Interview with Full-Time Trader Ansem Cryptocurrency Investment and Trading Strategies

Insights from a Full-Time Trader Ansem Shares Cryptocurrency Investment and Trading Strategies in Exclusive Interview

Ansem suggests setting specific time periods to not look at the market in order to maintain balance.

Original Author: Revelo Intel

Original Title: Crypto Market Wizards – Crypto Markets with Ansem

Original Source: Revelo Intel

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In the Crypto Market Wizards podcast episode held on December 13, 2023, Taiki and Ansem discussed topics such as the current market conditions, cryptocurrency bull market, L1, and utility tokens.

Host: Taiki Maeda – Founder of HFA Research

Speaker: Ansem – Full-time cryptocurrency trader

Original Title: Crypto Market Wizards – Crypto Markets with Ansem

Date of Broadcast: December 13, 2023

Ansem’s Thoughts on the Market

Ansem says he has been trading cryptocurrency since 2017. He first learned about cryptocurrency in 2016 while studying computer science at Georgia Tech.

He adds that after graduation, he started trading cryptocurrency while working as a software engineer. Since mid-2021, he has been trading cryptocurrency full-time.

Ansem says he expected a bearish market in the fourth quarter but was surprised by the strong rebound in October. Many altcoins have made significant gains.

He adds that BTC is oscillating around $40,000, and the oscillation may continue into the first quarter of 2024. The recent rebound is due to expectations of ETF approvals in January.

Upcoming Bull Market

Ansem says L1 transactions are expected to continue to evolve because L1s like Solana still lack certain functionalities on the Ethereum mainnet. Compared to Ethereum, Solana offers higher throughput and lower transaction fees, which is attractive to developers.

He adds that as more applications gain attention in DeFi and other areas, different L1 blockchains will compete based on performance and user adoption rates. Other L1s like Celo also show potential through technological innovation.

L1 and Utility Tokens

Ansem finds the application layer to be the most interesting part of this market cycle. He is excited to see what other applications can be built besides DeFi lending.

He mentioned that NFT is one of the important innovations of the previous market cycle. He is looking forward to exploring social applications, decentralized physical infrastructure applications, and AI in this cycle.

Ansem said that with the improvement of technological infrastructure, developers can now build various innovative applications.

In addition, he is excited about the possibilities of AI development within the crypto field.

Ansem said that projects like Helium and Hivemapper prove that crypto offers more than just speculative opportunities. Unlike protocols such as AMM or lending markets, Helium is not easily replicable.

He regrets not directly investing in $HNT and instead buying its miners. He believes that active crypto users should be the first to explore and promote new applications.

How to use Twitter for cryptocurrency investments

Ansem said that even before entering the crypto space, he was always active on Twitter. He added that in 2017, he learned trading skills from experienced traders on Twitter. Over time, he could use Twitter to gather information about different areas of crypto.

Ansem’s trading style

Ansem advises allocating 70% of the portfolio to major coins like BTC and investing the remaining 30% in more speculative altcoins.

He mentioned that there is a strong argument for altcoins in short-term trading based on fundamental events and candlestick analysis.

How to make investment decisions

Ansem said that he spends time researching a project and clearly identifies the reasons for holding the tokens of that project. He tends to hold projects for at least 6 months or longer. If there is a strong future expectation, he is not concerned about short-term declines or sideways movements.

He added that he has been keeping an eye on Solana since early 2021 and noticed network issues and lack of applications. He witnessed the growth of the Solana ecosystem and new teams building on it.

Ansem said that he engages in short-term trading involving GameFi, AI, Meme sectors, etc. He combines technical analysis (TA) and fundamental analysis (FA).

Ansem draws historical trends in innovation through comparisons, and history has shown that being the first to try something doesn’t necessarily guarantee ultimate success. For example, the comparisons between Yahoo and Google, Apple and Microsoft highlight how initial consensus can be proven wrong over time.

He added that considering long-term investments and technological progress is important when evaluating potential success.

Ansem said that the network downtime issues with the Solana blockchain could be detrimental to the speaker’s argument. If the downtime issues, which are attempted to be fixed in 2022, still persist, a reassessment of Solana may be necessary.

He added that market performance is another factor. If the market doesn’t reflect bullish expectations, it may require a reevaluation of investment decisions. For example, in the case of underperforming altcoins like $LTC and $XRP, if the prices continue to not rise, it may be necessary to reconsider the rationality of the investment trade.

How to Avoid an Echo Chamber of Information

Ansem explains that investors can create an echo chamber of information when prices skyrocket. $BTC went through this in its early days, and $ETH faces similar doubt from $BTC supporters.

(Editor’s note: An echo chamber typically refers to an information environment where individuals only encounter information and viewpoints that align with or reinforce their existing beliefs. In such an environment, people rarely encounter or consider information or viewpoints that differ from their own.)

