How to Make Your First $100k with Devchart
Market Meditations | July 7, 2021
1️⃣ How Devchart Sold the Top
For this bull market, Devchart attributes selling the top to a combination of luck and recognizing that the market was becoming overextended. He mentions how he noticed that when price would come up to resistance at, for example $60k, it would soon retrace only to break the resistance up to $63k, for example, before it retraced again all the way back to $48k. After seeing these wicks along hyper bullish Crypto Twitter sentiment which showed many were confident on the supercycle along with altcoins pumping parabolically, it made him “slightly uncomfortable.” As soon as it dropped below $55k, he became confident there was a drop coming and he decided to take profit on about 80% of his holdings.
2️⃣ Spotting a Change in Sentiment
Devchart mentions how he is a “pessimistic trader” which means he looks at the worst case scenario first. He mentions how the sentiment in 2021 reminded him of what it looked like in February and March of 2018, when big money was saying that Bitcoin would trade at $40k by June and would eventually go to $100k or $200k by the end of 2018. Anybody who was around in 2018 remembers that it was this time period that marked the cycle top. This time around, Devchart mentions how it seemed retail traders expected the resistance to break whilst large firms were being publically vocal about a supercycle.
3️⃣ How Devchart Made His First $100K
“The first $100k that I made in the market was due to pure luck. It was also due to me being early.” Devchart joined the crypto space in early 2017 and initially began buying Bitcoin and Ethereum. Around September of 2017, however, he started buying a variety of altcoins that were the talk of the town on Crypto Facebook. Due to Bitcoin, Ethereum, and of course his portfolio of altcoins pumping parabolically soon thereafter, his profits surged past $100k. He admits that during this period it’s easy to feel like “you’re a genius” and that the next step is hitting the seven figure mark. What Devchart underplays, however, is that he managed to secure and keep profits before the parabolic pump took a harsh turn to the downside.
By the end of 2018, Devchart began trading (rather than buying and holding) with small amounts. It took him about 7 months to grow “a few thousand dollars” into $100k trading altcoins on spot, not leverage. He has tested leverage and decided that, although he could hypothetically have grown the account to $100k+ in a few weeks, the slow process actually helped him understand a few things.
4️⃣ A Learning Experience
Devchart explains how one of the most underrated lessons is the “power of compounding profits.” He mentions how he believes that if most people truly understood the power of compounding profits, they wouldn’t bother with 50x or 100x leverage. Another key lesson Devchart learned was “learning how to lose small.” The crypto markets afford traders and investors the opportunity to make life changing amounts of money. The crypto markets also, however, are notorious for taking this life-changing money away if you’re not aware of how to keep your gains. Devchart explains how “losing should not affect your overall trading” because topics like invalidation zones and stop losses, for example, allow you to continuously grow your portfolio without suffering massive drawdowns.
5️⃣ Strategies for Anyone to Make $100k
If Devchart had to start from $0 and make $100k as quickly as possible, how would he do so? If you’re a new investor, he does not recommend trying to make your first $100k using leverage. For new traders and investors who are willing to exercise their patience and want to truly build wealth not just today but for the long term, a great way of making your first $100k is by trading altcoins. Trying to grow $1k to $100k using only spot is challenging, but by going through this process you will learn things about yourself and your trading systems that will build a complete foundation to help you survive in this game long term.
6️⃣ Devchart’s Advice to New Traders
Although many people may consider this piece of advice controversial, Devchart explains how people should rethink the idea of HODL. When you think of the word HODL, people will always default to the example “If you bought BTC at X price during Y time, you would still be in profit today.” What people fail to realize however is that the majority of investors on Twitter, TikTok, Reddit, etc, are not buying Bitcoin or Ethereum. They are looking for the next 100x or 1000x altcoin, especially when you have a small portfolio or are constantly surrounded by stories of coin X or coin Y going parabolic. Everyone is looking for that magic coin, which leads new people to buy obscure low cap coins. During a bull market this can be very profitable. When markets downtrend, however, it is these coins that will crash 90 to 99% first. So what’s his advice? HODLing is fine, but learn to understand trends and always set a profit target and invalidation point.
Many concepts and terms were referenced in this conversation with Kaleo. Here are further resources for those who want to learn more about: