Can crypto trading and investing be taught in one book?

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Cryptocurrency books for novice and non-user users tend to follow a very similar pattern. Almost all of them start with a mandatory “money story” and explain why fiat is, say, “imperfect” – being polite. Then Bitcoin (BTC) was introduced, using a handful of brilliant new technologies that can solve some of these problems.

The books cover mining, wallets, exchanges, Ethereum and smart contracts, altcoins, and decentralized finance – also known as DeFi. Once the authors are sure the reader is satisfied with the idea of ​​buying cryptocurrency, they wrap it up nicely with a (upfront) conclusion and self-confidently recover.

However, even equipped with the desire (and the know-how) to buy their first cryptocurrency, the reader can still feel that there is a barrier to taking the next step. In fact, once the decision to buy is made, a whole new set of questions arise that a savvy crypto-convert will want answered.

How much should I spend? What strategies are open to me? Should I invest or consider trading? How can I maximize the gains while minimizing the risks? Few books delve into this territory enough to give the reader the confidence to enter the marketplace with at least half a clue of what they’re doing.

Break the mold?

Digital Assets: Your Guide to Investing and Trading in the New Crypto Market aims to fill this gap. Written by Jonathan Hobbs, an investment industry veteran turned independent advisor, the book is divided into two parts.

Of course, the first part starts as planned with a cash-bashing; but in all fairness, it would be hard to let that out of a crypto book intended for beginners. And let’s be honest, it never gets old to hear how bad the traditional financial system really is.

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Hobbs then gives an update on Bitcoin, but only to show that it can be trusted, that it is a hedge against inflation and that there is a reason it continues to sell. ‘appreciate in value over the long term.

Ethereum and DeFi are explained in the same way from an investor’s point of view, such as how to make money by staking tokens on lending platforms, trading in derivatives, or providing liquidity from exchange.

The first part is complemented by a few chapters on how the range and accessibility of crypto products has improved considerably, for institutional and retail investors. The development of institutional grade custody solutions and crypto-exposed funds and trusts ultimately opened the floodgates to an increasing amount of institutional and corporate money.

Improvements in the security and functionality of retail exchanges and wallet solutions, along with the rise of DeFi, meet the needs of individual investors like never before, and this brings us to the point where we are being left behind. by most other books. .

Save for a rainy day

Fortunately, this is where Digital assets has only just begun. The second, longer part deals with all the details of trading and investing, starting with how many of its assets should be held in the crypto.

Hobbs explains the importance of a diversified investment portfolio and compares historical returns of various proportions of stocks, and having up to 10% in Bitcoin. Some readers may be dismayed to learn that due to the volatility of crypto, he does not recommend putting too much nest egg in it.

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Digital assets also provides examples showing the effect that rebalancing a portfolio can have on reducing risk and exposure to volatility.

The book continues on crypto investing strategies, covering the ever popular HODLing, the dollar cost average, and the more aggressive value average. The potential results of each are illustrated with examples using actual historical data from different time periods.

And then, it starts with the stuff of big kids …

Trade

If you are an average enthusiast, technical analysis will be confusing. Of course, some may understand what a ‘falling wedge’ is, what it means to ‘switch resistance to support’ and the importance of the ’20 week moving average’.

But you won’t have any idea why these things affect the price of Bitcoin the way they do, and therefore, you won’t be really convinced that you can use them to predict future stocks. Correction: At this point you should have an idea.

Hobbs’ introduction to reading charts, identifying trends, moving averages, trading volume, and Fibonacci retracements makes it seem like technical analysis is something that can actually be done, or learned less over time.

Digital assets goes on to explain how one can profit from the volatility of Bitcoin by trading short or long term on futures contracts. It shows how to read candlestick charts and describes a number of trading styles and their associated trading time frames.

Of course, mitigating risk is just as important as taking profit, and there are techniques for doing this using stop losses, position sizing strategies, and the different types of orders that can be placed on them. scholarships. Hobbs also explains when to use leverage, when to enter and exit a trade, and when to take profit.

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A good investment?

The last sections of Digital assets examine the potential of incorporating altcoins into a crypto wallet, explain the basics of options trading, and give advice on how to tie it all into a personal investment strategy.

The book has an easily accessible style, with plenty of diagrams and real-world examples to illustrate the pros, cons, and potential risks and rewards of each of the different investing and trading methods. Some of the concepts around stop loss and hedging Bitcoin options have taken some reading to fully understand, but they could as well.

If you’re really looking for things to criticize, these are the examples that use Trader A to Trader D to compare different strategies, which is confusing at times. However, it wasn’t half as confusing as when Hobbs chose to get creative with the names of his characters – by the end of the options chapter, it was hard to remember who was who among Lagertha, Ragnar and Uthred.

In conclusion, while it may not offer as much to those who are already professional traders, Digital assets is pretty much essential reading for those who have been tempted to get into trading but never really got their confidence. You might find that you are selling perpetual futures while hedging yourself with a protective call option in no time… and I might see you there.

The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of TBEN.

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