View profile

The Wolf Den #72 - Trades, DeFi, Project Reviews, Lessons And More

Revue
 
 
July 7 · Issue #72 · View online
The Wolf Den Crypto Newsletter
This newsletter is sponsored by 2 amazing companiesVOYAGER and PHEMEX.
I use Voyager for my spot trading and investing (and to compound interest) and I use Phemex for trading with leverage. Sign up to both with the links above and get some free Bitcoin. I really encourage you to check them both out - you know that I never endorse a product that I do not use!
Make sure to use code SCOTT25 after you download the Voyager App to get $25 in free Bitcoin.
Trading is a deeply personal pursuit.
Many wrongly view it as a competition against other traders or a battle against the market. The reality is, your worst enemy is yourself. It is an endless battle to control your emotions and stick to your plan.
“Every trader has strengths and weakness. Some are good holders of winners, but may hold their losers a little too long. Others may cut their winners a little short, but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach.” - Michael Marcus
You can’t copy someone else’s trades and expect to copy their results. Every person manages a trade differently and has a different risk profile. They are approaching each trade as a different percentage of their overall portfolio - one trader may be taking a tiny position, while another is heavily risk-on and throwing their entire trading stack at the trade. They are approaching each trade from a different perspective - one may be only trading the technicals, while another may have a deep fundamental belief in the asset. They are likely approaching each trade on different time frames - one may be a swing trader, looking to take profit in 2 months, while another may be a day trader looking for a quick scalp.
Identifying who you are as a trader and developing a system that plays to your strengths and dampens your weaknesses is a must.
YOU NEED YOUR OWN SYSTEM to protect you from…. yourself.
Twitter, paid groups and newsletters are great for finding trade IDEAS, but should not be used for copying specific trades, even if you are using the same entry, stop loss and take profit levels to a T.
As I often say, it does not matter what strategy, indicators or techniques you use to identify trades. What truly matter is your approach to risk and trade management, especially as it pertains to your specific portfolio and goals.
My goal with the charts in this newsletter is to show you my approach. I want you to see the way that ideas formulate for me, and what it would take for me to actually execute a trade. This will NOT WORK FOR YOU. What you can do is take these ideas and plug it into your own system - if it fits, you can use these setups to trade them in your own manner.
As an example… lately I have been largely using support and resistance and classical pattern charting - lots of descending resistance lines being broken on altcoin charts. It’s what has been jumping out to me. If your normal favorite indicator is Moving Averages, then you can use my idea, pull up the MAs or EMAs and see if there is confluence. If the ideas go well together, you may find a great trade that works well with your own ideas.
Copying trades and hoping to make money is a lazy approach and one that is likely to lose you money. Further, the person you are copying could disappear some day, leaving you with a loaded underwater portfolio and no understanding of how to trade your way out of it.
Do the hard work. Learn to trade for yourself. It will give you a lifetime of satisfaction, freedom and profit if you take the time and learn to do it properly. This newsletter is a small step in the right direction, but there is endless free and paid information available to anyone who truly wants to master trading. My own mentor, Christopher Inks (who wrote an article on MACD below), has a full course and Discord group (that I admin and participate in) that is incredible - https://howtotradetowin.com/. If you do not want to pay, he does free livestreams regularly that are loaded with knowledge.
To my free members (I love you!) - paid members receive emails like this at least 2-3 times a week. Every Thursday I chart any request sent by my paid members, often over 30 or 40 charts. It’s a ridiculous amount of work, but I do my best to add real value to anyone who subscribes. If you would like to join the paid side, you can do so for $15 a month here.
This will give you access to everything that I have ever written. If you cannot use a credit card, please contact me directly to pay with crypto by responding to this email or sending me a DM on Twitter.
What’s In This Issue?
  1. Bitcoin Thoughts And Analysis
  2. Trading With MACD 101 By Christopher Inks
  3. The Wolf Of All Streets Podcast Ft. Eric Feigl-Ding
  4. pNetwork - The Future Of DeFi?
  5. UTrust Review - Bringing Us Closer To Mass Adoption
  6. Bitcoin Dominance
  7. Altcoin Charts And Trades
  8. What Is DeFi? By Adam Tarlowski
  9. Legacy Markets
  10. Short Selling 101 By Sahil Bloom
  11. My Recommended Platforms And Tools
  12. Phemex Adds TRX - ADA And ONT Coming Soon
  13. Voyager Adds Maker, COMP and 2FA
  14. Goldman Sachs Cuts US GDP Estimate

Bitcoin Thoughts And Analysis
While Bitcoin has been sideways, I have managed a few successful longs, most recently from $9,030 to the local top, which I hit almost to the dollar. I still have 25% of that long open, but that’s a small trade at this point. I had strong conviction in that long, with that target, but have low conviction on any trade from the current price. Price was trading at a key level and with significant bullish divergence on every time frame up to the 12 hour. That’s an obvious long for me, every single time. I shared all of this on Twitter, as we were between newsletters.
I can see an argument for both sides and plan to sit on the sidelines for the moment. Bitcoin continues to range sideways on larger timeframes, and to interact heavily with the current area. More details below.
MONTHLY CHART
$9,243 continues to be the major story on the monthly chart. I have highlighted it in red, so that you can see how many candles have closed slightly above or below and have wicked through. This seems to be the most important area on the entire chart, as evidenced by the fact that the last 6 (now 7, for the moment) candles have closed at this line or had a wick that was stopped there. It’s incredible. Going back further, there were only two candles in the last 13 that did not interact with this area meaningfully. 12 of the last 15 candles have interacted with this line with either a close or wick as a clear top or bottom. That’s well over a year of price action that has effectively used this area as a magnet. We are presently there again, which is why I have little conviction about the next move.
WEEKLY CHART
Bitcoin is trading sideways. Absolute chop. As I have said in a few newsletters now, going back more than a month, the two blue lines are what matter on this time frame. If price breaks above the top line and holds, that’s a long signal. If it breaks below the lower line and holds, a retest as resistance is a short. That would also likely signal a failure of the 50 MA on this time frame, which supported a number of candles in the past few months.
Last week’s candle was a spinning top or simple doji, depending on your interpretation. That could be a signal that the weekly is reversing back to the upside, but technically requires confirmation in a green candle this week - and it’s only Tuesday.
At the end of the day, we really want to see the break of $10,500 and a higher high. That’s where we can start to fell truly bullish again.
DAILY CHART
Perfect illustration of why I exited the bulk of my long - you can see the blue resistance and 50 MA on the daily in perfect confluence. The odds of blowing straight through both of those without a drop were decidedly low - that’s a lot of resistance in one area, which also lines up with the monthly analysis and this entire area as a whole.
I want to see $9270 (lower black line) hold as support here, and then a break of the 50 MA and descending blue line to the upside. If that happens, we should start thinking about revisiting the $10,000s, although there are a lot of areas of resistance between here and there. $9500-$9600 will NOT be easy and could be another top here, making a lower high before further movement down.
To be clear, at the moment we are at strong resistance which will require volume and a big push to break. A top here would also make another lower high.
4-HOUR CHART
Much wow! As I said, price topped out at resistance to the dollar. Quite the take profit. A break of this channel would be bullish, obviously. Rejection here and a drop could keep the channel intact with price still dropping very far to touch the bottom. On this small time frame, bulls want to see $9189 hold as support. An argument can certainly be made that price is currently consolidating under resistance, which would lead to a break up.
Trading With MACD 101
Written by Christopher Inks
The MACD indicator, which stands for Moving Average Convergence Divergence, is a trend-following momentum indicator that belongs to a specific family of indicators known as oscillators. This means that it can be helpful in a trending market but not much in a ranging market since the indicator is designed to fluctuate between low and high bounds. As a matter of fact, a trader is more often going to lose money attempting to use the MACD in a ranging market than not.
