Lessons from Top Traders: How to Adapt Their Strategies for Crypto Success
Explore strategies from top traders like Timothy Sykes, Paul Tudor Jones, Richard Dennis, and Howard Marks, and learn how crypto traders can adapt their approaches for success.
Top traders are recognized figures who have achieved notable success in the market by reaping colossal profits.
But who are some of them, and how can crypto traders adapt their strategies?
Let's explore Timothy Sykes, Paul Tudor Jones, Richard Dennis, and Howard Marks.
Timothy Sykes Lessons for Crypto Promotions
The reflection of low-cap stocks in cryptocurrency markets are meme-coins and others susceptible to promotional events such as newly listed tokens.
Sykes is a penny stocks trader who made a fortune by exploiting pumps and dumps among low-cap securities. From his 7-step method, we can resume four primary lessons:
- Look for assets whose prices are in range while promoters talk about them.
- Expect a market hype spotable via volume.
- Seize a pump on the upside. If it is late, buy the dip following the first dump.
- For the downside, trade a dump towards the average price.
Examples:
- TON-coin: this is The Open Network token that supports Telegram's blockchain. When it was listed on Binance, it had a spike in its price.
- LENS meme-coin: the propaganda spread by HBO on a new Satoshi Nakamoto documentary birthed out LENS in reference to Len Sassaman, who the public expected to be pinpointed as the BTC creator. At the time of issuing, LENS prices increased but sunk later.
Paul Tudor Jones Strategy for High-Capitalization Cryptocurrencies
PTJ’s strategy is based on identifying turning points in a market. Since this is a counter-trend method, which is typically not recommended, it is also a powerful way to seize sweeps when the markets panic.
In fact, that is what Paul Tudor Jones did during the Black Monday crash of 1987.
Something to remark on this strategy is the implementation of the 200-period simple moving average as a confirmation tool for a turning point in the market.
In this sense, this strategy does not aim to discover where the turning point will be but to enter a trade where the market starts to have momentum.
This strategy can work with high-capitalization assets that tend to prolong their directional movements, but when they reverse, they do it proportionally to the extension of the trend.
Check out more on Paul Tudor Jones crypto trading strategy here!
Richard Dennis’ Pyramiding Concept for Exploiting Crypto Futures Trading
Richard Dennis is known for reaping tremendous gains in its beginnings as a commodity trader.
He also developed the Turtle Trading Strategy, which is a trend-following system in which thirteen novice traders were trained, and like Dennis, generated massive profits.
How did they do it?
Well, Richard Dennis is an advocate for what he calls pyramiding, which consists of sizing up a winning position as it evolves with a mid-term to long-term trend phase in the market.
Furthermore, Dennis recommends cutting losses as fast as possible. This approach guarantees two things:
- High asymmetry.
- Better risk management.
Have a look at the crypto trading key lessons of Richard Dennis here!
Howard Marks: Asymmetry and Risk Management for Cryptocurrency
Finally, when talking about asymmetry and risk management, Howard Marks may be a great reference.
Marks plants the idea of risk as all possibility of loss during a trade.
By understanding that risk is inevitable, then traders should not strive to avoid it but to handle it by pursuing asymmetry in their trades.
This requires developing a system where, for example, a trader who wins ten percent in a market rise, will not lose the same when the market declines ten percent.
Instead, this trader should guarantee, at least, five percent by managing his position sizes and potential losses appropriately.
Conclusion
If crypto traders want to exploit meme-coins:
- Timothy Sykes offers a strategy for promotional and low-cap assets.
- PTJ and Richard Dennis are the kings for long-term trend-following.
- Howard Marks highlights the importance of asymmetry for proper risk management.
Disclaimer: This article was written to provide guidance and understanding. It is not an exhaustive article and should not be taken as financial advice. Obiex will not be held liable for your investment decisions.
