I’ve had an interest in anything that can make money for ever since I can remember, I think the world would be a happier place if everyone could earn a living doing something that they are passionate about, that adds value to other people, from where and when it suits them. That’s why I like software, nowadays I can sit at home, in Vietnam helping people to achieve more in hours that suit me. However, there is one downside, if I want to earn money, I do actually have to work.
Ive also had a keen interest in passive income for many years now and looked at many online schemes which promise the world but end up being so much work or deliver very little. I’ve never understood stock markets, they always seemed incredibly complicated and risky and I am very conservative when it comes to money. However, when I first found out about crypto, I figured that it was much cheaper to trade it, since it could be done directly, without going through a broker, it could be done automatically with software and it was cheap to trade and easy to get started.
Given that it has all these hallmarks of something that could provide a decent income without having to do much work, I figured I’d look into it.
In 2016 I tried some manual trading and quickly discovered that the big downside of manual trading was that you needed to be awake 24/7 to watch the markets and make trades. I also found that making profitable trades consistently was incredibly difficult and required many years of learning.
But at the same time I figured that whatever people do to trade successfully based on technical indicators should be reproducible in software and since I reckoned I was a pretty good software guy, I figured that I would be able to make some software that I could use for my own trading and then maybe I could help other people by giving them access to the software.
It’s taken me a few years to reach this point, but finally I believe I have cracked a formula and made it into software which actually makes a profit form the crypto markets with low risk.
One thing to note is that this software runs a strategy and so I wont be able to release it to more that about 200 other people, in order to avoid saturation and influencing the markets, but I figure that’s a decent enough start.
Ways to Make Money from Crypto
There are a few different ways to make money from crypto. You can buy some coins, bitcoin or whatever and then hold onto it and hope the price goes up. This is OK and works for some people but I guess it depends a lot on luck. It also depends on the long term. You put your money in and there is no real way of predicting what the price will be in a year or two. For every one person on the internet who is saying that the price will be x in a years time, there is someone else saying it will be y. So who do you believe, who do you trust? The truth of the matter is that no-one knows, no-one can predict the future based on any factors over that length of time.
This is why I prefer to look to the very near term future, a few minutes, hours or days, because with the technical indicators that are available, it is much more likely that you will be able to make a more accurate prediction of the price going up or down in a few minutes than you will be able to for the price movement in a year.
Another way to make money from crypto is to mine it. Mining is the process of having a computer on the blockchain making the calculations that help the blockchain run. This can get very expensive in terms of initial capital outlay with no guaranteed return. It can also get very expensive in terms of the electricity required to run the mining rig. There are companies that spend millions on mining farms which are located in areas where electricity is cheap and even those that use solar power, so it’s pretty difficult for an individual to get into this game. There are also mining pools where you can get in for a low initial cost, you pay a monthly fee and become part of the pool, some of your computer power is used or some of your rented computer power is used, but as yet I have not come across a pool that offers guaranteed, healthy returns with low risk, so I’m not convinced of this model.
Yet another way to make money from crypto is to lend it – many of the platforms have a function where you can load up some money and the platform will dynamically lend it to other people for making leveraged trades. In this situation the platforms manage the money and liquidate the borrower if ever their losses exceed their ability to pay back the loans, so it’s pretty safe, the downside is that the earnings rate tends to be quite low at between 5-10% per year.
For higher earnings you need to take more risk, but that risk must be managed.
If you are going to trade on the markets directly and manually, then you need to learn quite a lot. Not only do you need to learn about the trading platform itself, but you also need to learn about the indicators, strategies and risk management techniques that professional traders learn. This requires an awful lot of time and some smarts and is probably not for everyone.
Another aspect of the crypto markets is that, unlike traditional stock markets, they run 24/7, so if you make a trade and bedtime comes around, do you leave the trade on overnight and hope the price hasn’t plummeted by morning, or do you take it off at a potential loss or smaller profit that you may have made? This is why it’s best to use a bot or automated trading platform to trade for you, it takes all the emotion and anxiety out of the situation and runs a cool, calculated process to execute your trades for you 24/7, so you can get some sleep and continue doing your day job. It’s true that this is a slightly more risky strategy than lending but less risky than manual trading, so the profits available to manual traders who really know what they are doing can be higher, however this middle ground works well for me and so I expect it will work well for a lot of people. Also, with bots you can manage the level of risk by defining your strategies, which is great for people with some experience. With my software I am aiming at ordinary people, with little to no experience, who dont have the time or inclination to learn all this stuff. In other words I am attempting to use the power of technology to democratize crypto profits for as many people as I can. I believe that should be a winning formula and I believe that if I can create that sort fo value for the average person, then it is perfectly reasonable that I make something from it too.
Having run a social enterprise in Vietnam for several years now, I have seen first hand what systemic discriminatory practices many people live with on a daily basis. Please go ahead and read all about our efforts at http://enablecode.vn if you want to know more about that. However the short of it is that all profits from this trading software will go towards operating and growing that organisation, so by participating in this trading software you will be helping people who live in poverty to overcome that situation and find long term sustainable income.
Many people have very publicly lost plenty of money in cryptocurrency, with scams that abound, to hacking, exchanges going out of business and simply poor trading decisions. I’ve worked hard all my life to make an income and I have a very risk averse philosophy when it comes to what I do with my income.
For this reason I have chosen currently to only trade with Binance, since they have reserved an amount of money to cover against hacks. This has been proven in the past when they paid out money to people who were the subject of hacks on the exchange. They are also the largest exchange in the world currently and so have plenty of liquidity, meaning that they can process trades quickly for retail investors. Finally, they have implemented and continue to actively lead the market in first rate security. With the settings available on their system it means that no-one who trades using my software will ever give control of their funds to me or any other third party.
Using hosted software
If you use hosted software you give your keys over to a third party and you rely on that company being around. It’s not just the investment in money, since you would likely pay monthly, but mostly the investment of time and learning in setting up the system and getting it running. Plus with hosted software, it’s very public and as such it becomes a target for hackers. If you host software on your own machine or on a rented server, no-one else knows about it, so even though it will benefit from security, hackers are unlikely even to know it exists in the first place.
The other area of risk is in the actual trades that are made, so the software I have created manages the amount invested, the coins invested in and the exposure to the markets all automatically. Read more about this in the strategy section of this site.
Yes there is still risk, so at all times you must only ever invest money that you could lose without it causing you a great deal of problems. So for example, don’t invest your pension pot, don’t invest any amount that could see you out of your home or unable to feed your family if you lost it. Then if things to go badly wrong, it will sting, but it wont bankrupt you.
There are lot’s of trading tools out there and having reviewed many of them I have come up with the following principles to ensure as much as possible the profitability, safety and risk mitigation of your assets.
- Never hand over control of your funds to a third party
- Never seek to make a million overnight, a slow and steady gain is safer and more reliable
- Once you set a strategy in motion, stick with it for the long term
- Use a safe strategy
- Use multiple strategies
- Select good coins
- Limit your exposure to things out of your control
- Make it automatic
- If it sounds too good to be true, it probably is
- Manage risk
- Host your own trading software on your machine or a secure cloud environment
- Always use 2FA (two factor authentication)
- Always backup your keys