Trading With Price and Volume

On any given major stock exchange, from Wall Street to Bombay or from London to Hong Kong, billions of shares are traded each day that represent trillions of dollars exchanged back and forth. This buying and selling action represents volume, which is the result of the exchange of stock or commodity between both buyer and seller. Volume, then, is the prime mover in the price for a given stock or commodity in a given amount of time.

If there is more buying than selling for a ABC stock then what results is the rise in price for that stock. Likewise, if there is more selling then buying in ABC stock then share price is likely to fall in value. This makes the study of volume a valuable indicator to determine if a stock is either in demand or likely to increase in share value in the future.

Many aspiring stock traders practice a style of stock trading popularly referred to as “momentum investing” where one attempts to identify stocks that are fluctuating in a given price range for a length of time and are likely to have explosive moves to the upside or downside out of those ranges. The confirmation for those explosive moves are taking long positions at the upper end of that price range or short positions at the lower end of that price range on greater than average volume.

Let me offer an example of the importance in volume by stating that volume is literally the fuel for stock values. Like the space shuttle when it is launched into space the majority of fuel is spent to just get it into orbit. This explosive force of energy to propel the space shuttle into space or new heights requires an above average reserve of the fuel but then the space shuttle can then use only a small portion of the remaining fuel reserve to carry out the rest of its mission. Volume is to stocks what rocket fuel is to the space shuttle.

A good average is a 150% of its normal volume but I would also stress that it’s important to become familiar with a given stock’s volume pattern to gain true mastery. Baker Hughes, Inc. (BHI) typically will move in force with just a 20-25% higher volume spike while some of the lesser known small-cap stocks might require 150% or more.

The study of price and volume relationships also reveals a condition known as “climatic volume” which to a skilled trader can reveal a complete reversal in a given trend. After a stock has had strong advance or decline is where climatic volume can result (the operative phrase is after a strong advance or decline).

After an explosive move, usually the result of a volume spike, climatic volume results when traders come into the last stages of that advance of decline and price moves sharply at the last move of its trend. At this point, all the buying and/or selling has resulted and the move has exhausted itself and volume is then considered climatic when it exceeds two times the average daily volume over the last ten days. At these extreme volume levels price often goes almost parabolic or straight up in price without a noticeable pull back.

Master traders can spot these “Bump and Run The Top” or “Rising or Declining Wedge” patterns and use these climatic volume spikes to exit their positions and then use them to spot the trend reversal and get in at the beginning of a new trend transition.

The study of the relationship between price and volume can give both technical and systemic traders the confirmation that they need to get in on explosive moves and also serve as indicators as to when its time to get out and, possibly, even spot a new trend in transition to exploit profitably. Volume should be considered as the most important precursor to price movement at the disposal of investors or traders and can possibly lead to some huge gains to those who take the time to understand the relationship between price and volume.

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20 Lessons from 2 Years in Crypto


On October 22, 2017, I quit my full-time job in finance to trade crypto. Here are some of the major lessons I’ve learned:

  1. For most traders, the biggest challenge is their pride, or the need to appear correct.
  2. When you manage risk correctly, you could lose 50 percent of your trades and still be profitable
  3. Price action and volume are the best indicators for charting. You can use others but it probably won’t make you a better trader.
  4. Trends can go far beyond what seems to be logical.
  5. Avoid pump and dump groups.
  6. You’re going to make every error while trading. When you make mistakes, don’t punish yourself, just improve and strive to not repeat those mistakes.
  7. Do not treat crypto exchanges the same way as cash in bank accounts. Unless you control the private keys, you don’t own the coins.
  8. In the 24/7 crypto market, you won’t be around to catch every trade. Don’t worry, there will always be another trade.
  9. Don’t try to find tops in a market. Wait for the trend to tell you when it is changing.
  10. You can make money in altcoins selling hype and speculation, just don’t make them long-term investments.
  11. Stay away from low-volume coins. They’re easy to manipulate and you can get trapped in a position — unless you are familiar with the market.
  12. Only trade money you can afford to lose. An unfortunate reality if you don’t manage your risk properly.
  13. As a trading sniper, know when to strike and when to wait for the target to get into position.
  14. Crypto exchange order matching systems go down when there are major price movements. If the price is moving into a target Sell or Buy zone, place orders before the move via limit orders.
  15. Manage your risk profile per trade in a way that presents you with no remorse regardless of what the market does.
  16. Learn how to think the opposite way of the crowd. If you’re someone who wants others around you to affirm your view, then trading is not for you.
  17. Trading is not about choosing precise tops and bottoms in a market — it’s about catching a market trend.
  18. Don’t turn a small short-term losing trade into a long-term large-scale losing investment.
  19. Don’t set goals for everyday gain — set long-term goals for success.
  20. Learn to survive in trading, then excel.

