As previously discussed, there are two main investment approaches — ‘profit-oriented’ and ‘loss conscious’. Alpha and Beta. You can take our simple test to determine just how risk averse you are. Since the Alpha Beta test launched I have spoken personally to a number of clients — with revealing results. Many strongly identify with one type, to the degree that they are genuinely surprised to learn that a second type even exists.
Others cannot easily identify exclusively with one type, desiring both types of the portfolio at the same time. And a third group – the Super-Alphas* want the dream! They want ten-fold, one hundred-fold and even one thousand-fold returns on their money. They are neither gamblers nor lottery players. They are simply sensitive to the probability of such outcomes. That’s why they’re with crypto.
Last year the chances of realizing 10K returns simply by investing in majors were overwhelmingly high, seriously outperforming stock markets.
(*Note: As expected, there are no Super-Betas in the Crypto environment.)
I have to admit that I am drawn to the crypto market because of this dream. But I love my Beta side too and always have my capital spread across all three portfolios – Beta, Alpha and Super-Alpha.
I want to quickly mention three ways in which Super-Alphas can achieve 10x.
#1 Trade with professional high-frequency systems.
If you are part of a closed circle of professional traders that have stable systematic strategies, returns are bounded only by the size of your account.
#2: Trade high-leverage markets with professional systems.
This one’s simple. Take forex with 1:100 leverage. One good signal and you’ll have 10% of the market move. One good signal isn’t 50-50 of course, but it can be high enough in certain situations when extreme market moves are expected due to fundamental economic changes.
#3: Invest in highly volatile markets with aggressive money management and professional systems.
Here comes Crypto, with the possibility of catching three moves and each time doubling your investment, while having acceptable losses during choppy market phases.
On a cautionary note, I reiterate my previous disclaimer: that slow market phases, slippage, order execution, exchange failures, and many other things in young Crypto markets can strip you of capital before you get a chance to profit. So, remember the golden rule: Only invest capital you can afford to lose.
I’ll end by challenging you to suggest more ways to capture the super-alpha holy grail. Remember I am not talking here about the lottery (extremely low chances of success), or casino games like Roulette where the chances of doubling 3 times in succession are (18/37)^3=11% — still far from 50-50.
Also, investing in ICO’s can be troublesome. From one side 1000x was achieved by Stratis in a couple of years. But how many like these are there, even if we consider retrospectively solid ICO’s only? This will be our team’s project this upcoming quarter.
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.
Past performance, real or hypothetical, is not indicative of future results.
There is a risk of loss in virtual currency trading.