It can be used to determine overbought and oversold conditions, determine the market’s momentum, and even to identify divergences that lead to reversals. It is also important for traders to understand that the MACD is, for the most part, a lagging indicator meaning that it tends to tell you what has happened which is useful in confirming a trend. But, as with most things, there is an exception and that is when using it to identify possible trend reversals. In this latter case, it can be viewed as a leading indicator.
How is the MACD Calculated
The Moving Average Convergence Divergence indicator is made up of the MACD line, the signal line, the zero line, and a histogram. By default, the MACD line is calculated by subtracting the 26 period EMA from the 12 period EMA. The further these two EMAs pull apart the higher the MACD line rises while the closer they come together the lower the MACD lines declines. The signal line is the MACD’s 9 period EMA and is plotted on top of the MACD to be used as a buy or sell trigger. When the MACD line is above the signal line the market is trending upward and when the MACD line is below the signal line the market is trending downward.
The zero line is the indicator’s equilibrium. This is the area of the indicator where the histogram fluctuates between positive (green) and negative (red). When the MACD is above the signal line it indicates that the market is more bullish. Conversely, when the MACD is below the signal line it indicates that the market is more bearish.
MACD’s histogram provides a visual for the distance between the MACD line and the signal line. As the MACD line pulls away from the signal line, the histogram expands. It then contracts when the MACD line pulls closer to the signal line. This can help traders identify when bullish or bearish momentum is increasing or decreasing. The histogram will be above the zero line when the MACD is above the signal line and below the zero line when the MACD is below the signal line.
How to Profit with the MACD
So how do we use the MACD to make money? As already mentioned, one way is to determine whether the market is more bullish or bearish by noting if the MACD is above or below the zero line. Another way is to determine whether the market is trending bullishly or bearishly. If the MACD is rising, then the market is understood to be trending bullishly and if declining then it is trending bearishly. But because this is lagging information, traders should not expect to use the MACD indicator in this way to buy the absolute lowest price or to sell the absolute highest price.
A third way to use the MACD indicator is to buy the asset or security when the MACD line crosses above the signal line (positive crossover) and to sell it when the MACD line crosses below the signal line (negative crossover). Again, traders will not be buying the absolute low or selling the absolute high, but the crossover can act as confirmation for an entry into, or exit out of, the market. The stronger the trend, the better this technique works. The positive crossover is most effective when it occurs below the zero line. The negative crossover is most effective when it occurs above the zero line. But the weaker the trend the more likely the indicator is to give false signals.
Divergences are a fourth way to use the indicator. Used in this way, the MACD becomes a leading indicator rather than lagging one. What traders want to look for are divergences between the indicator and price action. If price is making a higher high while the MACD is making a lower high, then that divergence may be signaling that the price is nearing a point where price will be reversing lower. And if price is making a lower low while the MACD is making a higher low, then that divergence may be signaling that price is nearing a point where it will be reversing higher.
Finally, traders can use the MACD’s histogram to signal when to enter or exit a trade. As with the divergence technique just described, if price is making a higher high but the histogram peaks are making lower highs, then traders should be prepared for price to reverse lower. And if the histogram troughs are making higher lows while price is making lower lows, then traders should be prepared for price to reverse higher. This divergence is often seen sooner than the MACD line and price action divergence thereby giving traders more of a heads up.
As with all indicators, the MACD should not be used as a trader’s sole reason for entering or exiting a trade. Higher confidence is found in confluence. This is when a trader combines multiple trading techniques or analysis thereby increasing the likelihood that the signal is legitimate. If the MACD provides a signal, traders are best served by looking at other indicators or candlestick patterns, for example, to see if they are also giving the same signal. The more confluence a trader has with a signal, the more likely they are to complete a winning trade.
For more information like this and to interact with Chris on a daily basis, join his Discord and take his course! - https://howtotradetowin.com/
The Wolf Of All Streets Podcast Ft. Eric Feigl-Ding
The Wolf of All Streets | Scott Melker Podcast
Eric Feigl-Ding, Renowned Epidemiologist and Health Economist, on the Current State of Covid-19
Dr. Eric Feigl-Ding, Senior Fellow at the Federation Of American Scientists, returned for a second appearance on the podcast to cover everything new regarding Covid-19. Characterized by cautious optimism and outspoken advocacy for science, Dr. Eric Feigl-Ding foresees a hopeful future win against Covid-19, even after a failed US response to the virus.
