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How do investors approach cryptocurrencies?
What opportunities and risks come with the high volatility that characterizes this new market?
What's the best way to invest in cryptocurrencies?
Andrea talks about it with Debora Rosciani, a radio journalist from the "Sole 24 Ore" group (the leading financial newspaper in Italy, equivalent to the Wall Street Journal), in this interview.
👉Check it out now!
Hello everybody! Today we are going to be talking about an extremely important topic: how to invest, how people invest, what's their idea of investing, what's their approach, their strategies, and their methods of investing.
We'll do this with the help of the protagonist of a success story that represents a model, a goal, an objective for many people. However, we really need to say that often, the ambition to replicate other people's successes is not enough, because today we're talking about success in a very special field. A field that arouses a lot of curiosity but to which people often approach with illusions, and so they often end up in disappointment.
If you're watching this webinar, you already know who I'm talking about. Today I have the pleasure of speaking with Andrea Unger, a professional trader who's the only one in the world to have won the World Cup Trading Championships in the Futures category 4 times.
Let me introduce him to you. So Andrea, here we are! Welcome!
Thank you, Debora. Hello everyone! Good morning!
So, why are we talking with Andrea today? First things first, Andrea's not here to give us the recipe or the secret to achieve the same results as him. Today Andrea will explain to us, in a simple but very clear and strong way, that investing is about method and patience. It's a matter of being professional.
Contrary to what many people believe, there are no tools that can make you rich. They believe that taking a one-month course in trading - so to trade the markets - is enough to make ends meet and solve their family's budget issues. But trading is an extremely complex thing. It certainly offers many possibilities and many opportunities, but it's also necessary that you're prepared and have the right mindset. It's essential to have strong psychological and emotional defense mechanisms, as well as a method and a lot patience.
There are certain financial news items that can obviously fuel these dreams. We're in the age of cryptocurrencies and Bitcoin now, and many people believe that this is that famous Eldorado you mentioned. Many people confuse this class of investment with those on which we should instead focus when planning our financial life. At Radio 24, they believe that retirement funds and Bitcoin are the same things when it comes to saving for old age. So, these myths really need to be debunked. What do you think?
If they want to grow old quickly, then they can buy Bitcoin! The stress will certainly make them age very fast. Well... Among other things, since I'm constantly updated on the world of trading and investing in general, I see that now there really is a sort of automatic association between anything that's related to the Stock Exchange and cryptocurrencies. This used to happen a lot on Forex too, then Forex went down a bit, and then the time came for binary options... Now, when you talk about trading and investment, you always hear things like, “Sure, I have a crypto portfolio!” The association is automatic. As if it were the only available resource, some sort of miracle, you know!
Cryptocurrencies are an incredibly interesting and innovative project per sé. Probably, we’ve never seen anything like this before. But that's also why they are so unstable. In fact, there are so many question marks on the possible reaction of the financial world, and I mean the conservative and traditional one, the one we have known so far. Sometimes there are closures. Think of China, for example. Or there can be limitations to the products offered by some Exchanges. Sometimes, instead, there are openings, such as the ETF that has just been quoted, and so on. We just don’t know how this world will end up.
We know what happened. And what happened are incredible movements. There are articles about some twin brothers who became millionaires with Bitcoin because they bought them when they were first released and held them so far. But I dare anyone to continue to hold them for such a long time. I mean, I’d like to see an average individual who invests, say, €1,000 in cryptos, and after two weeks, those euros have become €4,000, for example. I dare anyone to keep that position open. Because it's true, they could even become you know €50 million. But I’d like to see who would be so strong and resist the impulse to sell, close that position and take home such a tremendous profit, which is 3 or 4 times the invested capital in a short time.
So, if on the one hand, it’s certainly true that there could be some opportunities, on the other hand, these opportunities are more like winning a bet. They are difficult to catch because, ultimately, no one knows which cryptocurrency will be the next one to skyrocket. Nor do we know what will happen to Bitcoin, Ethereum, and other cryptos over the next few years. Even if we choose to look only at the good side of the coin, we can't forget the other side because this is a highly volatile market, which means that there's a corresponding drop for each spike of the market. And even if high volatility is an interesting aspect in terms of speculation, and entering and exiting positions, and so on… we also risk ending up holding the bag, you know, because when volatility is very high, it becomes harder to manage positions. When movements are so fast and unpredictable, we fall from riches to rags in the blink of an eye, and our dreams end up becoming nightmares.
I can assure you that these things have happened. One may continue to hold the crypto, hoping and recovering from the losses a little bit… I mean, Bitcoin touched $60,000 and then it went down to 30,000, and then it went back to over 60.000 again. So, perhaps those who held it are now convinced that “holding” might be the right thing to do. Well, I do not want to fool anyone, but we cannot know what will happen the next time.
In short, there is a complete lack of control over what could be done, and this lack of control translates into extremely high risk levels. Of course, anyone should be free to invest in cryptocurrencies the way they want. However, it would be wiser to do so by investing only a small part of one's capital. Because every kind of investment (be it in a pension fund, in the stock market, or of course, in cryptocurrencies) should be weighted in this way, not much in terms of how much you're investing. Because I’m not telling you to invest €10,000 in Btp or 10,000 in Bitcoin, absolutely not!
As a general rule of conduct, we should invest in such a way that the fluctuations of each part of the capital are well balanced. Because it's pretty obvious that €10,000 invested in Btp, for example, move slower than, say, €10,000 invested in cryptocurrencies. This means that, in order to have the same movements in the final balance and across all our investments, we should obviously decrease the amount of capital that we invest in more volatile markets and products (which are those that move faster). In other words, I think that by investing less money in the markets that move faster, we can reduce their impact on our capital.
I know it feels good when the market goes up. But when it drops, the feeling is not as nice, and it's the same for me too, and I have a lot of experience in this because I’ve been in the world of finance for over 20 years. And I remember that, at the beginning of my career, the very fact of not understanding what was going on made it so much worse. Those who start with the idea of becoming as rich as Scrooge McDuck will end up like Donald Duck just because certain things didn’t go the way they planned. And that’s when some sad mechanisms start to develop, and sometimes you even become desperate… you hide what happened from your family, and then you look for some help, and while you're doing that, you risk ending up in the hands of some scammer who only wants to take further advantage of your situation.
Yeah, and they even tell you that they can help you recover from your losses. Andrea, this brings us back to that famous theory of behavioral finance that says that the pain of a loss in the Stock Market is actually far greater than the satisfaction you get when you make money. In Bitcoin, I believe that this concept is extremely amplified.
Before we say goodbye, here's a last service announcement. For all the people who'd like to delve deeper into the concepts we have explored during our conversation, you can order Andrea Unger's book, "The Unger Method," which is available on the Unger Academy website. You'll receive the book at your doorstep. It's free, and you only cover the shipping costs: so happy reading, everybody!
Need More Help? Book Your FREE Strategy Session With Our Team Today!
We’ll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.BOOK YOUR FREE STRATEGY SESSION NOW >>
Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.
I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems.
In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.
Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.
Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.