How to Make Money Trading Crypto

Introduction to Narrative Trading

• Trading involves three key elements:
  • What to buy: Assets like Bitcoin, altcoins, or narrative trading.
  • When to buy: Based on trading strategy using technical indicators (e.g., RSI, moving average, sentiment analysis).
  • How much to buy: Based on risk management and risk profile.

Objective of Narrative Trading

• As a narrative trader, aim to outperform the market (benchmark: Bitcoin/Ethereum).

Key Concepts

• Alpha: Excess return generated from your portfolio.
  • Calculation:
    • [ \text{Alpha} = \text{ROI} - (\text{Risk-free Rate} + \text{Beta}) ]
  • Example: If Bitcoin has a strong performance and you consistently underperform it, consider whether it's worth the effort to trade.

Performance Analysis

• Analyze various assets against Bitcoin to determine which outperform.
  • Examples:
    • Curve (CRV): Downtrend since December 2021, down 93-94% from the peak.
    • Cardano (ADA): Down 87% since August 2021.
    • Ethereum (ETH): Generally outperforms in bull markets, but historically underperforms Bitcoin.

Importance of Catalysts and Narratives

• Narratives: Frequently change and can indicate potential profitable trading opportunities (e.g., Layer 1, GameFi).
  • Historical Context:
    • In 2021, Layer 1 assets like Solana and Avalanche outperformed Bitcoin.
    • AI and gaming narratives have shown periods of strong performance.

Dashboard Overview

• Sections of the Dashboard:
  1. Overview of narratives and market state.
  2. Breakdown of individual narratives with asset details.
  3. Ecosystem comparisons among different blockchains.
• Key Chart:
  • Performance of narratives over time, highlighting strongest performers.
• Trend Analysis:
  • Monitor charts regularly to observe patterns and potential entries/exits.

Recommendations for Trading

• Focus on 2-4 narratives at a time for diversification.
• Allocate 2-4 tokens per narrative.
  • Weighting can be based on your risk profile and conviction regarding each token.
• Example:
  • Meme Narrative Options: Established projects (e.g., Shiba Inu) vs. newer but volatile projects (e.g., Troll).
  • AI Narrative Research: Assess market cap, project goals, and competitive edge.

Conclusion

• Continuous learning and monitoring of narratives is crucial for successful trading.
• Engage with the community through platforms like Twitter and newsletters for the latest trends and insights.

Additional Resources

• Follow on Twitter for updates.
• Access Dune dashboards and tutorials for deeper insights.
• Subscribe to newsletters for trending crypto analysis.