is the true king. It has more liquidity and also has less volatility from my perspective. Probably, Bitcoin is least volatile in the crypto space, but I’m very focused on it, and I don’t know very much about the other altcoins. So I could be wrong about this. Alex: And for the final question. Maybe you can give her our listeners a few tips about trading. Perhaps you know some resources or websites to read or follow to learn more about trading in cryptocurrency? Tiago: Probably, I believe everyone should start with TradingView. It’s a free platform and social media where traders can share their opinions, strategies, and ideas. You can start doing that. I would also recommend the following some YouTubers that do daily analysis. That’s why you can follow and understand what they are thinking, why they’re making such trades, which indicators they used, and why they do that. You can start that way on the following. There’s a lot of free content so that you can follow a lot of influencers out there. You can try to learn what they are doing and try to copycat them at least. In the beginning, that’s the path you can follow fine YouTubers that you respect and try to learn from them. Usually, I’m not a big fan of buying courses because I believe that most of the information you need is out there for free. You shouldn’t do that kind of investment. But, there are many respectable traders that you can follow, and they’ll teach you for free. So, I believe that’s the biggest tip to give: trying to get some YouTubers, seeing what they’re doing, seeing what is using, and trying to learn from that Alex: Thank you so much, Tiago. There were really important answers and really helpful information for me and also for our readers and listeners. Thank you very much, and have a nice day! Tiago: Thank you very much. Good luck!