“First, Cindicator is not responsible of your bad trading skills”, Nelson Mandela, June 2018.

As this good old Nelson said, stop blaming others for your losses. Trading is not easy, estimation
say that 90% at least of day traders lose money in a long run. Remember this, IN A LONG RUN!

I spent some time on Reddit and a lot of time on the Cindicator TG group, and I’m concerned by
the fact that people are really quick to point out problems, but just a few accept criticism and even
less try to find solution. I thought it was obvious since the beginning of the project that indicators
won’t get 100% accurate, that’s how market works, it’s unpredictable. All you can do is working hard
to better understand how it works, get a tiny edge on it and end up making profit, or you can also
blame this guy because he told you it was a guaranteed 10x within 3 days. You are the one that lost
this money. Even in crypto, THERE IS NO EASY MONEY.

So yes, if you read carefully you know understand that you will need to work if you want to beat
market, even with Cindicator by your side. Sorry.

My goal in this article is to share a method I currently use in the trader challenge launched by
Cindicator. It’s a systematic method I develop and use because I’m not a professional trader and
don’t have much time to look at all the curves, do technical analysis or fundamental analysis. So it
give tips to reduce the thinking process of taking a trade, defining target and stop losses … It’s not
financial advice, the method do not pretend to be optimal (it is surely far from it) but it fully uses
Cindicator potential, and prevent you from getting broke in the first bear market you will encounter
(trust me, you will encounter other bear markets).

As a former poker player, I see market as a game with incomplete information and use a lot of
skills and analogies between those two fields.

1. Money management

One of the most important and first notion to understand in poker is bankroll management.
“Don’t play the money you can’t lose”, Winston Churchill, 2001. It also means that you need to play
games where you won’t get emotionally hurt if you lose. It also implies to be able to stop playing if
you feel that you are not playing your A-game anymore. In trading, this turns into putting stop losses
on your trades, nobody likes to lose money, and we all want to “get back to profit” but this is exactly
how people get burnt. The permanent pursuit of recover from your loss is pathological, and leads to
addiction.

2. Finding the edge

In a poker game, where all players are decent, the edge you can have over others are in small
details. All players know the rules, but experience and frequencies analysis can lead you to extract
value from you opponent on a long run. Once again, getting an edge doesn’t guarantee to win every
hand, to never get bluffed, or to get full value when you have the nuts. The important is to try to take
the best decision for your long term strategy, not necessary on each particular hand. Trading with
Cindicator is like playing poker with an edge, you won’t get profit on each trade but on a long run,
this edge is going to be profitable. A true understanding of probability is mandatory to avoid getting
disappointed when a 65% indicator doesn’t hit the target. Keep in mind that this will occur 35% of
the time, and this is not negligible. Not getting result oriented or tilted when it didn’t get your way
even if odds were on your side is also qualities that a trader need to have. You can use all the
indicators combined together to get a global sentiment over the whole market. Analysts are still
humans, and even if they do rational and TA basis analysis, they will get biased by the overall market
situation, maybe just a tiny bit, but they will. This is also an edge against a traditional lonely trader,
you have access to the feeling on the market of thousands of people.

3. Define your strategy

Defining your strategy before launching a poker session is mandatory, will you be aggressive,
passive, will you try to play especially against this opponent, etc. … Sticking to your initial strategy
(and assuming it is a good one) will help you to play better, as your decisions won’t be emotionally
driven, but overall profit driven. Before taking a trade you MUST know what you will be doing
depending on different scenarios. Let’s make it clear, seeing an indicator with 80% probability and
instant-market-buying the asset with all your resources and setting a sell order at the indicated
target, is suicidal. It could work, one or two times, but trust me, you will end up bag-holding some
shit and lose a lot of money AND time. A better approach is to look at the asset, see if there is
effectively some growth potential, or if the indicator seems overrated (yes, it happens). If you see a
potential growth, think how much you want to invest in this particular trade.

a. How much I trade

My tip for this one is initially to split your portfolio first in two, one long term, one short
term. We are only interested in the short term one here. Let’s say you have $1000 in you
short term portfolio, split this in 10 (or 5, or whatever you want), this define your upper
threshold. So you won’t take trades with more than $100 involved.