Eric and I further discuss the Covid-19 fog of war, rugged individualism mixed with a virus, selling the middle seat on an airplane, why Americans suffer from a “see it to believe it mentality,” how to determine if it’s safe for your kids to go to school, the paradox of increased cases and decreased deaths, why the U.S. is like a leaky ship, and a positive outlook for a quick vaccine arrival.
pNetwork - The Future Of DeFi?
The EDO token is being upgraded!
I recently interviewed Thomas Bertani, Director of Eidoo (among many other things!) for my podcast, which got me really interested in pNetwork, the new project from their team. Also, you may have noticed that I have been posting charts for their new token $PNT since it’s rebrand from $EDO. The more I dig into the project, the more interested I become. Here’s a quick review.
What is the pNetwork, and what role does PNT play? 
The pNetwork will be the decentralized network and governance layer powering pTokens. PNT is the governance token which will be used to stake, vote and earn interest within the pNetwork DAO. Anyone holding PNT will be able to vote on different improvement and development proposals. For example, members can vote on which new pTokens “bridges” should be developed next, such as pLTC on Ethereum.
 What is Eidoo?
Eidoo is so much more than a wallet. It’s a multicurrency platform which allows you to discover new DeFi tools and tokens, buy and sell crypto, trade using their in-built DEX, earn interest on your digital assets through multiple integrations, mint your own pBTC (Ethereum-compatible Bitcoin), participate in ICOs or IEOS - all through a single app.
What are pTokens?
pTokens enable any crypto-asset to become compatible with any blockchain. This allows liquidity to flow cross-chain and invites holders to explore entirely new DeFi ecosystems. The first of the pTokens series to launch was pBTC, which makes Bitcoin compatible with Ethereum and EOS, without requiring users to ever sell or trade their Bitcoin. pBTC is pegged 1:1 with BTC, so is redeemable for the underlying currency. 
PNT, huge potential
During the initial stages of the pNetwork, an additional economic incentive will be introduced to the system to encourage active participation within the DAO. While at stake, PNT tokens mature an overall 63% interest over two years. The interest is split across the two-year period, granting a higher reward during the first year (42%) and transitioning to half that rate (21%) during the second year. 
PNT is also used as fuel for a variety of services within DeFi platform Eidoo, the sister company of Provable Things (the main development team behind pTokens). This includes staking or burning PNT to reserve the Eidoo Card, a Visa debit card powered by the non-custodial Eidoo crypto wallet.
Here is a more thorough explanation of the technical side.
Introducing the pNetwork & PNT - Provable - Medium
UTrust Review - Bringing Us Closer To Mass Adoption
Utrust — Accept crypto payments, easily.
I have been researching solutions to accept crypto for various projects, and had the opportunity to sit down with the team at Utrust. I was blown away by the product and their plans, so thought it appropriate to share a quick review with all of you.
Utrust is a payment platform that allows online merchants to accept all major cryptocurrencies as a payment method. They offer instant transactions, buyer protection and immediate crypto-to-cash settlements for merchants. The goal is to create a product that is simple, powerful and foolproof. Utrust isn’t just striving to make it as a company, the ultimate goal is to ensure mainstream adoption of crypto. They were formally incorporated as a company in 2017 in Switzerland and got off the ground running with a public ICO that resulted in a $21. investment that funded the initial development of the platform. Since then, Utrust has gone through a massive rebranding, they’ve grown into a full scale company, and they’ve restructured their leadership, empowering a board of directors led by its founders and promoting Sanja Kon to CEO. Sanja’s leadership, and all the knowledge she acquired during her years as a top executive for eBay, PayPal and Vodafone, will help steer Utrust into the decade of adoption.
