Examples of trade situations

When someone knows something

Have you ever received insider information in your life?

So what would you write or call, and said that there is information “100%” working.

And all you need is to find the money.

Maybe it was, maybe not. It does not matter. Now it is important to imagine that they still called you and said something like that.

What are you going to do?

It is clear that look for ways to use information.

What are our options for development?

Option One:

You silently take your money, transfer it to the exchange account. Buy an asset and wait.

Option two:

You decide to additionally earn extra money by telling the same information to someone who has money and who is willing to take the risk. Or just decide to share information with your friends.

The question with an asterisk: which of these options is most common?

  • But how do we make money from it? After all, we do not receive such calls?
  • Do not be sad. It is better to ask yourself, and do all owners of the “cherished” information act in a coordinated manner?
  • Nope. And what is it for?

Besides, the speed of the word of mouth is incredibly high, though not higher than the rate of growth of the level of greed of the same participants, and probably higher than the speed of arbitration algorithms, but the essence is as follows:

Because of human not perfect, more precisely because of their bias and greed, a person begins to create an imbalance in the market by his actions. Imbalance is ineffective. Inefficiency is the basis of our income.

As you know, a trader is a detective who is looking for clues, for those “tracks” that are left by “criminals”.

In our case, the “criminal” is the participant creating inefficiency.

A “trace” is his deal.

Now let’s go with examples

A certain cryptocurrency XLM has some interest among the participants. These participants trade on all stock exchanges against different base currencies, for their own reasons. Someone is against Bitcoin, because it is Bitcoin, someone is against Etherium, someone only believes in the dollar, but he is attracted by the possibility of strong cryptо growth, this is not important.

XLMBTC (Binance)

 

Does this pair look suspicious (XLMBTC)?

And you probably noticed a significant accumulation of volume almost at the beginning of the chart, but I see nothing besides suspicious.

XLMPAX (Binance)

 

What is unusual here (XLMPAX)?

I think none of you will deny that we are seeing an unusual increase in trading volume. Now the question is, what is the reason for this increase in volume, three times?

Perhaps this is a trade competition from Binance? Not. I checked the site and twitter Binance.

Perhaps this arbitrage robots intensified? Yes. But what prompted them to this?

Perhaps they pushed this news about zero commissions?

https://support.binance.com/hc/en-us/articles/360020889392-Binance-PAX-Jointly-Offer-a-Zero-Maker-Fee-Promotion-

 

I would agree, but then the turnover should not have decreased from 20/12/2018, but it fell from 26/12/2018 and in fact grew only 12/01/2019.

So we are dealing with an asset that is potentially interesting to someone.

With a little risk, it makes sense to buy such an asset.

By the way, I want to note that I am not doing any quantitative measurements. I do not calculate the correlation and do not determine the degree of dependencies. It’s not logarithms. This is just my reasoning. Maximum objective. No drafts and predictions.

Результат:

XLMPAX (Binance)

 

It was not long to wait. The risk / reward ratio is 1 to 4. It was possible to pick up 1 to 3.

Total:

Our life consists of the search for something. Something we are looking for longer, something we find faster. Such situations occur in the market relatively often. Just need not be lazy to look for them.

Personally, I am at a computer all day. But this does not mean that I have been searching for situations all day long.

I delegated this function to my assistant.

This assistant does not make decisions about purchases, he simply finds for me the potential opportunities that I filter out.

January 12, 2019, my assistant found on the market

  • 2790 potential signals. Alts I trade only in long. Remains
  • 1331 signals in long. Of these, I’m only interested in above-average volume.
  • 288signals in long with a signal volume above average.

His name is FTT. He helps me a lot. And he told me about XLMPAX 7 times.

XLMPAX