b. Define your stop losses

To define the stop losses, I use the indicator. If I buy the asset for 𝑥 BTC, and the
indicator is 𝑦 %, I put a stop loss at 𝑥 (1 − (𝑦 − 50)) BTC. For example, if the indicator is 65%
and I bought an asset at 0.1BTC, I put a sell order at 0.85BTC. This means that, as I’m
confident into indicators, I accept to potentially loose more on high probability indicators.
You can add other stop losses between buy price and this stop loss, for example at
(𝑦−50)
𝑥 (1 − 2
) or whatever you like.

c. Define your targets

A target is given by Cindicator, but a non-negligible portion of indicators will not get
verified not because the price didn’t go up but because it just doesn’t hit the target. So I
decided to add some profit taking target all the way up to the indicator target. At that point I
do not use any formulas to set it, just divide the interval between actual price and target in 2,
3, etc. You can choose for example to set a sell order at the target price times the indicator,
it would seem pretty logical to do so. Once again it’s up to you and your personal risk
aversion.

All those tips are “automatic”, you don’t need to do deep research or spend a lot of time looking
for the perfect trade. This is the main point, a systematic way of placing orders for people that don’t
have the time needed to trade in normal life. There is your edge.
 4. Diverging indicators

Sometimes you receive an indicator saying that an asset has an over 50% probability to go up,
and the next day, another indicator saying the same asset has an over 50% probability of going down.
This is what I call diverging indicators. Assuming you bought in the asset based on the first indicator, I
recommend selling off half of your position at a reasonable price and setting a buy order with that
money at the second indicator price. This is called risk hedging. As it does not occurs really often, you
can just decide selling your entire stack or holding it, sometimes you need to trust in yourself.

5. Stick to the plan

“Variance is a bitch”, Donald Trump, 1998. It’s surprising but on this one, Trump is right.
Sometimes in poker, variance grabs you, hit you hard in the stomach and let you there, lying on the
ground. You might have played it perfectly, variance doesn’t care. But with time, you learn how to
talk to variance, you manage to tame it, and finally live with it. But this is on a long run, once again.
Trading works the same way, you can get rekt by five 75% indicators in a row (and it will happen), but
still, if the plan is good, stick to it, don’t try to fight unarmed versus the market.

6. Cindicator is not your mother

Cindicator designed a product that you can use or not. No one forced you to buy it; no one will
tell you when to sell it. Raging against wrong indicators is like raging against the dealer at a poker
table because he keeps dealing you bad cards. That won’t get things better. You are free to stand up
and leave the table. Or you can try to minimize your losses by sticking to a clear strategy that can
beat a bad run. Holding a coin doesn’t make you an investor, this is how utility token works.

7. Care of crowd “inertia”

If you carefully follow the indicators, especially S/R, you can see that Crowd seems to have
inertia. The following picture shows an analysis I have done some weeks ago (yellow and blue boxes
give the S/R over the period; colors are just here to have a clearer view):
 On the picture you can see that when market started to fall, it takes some time for the analysts
to adapt to the new macro-trend. It looks like it was predicted the past, which is a bit useless, I give
you that. But my interpretation is crowd inertia. Analysts, as a whole, took some time to accept the
bear market, but once they did, accuracy was pretty awesome. I did not find the time to do this
exercise on more recent data, feel free to do so and share it. So far I don’t recommend trading
directly S/R signal, I use it more as a trend indicator, like total market cap indicators. If you want to
try some scalping using these indicators, I personally trust supports more than resistances, use with
caution.

8. Cindicator is still a young boy #genderassumption

Token sale takes place 6 months ago, products are young, and it can’t be perfect on the first hit.
2018 road map is ambitious and team delivers all they promised on time. Not a lot of project can say
so. Plus, exciting new indicators based on neural network will be on track soon, hopefully increasing
overall accuracy. How many of your shit-coin bags are delivering indicators daily to help you beat the
market? Not a lot I guess. So give Cindicator some time. Like every new technology it will get better
over time and the use of it also.

Everything said in this article is a personal point of view, and a personal method I use to try to
beat the market. So far it has been ok; around 4% benefit a month. That’s not awesome as some
crypto traders manage to get 20+% a month but for a systematic method that requires not particular
skills or research, it’s enough for me. It’s now up to you to use it or not, improve what you think can
be improved (I’m interested in your opinion). To conclude, Cindicator provides a great help that let
you free to create your own trading strategies, but like every powerful tool, you need to understand
how to use it to avoid to get harmed. “Future is bright for Cindicator”, Mohandas Karamchand
Gandhi, 2007.

Erwan Létard