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Cool Wallet S REVIEW [2019] — Wireless Hardware/Software Wallet In One!

In this review, I am going to dive deep into the Cool Wallet S, which is a credit-card shaped cryptocurrency hardware wallet. Is it secure? How does it work? How many coins are supported? Stay tuned because we are going to address all of these questions and more!

When I first picked up my Cool Wallet S, it was a very professional package and one of the only bluetooth hardware wallets on the market. Until recently, there haven’t been any other wireless hardware wallets that are on the market. I was enthralled because I always wanted a secure way to use a hardware wallet with my mobile device that didn’t require me to be tethered to my laptop or other USB device in order to sign transactions.

This wallet takes all the ease of use of a software wallet on your phone and merges it directly with the security of a hardware cold storage wallet, hence the name “Cool Wallet” (Hot Wallet + Cold Wallet = Cool Wallet). When I first opened it up, it was pretty straight forward, and actually resembles a basic plastic credit card, except the texture is a bit different and has an e-ink screen to verify transactions. I will go into detail below for the user experience and design of the product and what my thoughts were when comparing it to other hardware wallets I’ve reviewed.

Cool Wallet S Device – Recovery Seed Card – Cool Wallet Sticker – Charging Pad With USB Cable

The above are the contents of the sleek, black, minimalist box, however this is only half of the equation. The device itself interfaces with the CoolBitX app which you can get from the iOS app store or Google Play store to setup the device. The app is where you will go through setup, initialization, and ultimately processing transactions, with the hardware wallet by it’s side.

When you pull the device out of the box, it will have at least a partial charge so you can set it up right away. Powering up the device is easy and straight forward, so all you will need to do is make sure you’ve downloaded the app and activate it before you can walk through the setup process. First, after the app is setup and you allow notifications and such, it will ask you to securely pair your device to the bluetooth connection to your phone and will ask you to allow the connection.

Secondly, once the app confirms the device is connected, it will ask you if you want to recover a wallet or create a new one. You will most likely create a new one if this is your first experience with the device.

Thirdly, it will prompt you to set your recovery seed length in either 12, 18, or 24 seed words, and once you select, it will show up on the screen with the words in the correct order. It will ask you to write these words down on your recovery seed card sheet (recommended) or get a metal recovery seed backup, like CryptoTag or Bill Fodl.

NOTE: The app will ask you if you want to save your recovery seed phrase as an image file. DO NOT DO THIS. My one issue with the process is asking if you want to save your recovery seed card as an image, which defeats the entire process. I strongly recommend writing it down on paper, or better yet, use one links above to get a metal recovery seed backup. I will leave a link to a review HERE if you’re unsure why it’s important.

That’s it! Once you do this process and verify the recovery words (it will ask you to verify them, so make sure they are at least temporarily written down) and will allow you to create your wallet. You are now able to begin using the wallet and send and receive crypto!

This is a fairly simple and straightforward interface for sending your crypto of choice. There is a tab at the top that allows you to “Send” or “ Changelly “ (More on this later, it allows you to swap different coins within the app). For example, if you want to start receiving bitcoin on your phone from a friends mobile wallet, you can click on the icon for the QR code for them to scan (recommended) or they can copy/paste the address and you can manually input it in the address field.