Utrust markets two core products: the Utrust Widget and Utrust Pay. Utrust Pay allows any business (from over 184 countries worldwide) to accept digital currencies (BTC/ETH/UTK/DASH/DGB) and, if desired, convert them to GBP/EUR/USD instantaneously. There’s also a custodial wallet, the Utrust Wallet, which can be used for instant transactions and payments, while also allowing for instant p2p transfers within the Utrust ecosystem. What stands out about the company is that they are constantly adding value. They have just announced a new invoicing solution that will allow users to receive payments in digital currencies from anywhere in the world and get paid in fiat, in their usual bank accounts, wherever they are. Cashback and staking are also in the works. Their own token, UTK, has experienced spectacular growth this past 2 months, ahead of the release of details for the new token utilities coming this 3rd Quarter.
They haven’t started mass onboarding yet but are already present in a significant amount of markets, such as real estate, luxury fashion, cosmetics, consumer electronics and sports. They already work with businesses like Luís Onofre, Alternative Airlines, S.L. Benfica, Arms &McGregor and Phone House, just to name a few. This hasn’t gone unnoticed by top venture capitalists around the world, and Utrust is already part of the Alchemist Accelerator and 500 Startups.
Major steps have been taken in the last couple of months, with Utrust adding plugins both to Wordpress and Magento’s dashboards, allowing for all of its almost 4 and a half million combined webstores to quickly and seamlessly start accepting digital currencies with their platform. Utrust is focused on expanding its ecosystem, and the mass onboarding of new merchants is the next natural step for a company that has no intention of slowing down until the whole world is paying with the money of the future.
If you are looking for more information, here is a thorough review of Utrust from my friends at Blockfyre.
Utrust (UTK) Review - Research Report by Blockfyre
Bitcoin Dominance
I have been pointing to this potential drop in Bitcoin Dominance for weeks. It’s nice to see it come to fruition and to see altcoins thriving. As I mentioned a few newsletters ago, even after the breakdown we were likely to see a retest of the lower ascending line as resistance and that alts would suffer short term. We say exactly that happen. However, the retest of both horizontal and ascending resistance led to a significant drop off, shown in the green circle. This is exactly what we were watching for. There will be bumps in the road, but Dominance dropping should continue to allow altcoins to do well. If Bitcoin price can continue to rise while this is happening (I have my doubts), then we will see a perfect storm of USD and BTC balances rising together - like finding a unicorn for crypto traders.
Altcoin Charts And Trades
It has been a great week! All of the setups that I posted of late are in profit, with ERD continuing to defy gravity (almost 4x now), PNT absolutely ripping (I posted this setup a few times), large caps like EOS and LTC rising as expected and more. CHZ and POLY both reacted well at support on the bullish divergences that I shared on Friday as well. MATIC and WRX both rose from Thursday’s newsletter, and HOT and BTT are both right at the point of looking very good. Paid members should go back and revisit recent setups, they are all still valid.
Everyone has their own definition of alt season. As you know, I believe that we have been in an alt season for many months and we have the trades here to prove it. I have now 4Xd my alt trading account this year, exclusively on trades that I have shared here. That came primarily from a few massive trades that I entered and exited at various levels with heavier positions. Many trades stopped out for small losses or never really materialized. It doesn’t matter, that’s trading. The large gains more than make up for it. There will be weeks when no trades seem to go our way. Be patient, it will come.
We caught the breakouts on coins like ZIL, VET, ERD, XVG and way more. Now the goal, with Bitcoin Dominance dropping, is to continue cycling through alts as traders and find the ones that are likely to go up next. Easier said than done, and it’s still wise to buy a coin you believe in and have some patience. A LOT OF COINS look great at the moment, but that does not mean there is a great trade or entry on all of them.
BAND/BTC
We have had some epic trades on this pair already. It has currently broke through resistance on rising volume. Now I want to see it flip 14308 to support. If it can manage that, it should eventually target the top of the descending line, around 230. Stop loss at this point comfortably below the line at 12328.
BTT/USDT
I am posting this again, because it really appears to be consolidating hard against resistance. If it can break the descending line and hold it as support, and also flip 3396, I would expect a quick trip to 4028, for starters. The key levels are marked, with the ultimate target in a true alt season (huge IF) of the top of the descending wedge. This is a really major breakout on a large time frame IF it happens.
DOGE/BTC
It is no secret that DOGE is my favorite asset to trade, perhaps of all time. I have caught a few of the epic DOGE cycles, doing 5-10x trades with little effort. These cycles always require patience, which give us time to slowly accumulate and fill a nice position. I have been buying DOGE now for months in this trading range and completed my bag yesterday at 27 sats (which I tweeted at the time).
Price is currently breaking into the top half of the trading range. We want to see the EQ (equilibrium, dashed centerline) hold as support now, at 30 sats. You can also see that price is finally breaking the descending line that started a YEAR AGO. This is how DOGE cycles have worked in the past (doesn’t mean it will work this time), with this being the longest accumulation ever. If price can hold above that descending line, we should see another major cycle up from this beloved dog. The target of this smaller trend is 44 sats, at the top of the descending line.
You thought I was done? Oh no, that was just the beginning. Zooming out to the weekly chart, we can see that DOGE is testing the larger trend line that would indicate a larger cycle up. Breaking this line and holding it as support should send price to 110 sats or so. Bang.
ERD/BTC
This happened before the newsletter, unfortunately, so there is no immediate trade here. As you know, we have been in this since 22 sats, aggressively trading every level. I just wanted to post this because it’s a BEAUTIFUL example of a cup and handle. A cup and handle is only valid as continuation - if you see someone posting one as a bottom or reversal, run away. In this case, price formed a perfect rounded cup, then a handle (bull flag) and the broke the neckline of the cup (71 sats). That was the fresh long signal. The target is extrapolated by measuring the depth of the cup and adding it above the neckline - so around 100 sats in this case.
ETH/BTC
I dollar cost average into Ethereum on an almost daily basis, and have been for the past 4 months. I am very bullish on the coin because of DeFi and also because of the chart. I believe it will continue to beat BTC.
It has been ranging sideways for over a month until yesterday, when it broke above the range and closed the daily candle. You expect a retest as support, which is what we are seeing today. IF IT CLOSES ABOVE THE RANGE, then this should continue a major bull run. A close back in the range could signal that this was just a deviation and that a trip to the range bottom is likely.
The last time I posted an ETH/BTC trade was where the red line is, showing bullish divergence with RSI. Beautiful.
LINK/BTC
Beautiful. This broke the all time high and is currently in price discovery. Not much to say - it seems obvious to buy the dips on this pair as long as “alt season” commences. I have orders now at the pink line. Our last entry (I exited too soon) was at the bounce from ascending black support.
What Is DeFi?
Written by Adam Tarlowski.
Leading up to the next major bull run, DeFi has taken center stage as a new promising aspect of the blockchain space that is still in its infancy. Speculators, developers, traders, and investors have jumped into the DeFi craze to capture some of its potential. The purpose of this segment will be to break down what DeFi really is and what it can offer in the coming future.
Like Bitcoin, grasping DeFi isn’t always clear or intuitive. If you understand that Bitcoin is decentralized, meaning it does not require a 3rd party to transact, DeFi is similar in that it allows traditional finance to function without a middleman, institution, or intermediary. DeFi works on top of the blockchain and is almost entirely being created on the Ethereum network. Smart contracts created on the Ethereum network are the core of what DeFi truly is. These contracts don’t require a middleman to ensure the contract is trusted and fulfilled, allowing finance to function in a way never seen before in history.
DeFi has the capability to accomplish just about anything in traditional finance, from earning interest, to collateralized debt positions to raising capital etc. Banks have historically dominated the financial sector, yet haven’t done any favors to the majority of their customers. DeFi strips the power away from banks. Even more disruptive, DeFi breaks the barriers of entry to traditional finance, opening the gates for anyone to participate. An easy way to start participating would be searching for a DeFi exchange to earn interest on a crypto loan. This is a good place to start searching where you may begin in DeFi https://defirate.com/dex/. Our team uses Voyager and BlockFi (who are presently offering 2X interest for a month to new signups) to hold coins and earn interest.
