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The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader
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Page 1: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

The Risk & Rewards of Crypto TradingRyan Wilday, Elliot Wave Trader

Page 2: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Ryan Wilday

Cryptocurrency analyst at Elliott Wave Trader

Joined EWT as a member in 2015

Trading Cryptos since 2012, with EW since 2015

Started hosting the Crypto service in August 2017

Intro

Page 3: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Disclaimer

Cryptocurrencies are particularly volatile assets. Nothing in this document is meant to suggest that trading cryptos is a good decision for you personally.

Cryptocurrency is a new, less regulated market which contains risks unique to any other assets.

Any mention of past results is wholly unrelated to future performance.

Nothing in this document should be construed as an endorsement of a product, service, exchange, or any other entity mentioned here within.

Page 4: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

What’s New in Cryptos

CME and CBOE Bitcoin Futures

Some SEC clarity on Cryptos

Institutional Arrival

First Mixed Crypto / Stock Brokerage (Robinhood)

Next?: EFTs, More Brokerage Options

Page 5: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

What’s Old in Cryptos

VOLATILITY!

Page 6: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

What’s Old in Cryptos

5x most other asset classes*

*charts.woobull.com

Page 7: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader
Page 8: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Murky Fundamentals

Cash Flow? What cash flow?

Balance Sheet? What balance Sheet?

Price to what?

Balance of Payments?

Page 9: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

The Great Challenge

How to take advantage of this amazing opportunity?

How do you get through or even avoid a 60%, 80%, even 90% drop, or should you?

Or, where do you take profit so you can avoid it?

The Elliott Wave Principle gives objective levels where to enter, take profit. And, these levels can be used to create a very robust trade plan.

Page 10: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

How to Trade CryptocurrencySafely

Cryptocurrencies are a sentiment driven market. How do you value them? We use Elliott Wave is the great discerner of sentiment.

On EWT, we use the Elliott Wave Principle to structure all of our trading:

1. Understand the direction of trend

2. Profit taking targets

3. Risk management and stops

4. Long and short term views

Page 11: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

The Elliott Wave Theory

Theory developed by R.N. Elliott, published in 1938.

Suggests the market moves in waves of sentiment, that have a mathematical sequence similar to mathematical structures found in nature.

People are part of nature and our sentiment runs its course in similar ways that structures develop in nature.

Elliott made some phenomenal predictions regarding the market’s progress that carried through beyond his death.

We find his theory works very well in cryptos as well. They rise and fall in waves of sentiment with some unique particulars vs. other asset classes.

Page 12: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

[1941] should mark the final correction of the 13 year pattern of defeatism. This termination will also mark the beginning of a new Supercycle wave (V), comparable in many respects with the long [advance] from 1857 to 1929. Supercycle (V) is not expected to culminate until about 2012.

R.N. Elliott, 1941

Page 13: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

The Elliott Wave Visual

Page 14: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Elliott and Sentiment

Disbelief

Bear Returns

Chase

Euphoria

Frustration

Despair

Trapped

False Relief

Page 15: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Wave III= 1.618 the length of wave I, in log

Fibonacci Pinball

Page 16: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Wave II retraces .618 of I

Fibonacci Pinball

Page 17: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

The Moon Flight

Cryptos and Elliott Wave

Page 18: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

A personal story using Ethereum, (ETHUSD) ca. March 2017

41 Cents

$21.50

$5.92

Page 19: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Wave 3 = [(top of wave 1/Origin)^1.618*bottom of wave 2]

Wave 5 = [(top of wave 1/Origin)^2*bottom of wave 2]

Page 20: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Ethereum, (ETHUSD) today

41 Cents

$21.50

$5.92

Wave V $6900

$1420

$230

Page 21: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Bitcoin (BTCUSD)

3 Cents

$2.25M

$65-150K

$30

$3200

$2.15

$4700

Page 22: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

.6 Cents

$.88

18 cents

$13.55$3.44

Stellar Lumen (XLMUSD)

Page 23: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

.05 Cents

$1.10

11 cents

$236.00

Bitshares (BTSUSD)

Possible 8 cents

Page 24: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

STEEMUSD (STEEMUSD)

$196

$1327

70 Cents

Page 25: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

How to be successful:

Build a CORE position that you hold through the Bull count on the daily / weekly charts.

Trade around your CORE position using the hourly weekly charts.

The CORE is the position that is most exposed to the large multi-month declines.

The size of positions, or ‘buckets’ is highly personal.

Doing both requires keeping some level of cash position to take advantage of opportunities.

Page 26: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Low Probability ‘Knife Catch’ at possible 2 wave completion

Higher probability Setup at 5 up, 3 down off of higher degree 2

Trade Entries

Stops are at the bottom of Wave1, tight at .764

Page 27: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Using Timeframes

Start CORE

Take CORE Profit

Add short term Position

Take Profit on short term position

Add short term Position

Add to Core

Page 28: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

My Style for Trading EW Analysis

Seed completed C wave

Add at first 1-2

Add at next degree.

If failure, stop out or wait to add lower.

Page 29: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Enter with divergence

Page 30: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Using Timeframes

Start CORE

Take CORE Profit

Add short term Position

Take Profit on short term position

Add short term Position

Add to Core

Page 31: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Bitcoin (BTCUSD) 1W

Core EntriesCore Stop at $3000

Core Profit Taking

$2.25M

$65-150K

$3200

$5920

Page 32: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Style and Success Rate

Long Term Traders:a) Take bigger heat but stop out

at a loss less. b) Tend to have a less smooth

equity curve over time.c) Less effort / trading

Scalpers:a) Tend to have a smooth equity

curve b) More worthc) Quick profit taking, more stop

losses

Swingers: Hybrid

Page 33: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Bitcoin (BTCUSD) 6H

Core + short term entry

Core + ShortTerm Entry Core Entry

w/Stop below

Short Term Stop

Page 34: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

$6700 Pivot between red

and white

$15000 ivot between red

and white

Page 35: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Additional Links

Videos on Blockchain

https://goo.gl/6ap5Me

https://goo.gl/RvhZU1

More complete Introduction Webinar:

https://goo.gl/SEgRQh

PDF on Security

https://www.elliottwavetrader.net/r/Crypto_Security.pdf

Links to EWT and Ryan’s Youtube Channels:

https://www.youtube.com/channel/UC3rvB1pR6sJlD9esMul1I4A

https://www.youtube.com/channel/UC_LK-Dpvv1M2FkjZhugVOWA?view_as=subscriber

Page 36: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

More Free Analysis and Free Trial?

https://www.elliottwavetrader.net/cryptocurrency/

Twitter: @rwilday

Articles posted to moneyshow.com

Page 37: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Questions?

Page 38: of Crypto Trading The Risk & Rewards - elliottwavetrader.net · The Risk & Rewards of Crypto Trading Ryan Wilday, Elliot Wave Trader

Thank you!


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