Adrian Reid (YouTuber) answers whether stock traders should trade cryptocurrencies. He says cryptos are tradable if approached systematically, with backtested strategies, low leverage, and strict risk management, but warns against allocating all capital to crypto due to extreme volatility and high internal correlation across coins. He emphasizes diversification across stocks, property, gold and jurisdictions and criticizes inexperienced "cowboy" traders.
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My answer, possibly, somewhat predictably, is if you can trade cryptocurrencies systematically and profitably, sure, why not? I would not want to allocate 100% of my capital to a very young and wild market like cryptos. I do trade cryptos. I do do it systematically. It's not my main thing. Most of my money is in stocks, but I have a crypto system which I quite like. It's a bit. It's new relative to my stock trading system, so I'm sort of proving it. But you can trade those markets systematically. Just don't bet your life savings on it, because the corrections, the sudden collapses, are very extreme compared to the more established and better regulated markets. Just this week, we've seen a very sharp collapse in the price of a lot of altcoins and Bitcoin even, and then it rallied back and it's just very. It's wild. So if you want to trade, crypto is good. Do it systematically. Don't try and trade from. From the cuff. Don't try and kind of look at the charts and pick your. Pick your entry and exit points discretionarily because the moves are so big and so fast, your emotion is going to get the better of you and you're going to lose. It's just like any other market. You need a proven edge in order to make money, and you need to take that edge and you need to apply it with solid risk management. So make sure if you're wrong on a trade, you don't lose too much. And remember that cryptos are.
It's a very concentrated market. There's a lot of internal correlation, you know. Yeah, different coins go up and down a little bit, but if the market collapses, they all, mostly all collapse. So don't fool yourself into thinking, I've got 50 different coins in my portfolio, I'm diversified, I'll be okay. You could still have a massive drawdown. So crypto trading could be part of your portfolio, not all of your portfolio. I have stocks, I have property, I have gold. I have different investments in different countries. I think diversification is important. I'm not silly enough to think that just doing one thing my whole life is going to secure my family's financial future. This new market has huge opportunities, and you can make a lot of money by trading it, but you can also lose a lot of money very, very quickly. So don't just rush in thinking crypto is the savior of your financial future. It's not. It might be a part of your overall plan. If you trade it Well.
I see a lot of cowboys in that market, trading with high leverage, trading.
Using unproven systems without backtesting it. And frankly, I think it's suicide, financial suicide. So you can get the data, you can back test it, make sure your strategies work, apply it with low risk, use low leverage. And I think it's a market that's tradable. That's my, that's my position.
I will always have the majority of my assets in more established, more regulated markets, though, because I think that's, that's sound financial planning. You know, I can't give financial advice, but that's, that would be my approach.