The catch to all the great aspects of DeFi is that it still has a long way to come. Many people don’t understand it, so taking advantage of it can be risky and confusing. Luckily, if you made it this far you probably understand something about crypto, so taking on DeFi is just one more step. DeFi also runs the risk of losing your investment because you must loan in order to earn interest. Just like finance, it holds similar risks, the primary change is how it is all done. This is why Voyager is a happy medium that allows users to safely earn interest on their crypto holdings without giving up their private keys or running the risk of being liquidated.
Traditional finance locks up money for the banks’ benefit and use. DeFi does the same. The rate of locked money in DeFi is increasing at an exponential rate with no signs of slowing. This is just one of the many reasons everyone in the space cannot stop talking about DeFi. In theory, increased locked money means less selling and increased price.
Projects like COMP, LEND, REN and BAL have been the talk of the town, but here are under the radar projects that are contributing to the DeFi craze as well, such as ERD, PNT, and BAND. A lot of the work in DeFi will be done behind the scenes, meaning if it grows, it would simply become normalized like traditional finance with added benefits. The big question becomes whether our current financial system will adapt to this newest evolution of finance or be entirely replaced. As for traders looking to stay ahead of the pack, key trends to watch for will be how much DeFi is mentioned and grows leading into the next bull run. A lot more credibility would come with the next bull run if DeFi is a catalyst rather than an ICO craze.
Legacy Markets
The stock market is chopping sideways at the moment, so it’s hard to define any clear trades today. Everything that I have posted in the past weeks has gone up with flying colors. It’s important to remember that market conditions need to be right to take high conviction trades. Our gold and silver trades continue to absolutely rip, but those are not shown here.
APT (ALPHA PRO TECH)
I posted this in the last FREE issue, and it went up over 60% in a few days. Incredible. If you missed an entry there, it currently appears to be consolidating. This company makes PPE - as cases rise, I expect continued demand for masks, shields etc. Simple. That was the premise of the trade in the first place, which lined up well with the TA. I want to see it hold $17 and break the local descending black line. If it does so, this should continue up, with the ultimate target of $41.71 at the top of the black line.
CRON (CRONOS)
I posted this late last week and it did not disappoint. Price broke out of the descending wedge and tested the EQ of the ascending channel, just as discussed. For a fresh entry, I would be looking for either a clear break above that dashed ascending line, or a retest of the $6.04 area as support. Either way, I expect this to continue up with time. If you recall, this is also a fundamental play based on a potential Biden presidency that would be good for the marijuana space in general. This is speculative, so understand why I am looking at it.
TSLA (TESLA)
I took a small short on Tesla at $1400. This is risky, so I did not take a huge position. The chart is impossible to read at this point, because the stock is in price discovery for fresh all time highs.
There is significant POTENTIAL bearish divergence on the weekly, which is not tradable at this point. In fact, a confirmed div on the daily can play out but still see price going very far the other way first. Just something I am watching.
I am more trading this on the idea that it’s overprice, there are gaps up on every daily candle, and it’s reaching historic levels of overbought RSI on lower time frames. I think it needs to cool off.
I am sharing this because I did it - not a trade I would suggest to anyone for now.
Short Selling 101
Written by my friend Sahil Bloom. He is a MUST FOLLOW. I have never met someone who has such a knack for explaining complicated topics in such a simple and palatable manner.
With the markets continuing to rally, there has been more talk of “shorting” or “short selling” stocks. But what does that mean and how does it work?
Here’s a quick educational primer: Short Selling 101
When you believe a stock is going to rise in value, you are said to be “long” the stock (“bullish”). When you believe a stock is going to decline in value, you are said to be “short” the stock (“bearish”). Short selling is simply how you bet on the decline in value.
Imagine you read that Colombia is experiencing a very wet Summer. You believe this will lead to a huge coffee harvest, flooding the market with coffee and driving down the price. You want to profit from this.
So you borrow a bag of coffee from Jimmy, your neighbor.
You sell the bag of coffee to Paul, your other neighbor, for $20, the price of the bag at your market. You now have $20 but you owe Jimmy a bag of coffee (you borrowed it, after all).