This is the first step of using the mobile app wallet interface to begin receiving your bitcoins, but the next part (which we will cover in the section below) will address the multi-factor authentication step for you to securely add your new loot onto the hardware wallet (wirelessly) from the app on your phone, so your private keys remain offline, where they belong.

Of course, Security, the most important factor when choosing a hardware wallet. You are after all, investing in a secure device that is not only easy to use, but securely keep your private keys offline and in your possession at all times. This device finds a nice, happy medium of convenience and security when using the device. I know, I know, you are probably wondering “How secure is this thing if you are connecting via bluetooth? I’ve heard this is not a secure method of transmission.”

From my personal experience, it’s rock solid. There is a 3-step authentication process for each transaction you process, including biometric authentication, ala Face ID or Touch ID to confirm transactions on top of the other 2 authentication steps. I will list below an outline from their website that outlines their security details in a much clearer way than I could. After what I read below, I am convinced. This device is VERY secure.

“Secure Element

Your private key is stored safely in a CC EAL5+ certified S.E. Chipset which is equivalent to FIPS complied security level, similar to the US military’s requirements, and the private key never leaves the CoolWallet S. This chip calculates all the necessary algorithms and transmits only the calculated results (non-sensitive data) out to the phone via Bluetooth.

Encrypted Bluetooth

The Bluetooth connection can only be initialized when the wallet is turned on within a proximity of 10 meters. The design of our product uses an AES256 Encryption to communicate between a CoolWallet S and your phone along with a dedicated pairing passcode. Thus, any unauthorized devices are prohibited to communicate with the card for data retrieval.

2+1 Factor Authentication

The CoolWallet S and our app uses a sequence of biometric verification steps as well as a visual check and a physical confirmation button push on the device itself to ensure that you are in control of your CoolWallet S and that the transaction is indeed correct and valid.

Tamper-proof Technology

Cool Wallet S uses a patented “ Cold Compression “ process which makes it impossible for hackers to install intercepting devices that can alter the transaction details. The Cool Wallet S is wafer-thin and there is not extra space on its circuit board. With an adhesive layer that cannot be removed (even with a heat gun- the Wallet.Fail team tried) without visual damage, any alteration or tampering will be immediately visible on the CoolWallet. In any case, the Secure Element will still protect your private keys.”

Advantages:

  1. Very unique design. You won’t find ANY form factor or design of a hardware wallet like this one. It’s simplicity and security in the design, makes this device a no brainer for the every day crypto spender.
  2. Ease of use. This device only took a handful of minutes to setup and start using. Between activating the app, pairing the device, and recovery seed words, I was already making secure transactions in less than 10 minutes.
  3. The device is always “Cold”. This means that even though it interfaces with a “Hot Wallet”, the card is completely separate and your private keys never leave the secure element unless physically authorized by you after secure authentication.
  4. Easy to Read. The E-ink display was a good choice for not only being durable and long lasting, but allows you to confirm the send/receive address on the app AND the E-ink display for extra security when performing and authorizing transactions.

Disadvantages:

  1. Not open-source. This is kind of a big one, as having a community reviewing the security, reporting bugs, and overall being “transparent” with everything going on in the firmware and security features is a powerful tool. Not only does it provide transparency, but it brings the community together, which helps with user-engagement.
  2. Coins Supported. Now, I am going to go easy on this one, because this is the most portable hardware wallet I’ve ever used, so it stands to reason it can’t hold as many coins as a wallet like Ledger or Trezor. However, this appears to be a topic CoolBitX is working on expanding, so there is light at the end of the tunnel.

Here is a list of the current coins supported, which is still fairly solid, but if you use lots of different coins and plan on HODL’ing them for a while, this might not be the best wallet for you.

Cool Wallet S — Conclusion

Overall, this is one of the easiest and most convenient hardware wallet solutions. It can literally fit right in with your other cards in your fiat wallet (which is still relevant, for now) and is very easy to use and only needs a charge about once a month as BLE is very low energy and efficient.

Having a wireless, secure hardware wallet is VERY nice to have, especially when you’re on the go and you want to make sure your assets are securely offline. Having said that, there is only one other option you can choose that is even remotely close to this one and that is the Ledger Nano X. The Cool Wallet S is cheaper (and sleeker) for only $99, and the Ledger Nano X is a larger and bulkier device and starts at about $120.

Which one should I choose? Well, that depends on your use case. If you want something you can fit in your wallet and you don’t need to carry in your pocket at all times, I would recommend the Cool Wallet S, to be honest. The overall user experience was cleaner and easier than the Ledger Nano X. I would only recommend the Ledger Nano X, in the event you need more coins accessible on the go, which is typically not needed as much for spending and such, plus it’s going to cost more.

Bottomline: If you want a unique, sleek, and easy to use wireless hardware wallet that is under $100 you can use on the go with you in an every day situation? Get the CoolWallet S.

What do you think? Is there a better wireless hardware wallet that you’ve used for a better price? Let us know in the comments below!

NOTE: This post may contain affiliate links. This adds no cost to you but it helps me focus on giving as much value as possible in every single post by being compensated for recommending products that help people succeed.

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Bitcoin Trading – Before You Begin

Before you begin trading, you need to understand that Bitcoin trading is a business – it’s done to make money and it’s definitely not a get rich quick scheme.  If managed properly, Bitcoin trading is a legitimate means of attaining financial freedom.

Always remember that day trading and investing in Bitcoin involves high risks, and losing a lot of money IS a possibility.  In other words, Bitcoin trading is not for the inexperienced, or the naive, it should not be entered into lightly.

As with any type of business venture, you need to define your Bitcoin trading goals before you actually begin to trade.  So, you need to do some solid planning.

A good trading plan covers topics like:

  • How many trades will you take per month/day/week?
  • How much risk should be taken per trade?
  • Which system or set of indicators will you use to find the right stocks to trade?

It is very important that you take Bitcoin trading seriously.  It is a business, so educate yourself, prepare your funds, plan carefully, and then execute your plan.  This will set you far apart from the gamblers out there who want to get rich quick.

There’s a saying about stock traders that says it all: “a stock trader who wishes to make his million in one day will be hung in one week.”  If you put just a little forethought into your trading plan, you can avoid these mistakes.

Successful Bitcoin trading, like so many other things in life, requires you to have skill, discipline, and a good plan.  It is not for everyone.

However, if you are serious about getting into online stock trading and you’re willing to give all your effort to be successful, then welcome!  I wish you all the best in your trading!

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Dollar Cost Averaging (DCA)

Over the long term, overactive and unprofitable traders can burn through unnecessary capital that could have otherwise productively been invested. As many can attest, outperforming the market is hard, and timing the market can be stressful.

Many long term investors recommend a method called Dollar-Cost Averaging (DCA). DCA reduces the stress of timing market tops and bottoms by purchasing a fixed dollar amount of an asset on a fixed schedule, regardless of price.

For example; you buy $10 of BTC every two weeks for three months, instead of buying $60 of BTC at today’s price.

By buying a small % of the total allocation every other week, you are getting different purchase prices of BTC. Some weeks you will get more Satoshi’s (the divisible unit of BTC), some days you will get less, but over the longer term, you will likely acquire more than if you outright bought today.

There are a couple of assumptions to be made when DCA:

1) The asset is volatile to BOTH the downside and upside. If the asset you are buying keeps going down and down, you may have just bought a worthless asset. Cut your bag before it gets too heavy. If you are buying an asset in a clear uptrend, your best bet is probably to buy in full now and hold. If the asset has proven to go lower in the short term, then higher in the long term, it is probably a good asset to DCA. Bitcoin and S&P are the best examples of well documented bidirectional volatility.

2) The commission you pay on every scheduled transaction must be negated by future returns on equity. If you are paying 5-10% fees per purchase, you need to make more than that in ROI to JUST break even. Sometimes buying in smaller lots can result in higher fees, as exchanges have a fee tier that rewards whale traders.

DCA Bitcoin Calculator: https://dcabtc.com/

DCA Wikipedia: https://en.wikipedia.org/wiki/Dollar_cost_averaging

DCA Nerdwallet: https://www.nerdwallet.com/blog/investing/dollar-cost-averaging-2/

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