Ansem adds that the cryptocurrency market is prone to cult-like followers forming around specific tokens, regardless of their actual value or potential.

Traits of Successful Traders

Ansem says that being able to accept mistakes and remain humble is crucial. Controlling emotions during market volatility is key to making wise decisions.

He also emphasizes that being able to accept mistakes allows for continuous learning and improvement. Good risk management and maximizing the risk/reward ratio are more important than being right in every trade.

Ansem states that continual practice, learning, and adaptation are necessary to become a successful trader. Refining investment strategies, analyzing market reactions, and keeping records of trades are all part of growth. Pricing is key in trading; fundamental factors like news events may influence decisions, but reliance on technical analysis indicators is primary.

Balancing Trading and Life

Ansem says that it is crucial for traders to handle losses properly and not let them affect future decisions. Many people avoid trading for a week due to emotional reasons after experiencing losses.

He responds to a viewer’s question about finding balance between trading and other priorities in life, such as family and mental health, by suggesting setting specific time periods to not look at the market in order to maintain balance. This could include weekends or certain time slots during the day. It’s important to have strict scheduling and not be fully absorbed in trading all the time. Maintaining relationships outside of trading is essential.

Most Common Trading Mistakes

Ansem says that overleveraging and going all in are common mistakes in investments, which can lead to significant losses if predictions are inaccurate. Diversifying investments and having a long-term portfolio is a more sustainable investment strategy.

He adds that using leverage in trading and heavily investing in altcoins without proper risk management can result in huge losses. Being too attached to certain assets and not considering market conditions may lead to holding positions even if the assets depreciate. Regardless of how much belief one has in the long-term potential of an asset, timing profit-taking is key.

Ansem suggests objectively evaluating each position in an investment portfolio. For example, if you were to sell all of a particular coin today, would you buy back 10% of it afterwards? If the answer is no, then consider reducing or shrinking that position. This approach helps maintain an objective stance towards the market and make wise decisions regarding portfolio allocation.

He added that in real life, most people consider cryptocurrencies to be scams. However, over the past decade, cryptocurrencies have proven their intrinsic value, and BTC is considered a digital gold. For people in underdeveloped countries lacking traditional banking infrastructure, stablecoins are another important aspect of cryptocurrencies, providing a way to send remittances without relying on centralized banks.

He further noted that DeFi is an innovative aspect of cryptocurrencies, offering significant potential for further financial development, so it should not be seen as a scam.

Ansem said that while decentralized exchanges like AMMs have been successful, there is still room for improvement in terms of speed and cost compared to centralized exchanges like Binance or Coinbase.

He believes that the DeFi space will see more innovation, potentially bringing it closer to the level of centralized exchanges. The future of DeFi may involve advancements in areas such as gaming and other applications, extending beyond the current infrastructure.

Trading Rules and Intuition

Ansem said an important trading rule is to allocate 70% of the investment portfolio to long-term investments and 30% for short-term trading. Keeping record of trading behavior and following set trading rules is advantageous for trading.

He added that not adhering to one’s own rules can lead to mistakes and poor decisions. Emphasizing the importance of reviewing past trades by recording trading behavior.

Ansem also added that understanding one’s trading emotions under different market conditions can aid in making better trading decisions. Intuition can play a role in trading decisions. Sometimes, an opportunity presents itself, and one may act on it without hesitation based on intuition. Intuition should not replace proper analysis, but if one has extensive investment experience, trading based on intuition can also be viable.

Cosmos Ecosystem

Ansem expressed optimism towards $ATOM. For people, understanding the diversity of the Cosmos ecosystem can be a challenge because each chain operates independently.

He added that unlike Ethereum, there is no single chain that serves as the investment focus for investors in the Cosmos ecosystem.

He emphasized considering the inflows of funds into different ecosystems when making trading decisions. He highlighted the importance of considering which projects within the ecosystem may attract investment.

Valuation Framework

Ansem acknowledges that valuing cryptocurrencies is challenging due to the industry still being in its early stages. Traditional metrics such as price-to-earnings (P/E) ratios may not apply to cryptocurrencies as they are primarily driven by the growth potential of blockchain and protocols.

He added that for him, comparative valuation is a more practical approach. He compares different cryptocurrencies based on factors such as market capitalization and market share.

• For example, if the market cap of $ETH is $250 billion and the market cap of $SOL is $10 billion, he might think that $SOL is undervalued compared to $ETH.

Ansem says he often engages in hedge trading, holding long positions in one asset while shorting another. This strategy allows him to capture relative value opportunities between different cryptocurrencies.

He says that due to speculative premiums and unpredictable market behavior, he finds it difficult to predict specific price targets for cryptocurrencies. However, he relies on technical analysis to identify real-time trends in prices.

Ansem says that technical analysis helps him understand how tops and bottoms are formed in prices, enabling him to make judgments about future price movements. He emphasizes that understanding the human psychology reflected in candlestick charts is crucial for successful trading decisions.

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