Why We Only Trade Bitcoin

jason  ·  2018 Sep 29

Trading has everything to do with risk management. It's not many traders put it at their #1 priority list but it should be.

The reason why it's overlooked it's because it's not obvious at first sight, we all want profit first. Long term profits become harder and harder if you have no risk management in place.

We let our strategy run on both Ethereum and Litecoin, and we needed way more "guards" against volatility then Bitcoin. This is simply because Ethereum is smaller and easier manipulated. Once we tested Litecoin, which in its case is much smaller again then Ethereum at the moment of writing, the precautions needed were even higher.

Yes, our backtested profits were higher in alts, but so were the drawdowns. I'm not sure if people can stomach this volatility when someone else is managing their money. Besides that, it also increases our risks.

Since most alt coins are strongly related to the up and downswings of Bitcoin, it basically doesn't matter which coin you'd pick. Then it only makes sense to pick the one that is biggest and will require much larger amounts to manipulate, Bitcoin.

However, we have some ideas to test alts with our BTC signals in the future.

How about alt to alts?

This only makes sense if your goal is to increase your Bitcoin value. Our goal is to increase your dollar value, so it doesn't make sense to trade alt to alts. You might make a profit in Bitcoin selling your alts, but if Bitcoin lost 50% of its value at the same time, I'm not sure you'd be happy about that.

So we didn't pick Bitcoin because we believe in it or like it. We do not let our personal preference in on the trading floor. It's picked because it made business sense based on risk/reward.

We might support other coins in the future if it makes business sense, or even make combination trades.