One month later, the price of coffee drops 50%. You buy a bag at the local store for $10.
You walk over to Jimmy’s house, hand him the new bag of coffee, and give him $1 as interest on the borrowed bag.
So you sold a borrowed bag for $20 and then bought it back and returned it for $11 ($10 plus $1 interest).
You’ve made $9 profit on your coffee “short” position!
Of course, if you had been wrong and the price of coffee had risen, you still would have had to “cover” your short by buying a bag and returning it to Jimmy. You would have lost money.
Because the price can rise infinitely (in theory), losses from short selling are uncapped.
So this is a quick primer on the topic - Short Selling 101. I hope it was helpful!
Disclaimer: Only experienced traders and investors should think about short selling as a strategy. Given the uncapped losses, it is inherently a more risky strategy than going long.
My Recommended Platforms And Tools
This is where I invest, commission-free. They now let you earn interest on your Bitcoin held in Voyager, so you can compound while trading. Not only that, you’ll get $25 in free BTC when you download & fund.
Rewards Code: Scott25
This is where I trade with leverage and can also trade spot with no fees.
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions.
Self-Directed IRA for Americans - allows you to invest in Bitcoin and any other asset for your retirement, with all of the tax benefits of a normal IRA.
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
A new crypto rewards debit card that I have been testing and loving. I use both the virtual card online and the physical black card at actual retail (I will do this more after COVID!). They offer 6.38% cash back in crypto, which is really astounding.
BlockFI is where I personally store part of my long holdings. They offer up to 8.6% annually, compounding, depending on the asset (BTC, ETH or GUSD), which is much better than any legacy savings account or investment.
They are presently offering 2X on interest payments for a month to people who sign up.
Unstoppable Domains just went live with dChat! This P2P protocol is user controlled and secure. Your .crypto domain is now used for your payments, decentralized website and your new chat username. I love this company - they allow you to send crypto to a simple address and to host a censorship proof website.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
Phemex Adds TRX - ADA And ONT Coming Soon
Bitcoin Futures Exchange|Phemex
Phemex has just added TRX to their spot market, and the team informed me that ADA and ONT, two of the most talked about alts of late, should be coming very soon as well. Spot trading is available on Phemex with 0 trading fees under affordable membership plans, but I was also told that soon it will be possible to trade spot on Phemex under a standard fee-based model.
Voyager Adds Maker, COMP and 2FA
Voyager | App Features
Voyager continues to push the limits of what’s possible with a crypto broker. In the past week alone, they have activated 2FA, added COMP and added Maker, the digital currency that can be used by anyone, anywhere, anytime. They are adding more coins this week, but the official news has not been announced!
Just a reminder that Voyager is publicly traded on the Canadian stock exchange, has NO TRADING FEES and has FDIC insurance on all dollar holdings. Nobody can compete.
Use code SCOTT25 when you download the app to get $25 in free Bitcoin when you fund your account.
Goldman Sachs Cuts US GDP Estimate
Goldman Sachs cuts US GDP estimate, now sees economy shrinking 4.6% in 2020 | Markets Insider
Goldman Sachs economists lowered their third-quarter US GDP growth forecast to 25% from 33% on Saturday, citing weak consumer services spending and the strong uptick in national coronavirus cases.
Reimplementation of strict lockdowns and social distancing practices in states including California, Florida, and Texas are “already having a noticeable impact on economic activity,” the team led by Jan Hatzius wrote in a note.
The firm lowered its full-year growth projection to -4.6% from -4.2%.
The downward revision is largely fueled by a slower-than-expected recovery in consumer spending. The recent resurgence in coronavirus cases has kept Americans from returning to restaurants, travel, and retailers. Stunted spending on key services will likely push a consumer comeback into September, the team said.
A reminder that the economy is NOT THE STOCK MARKET.
The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor.
Did you enjoy this issue?
 
Become a member for $15 per month
Don’t miss out on the other issues by Scott Melker aka The Wolf Of All Streets
You can manage your subscription here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue