#85 Mastering Crypto Trading: Michael Ionita on Automation and Risk Management

Yasi Zhang: Welcome to Fast Track Podcast, your go-to source for insightful conversations on personal finance, entrepreneurship, and personal development. I’m your host Yasi, and today we have a very special guest, Michael Ionita. Michael is the founder and CTO of Autotrading dot VIP, a platform that teaches retail investors how to automate crypto trading with algorithms using Signum, their trade automation tool, and strategies supported by a vibrant community with over more than 11 years of leadership experience. Michael is passionate about automation and improving tag team efficiency, having worked at MobFox, Waz. io, and DappRadar. In this episode, we’re going to cover some of the most important topics for anyone involved in or considering investing in cryptos.

We will discuss the do’s and don’ts that every investor should know, whether it’s really possible to make extraordinary returns with crypto, and most importantly, how to manage the risks that come with this volatile market. Whether you are a seasoned trader investor or just starting out, you won’t want to miss the insights and strategies Michael shares in this episode.

So get ready to take some notes. This is going to be a valuable conversation.

Welcome to fast track podcast, Michael.

Michael Ionita: Hey Yasi, thank you for having me, happy to be here.

Yasi Zhang: Yeah, I’m very excited that you can spare some time for us to have this conversation with you, for the audience to hear from your experiences, how they can learn or how they can even improve their trading techniques.

Let’s start with the first question. Could you tell us a little bit about yourself, like how did you get started in crypto trading?

Michael Ionita: Yeah, I got started by losing money. Uh, like, so I started, uh, 2013 with Bitcoin, bought, uh, two Bitcoin for 560 euros around ish. But if you look at the chart, mate, if you look at the chart 2013, when that was, it was almost at the top of the move because of course it was, right?

Of course it was. And, uh, you know, I held it in my Coinbase account. I think it was Coinbase then not in the very beginning, but later it was Coinbase because in the beginning I had to buy it P2P. Like that was crazy. Anyway. Um, so I was very early, but then what happened, I mean, at some point it went down.

I mean, there was a bear market. I didn’t even know what that is. Right. And so I sold it for, uh, for not the, not the greatest price, you know, so I ended up not, uh, not being happy about this. Right. And then, you know, stuff happened in the sense that I was very busy. working, building companies, you know, building tech teams, products, all this stuff.

I didn’t have time to really get into the charts and understand the whole thing. And I just, you know, check box and do other stuff. Um, it went well, you know, I had a good time, but then when I looked back 2017, we went to 20K and I was like, wait a minute, I bought this at 560, but now it went to 20K, like what the hell?

So, yeah. And I, you know, I got kind of. upset with myself that I didn’t do better, you know? So I started figuring out a lot of stuff just because of that, right? Cause I kind of figured out like, it could have been easier, I don’t know. And after I figured out what I had to figure out, which took a long time, as you can see, then, you know, I came to the conclusion that, You know, a lot of stuff like manual trading is useless, but it’s better to use strategies to automate, but it took a couple of years, but, you know, ultimately I fully believe in this and this, you know, that’s my journey.

I could have done faster, but it is what it is. And, uh, now I’m very happy that I have what I have, the knowledge and the approach. And, and it gave me a lot of knowledge also about risk management and all the good stuff that you need. So that’s kind of the intro. Yeah.

Yasi Zhang: You summarize it in several sentences, but, uh, I’m sure you really spent a lot of time and energy on this journey, learning all this stuff.

So what, what is your first experience with the trading? Like you mentioned, you bought the Bitcoin that you sold it, but in terms of like the actual trading, what is your first experience and what attracted you to crypto trading?

Michael Ionita: Actual trading. I mean, Um, I didn’t really, I never really did like proper like hardcore trading because I, you know, an engineer, I don’t really like to do things manually.

I always come with, you know, every engineer wants to automate everything first time, you know, like every engineer wants to, there was this joke, wants to build a database. Um, to build a time tracking tool and to automate everything they have to do twice, you know, so the third time is like, wait a minute, I build a software for this, right?

And that’s me, right? So I thought like, why would I even trade manually if I can find some method to buy and sell? Because you have the cycles, you figure it out. It works in crypto, no? It doesn’t work necessarily on everything else. But yeah. And crypto have the cycles and say, wait a minute, there has to be a way to figure out roughly where the bottom is and roughly where it’s over, you know?

So of course not that easy, but it’s also not impossible, right? So, you know, that’s what I did. And I automated it, like, but I never really traded manually back and forth. There was a short time in, um, the last bull market, 2021, something like this. Or maybe 22. I’m not sure when there was the second pump, but.

uh, when I, when I tried some shorting and just to get, you know, see how it works, but not because I really like it. And I figured out it’s, yeah, not really interesting risk reward doesn’t really pay off. And so then, yeah, so I, I kind of, I never really traded. I will, and I’m not a guy who sits in the front of the machine looking at the charts, figuring out levels.

It’s not really necessary, you know, like, and I can make more money without doing that, which. It sounds weird, but it is, right? And so also there is another thing that you need to learn, like Trading more loses more like, so, uh, especially if you’re not a professional, this is super true. You know, if you’re professional, maybe it works fine because you have a good risk reward and, and you have, um, you know, you have, you’re okay with losing trades, you know, but as a normal retail person, losing trades is, you know, Very bad, no?

Emotionally problem. And then you have all of these counter emotions, like counter trading, making it all back in the next trade, taking more risk, leveraging it and blah. And all of that is, is not good, right? So like, and so I want to avoid all of that and I want to have more time in my life. So I have automated the whole thing.

You know, it’s, uh, for me, it’s okay. And even if I make less money than I potentially could make, That’s fine because I, I can, I have so much more time in my life to do YouTube videos, build a product, travel, you know, stuff like this. So it’s a, it’s a, it’s a trade off, you know, uh, for me it’s a good one.

Yeah.

Yasi Zhang: And, um, from your personal experiences and, uh, you know, the knowledge you gained from learning it and seeing other people around you, What would you say are the common mistakes, beginners make?

Michael Ionita: Beginners? I think beginners, they take too much risk.

I think that summarizes it quite well, but what does it mean? You know, you can zoom into this and you can say like, there is a lot of, there are a lot of people who are motivated by, let’s say the industry. I will mention a couple of, uh, participants of that, but, uh, the industry to trade often and with leverage, like it’s a, it’s simply a thing because you need to understand how the market or the industry works, like the industry works like this.

There are exchanges and exchanges make money when you trade. If you don’t trade it, don’t make money. Like it’s very simple. So what would an exchange love you to do? What do you think? They would love you to trade a lot. Actually, they would even love you to automate. Trading a lot. That would be awesome.

Like, so let’s give people bots that trade ultra often per day. And also let’s have them put leverage. Let’s have a checkbox or like a slider, you know, where you can slide very easily, make it as easy as possible to, to, to take two, three, five X, 10 X leverage and trade a lot per day. Let’s go. Right. And so that is what, if you actually open your eyes, that is what most of the industry is trying to tell you that this is the way, right.

This is the way to do it. Um, And so you go to YouTube, you find a lot of people who tell you, here, this is the resistance line, you can short it like this, you can this, but if you leverage, you can make more money, blah. Here’s my link, you get this position airdrop. So you got, you go directly to futures, basically.

Like, nobody makes advertising for spot account. Nobody. Okay. I am the only guy on the internet, I swear, that says, Just spot long only. That’s it. Right. Really? I’m the only guy because it’s boring. I understand. But you know, like if you have more money, you don’t want to take the risk. So first of all, the exchanges motivate people to do that, right?

So the exchanges then go to influencers and say, Hey, can you please promote our futures products? Because that’s how we make the money, right? Okay. So they promote that because then they make the money. Now here’s the fun fact I talked to, I wouldn’t say the name but to a couple of big exchanges. And they told me that you know, they are losing a lot of their user base regularly because they just get liquidated, you know, they, they disappear from the map.

Okay. So they come in, they’re super motivated, they go leverage, they lose all their money and they stop trading. Okay. So they need the influencers to get fresh people in because otherwise they would like, Otherwise, only the top 10 percent will remain and they will trade against each other. And that’s it.

Right. And that the competition will be massive because those people will be the best people around, you know. Right. And that’s exactly what’s happening. But people don’t understand. Right. They don’t know the game they’re actually playing. Right. The play, the game they’re playing is quite ugly. You know, like basically they bring fresh meat to lose their money.

Then that fresh meat lose money. And then you have another fresh meat, right? And everyone is saying, Oh, retail is not here. Oh my God. Uh, when retail comes, it will pump. But what would they actually mean? Right. The, what they actually mean is, Hey, retail is so stupid. They will come at the top and I can finally sell and they can do whatever they want, which meaning they will lose money.

So if you’re really honest about all of that, it’s pretty bad. Okay. Like, yeah, that’s why I do my YouTube channel because I figured this out and I understand. that I cannot simply just rip people off by, you know, auto trading. So I want to also give some people the chance to understand the game. So that’s why I share a lot of knowledge about exactly this on my YouTube channel, but not everyone will look at it, whatever.

But whoever’s looking, they have the chance to break out of this narrative. And once I understood this, it was, it’s pretty bad. Okay. Because that’s what it is. It was always like this. It’s also in the stock market, everywhere is the same. It’s just that it’s a market, you know, and people who have more information and know how the market works will obviously win, you know?

Okay. There is another one player in the market, which is the market maker, which works together with the exchange. So The exchange gets all the orders, but the exchange shall never do their own market making, meaning matching the orders with each other, because that is, um, they could mess around, they could front run, they could do a lot of things.

So there is regulations. Well, if they stick to it, of course, I mean, there are smaller exchanges who don’t really care, but if they stick to the regulation, They have to use third party market makers that play for themselves and not for the exchange. And that is better because then otherwise the exchange has all the cards and can play the cards however they like.

And they could, um, they could, um, you know, create large wicks and all this crazy stuff and people get liquidated left and right. Um, and, and so the exchange makes even more money. So that’s not good, right? So too much power in one hand is not good. That’s another part of the market that nobody knows about.

Like if I say nobody, I mean, 0. 1 percent of people on this planet, not even. Yeah. Um, so the market maker is important. If you, if you trade on the big ones, Like Kraken, Coinbase, Bybit, Binance, Kucoin, big ones. They have third party market makers. They have more than one. That’s good, right? So that’s nice because they compete and that’s okay.

But if you go to exchanges like Maxi and shit like this, I’m sorry to say, but they do their own market making, you’re going to get. destroyed, like trading there, complete waste of time. Like you could just as well throw your money into the fire, you know? Um, but again, people don’t know, like they only look at, Oh, Maxi has zero fees.

Yeah, mate, they have zero fees because they screw you over at every click. Okay. You don’t know, even know how they do it, but they do it. Okay. Like. Sorry, Maxi, but that’s what it is. Um, so there are other exchanges, similar things. So the, if you pay zero fees, you are paying with other things. And yeah, so you see what I mean?

Like, it’s, uh, the more you figure this out, the more you learn, in my opinion, you learn that trading on the, on the shorter term is useless because you have a lot of competition market makers, all this high frequency stuff. They only want me to trade more, but it’s useless, right? So I want to trade less. I do exactly the opposite of what they want me to do.

And that leads me to have less competition, less fees, uh, and less, less basically, uh, losses. Right. So then over time I make more money. Right. But it’s boring. Right. You have to wait it sometimes, you know, sometimes nothing’s happening, you know, but it works. Right. So this is something that I teach and I, I pre I preach.

Yeah. But it’s very hard for most people to understand, which is okay, by the way, because again, going back to what I said before, Uh, there will always be people who lose money and this will never change because the market is always like that. Right. So let’s say some aliens from the, you know, they start trading, they have the best technology on the planet.

I will start losing money against them. Right. Because you know, the, the, the, just it’s shifting towards even stronger players, right. I become, um, Part of the 95 percent who loses, right. Instead of, or 90 percent instead of being top 10. So, you know, so you always have to stay up to date and see what’s, you know, what the market is doing, adding coins, removing coins from your portfolio, depending on risk reward.

There are a couple of formulas, not that complicated to do, but, um, but, but the game is very complicated and whoever is not, if you don’t know all of that, you shouldn’t even be in the game, in my opinion, but. Of course, people want to make money quickly. So they love crypto.

Yasi Zhang: Yeah. And you talk a lot about, uh, you know, the, you automate trading and then you do what works for you.

So in terms of trading strategies, um, can you tell us what What kind of strategy that worked for you?

Michael Ionita: Yeah. I mean, I, you know, because I said what I said, I have to go the, you know, the route of trading less. And how do you, what does that mean? You know, there are different types of strategies. When you go bottom up, you have all the scalping, no, sorry.

You have the high frequency, uh, you have the scalping, you have the swing trading, you have the momentum trading, and then you have the trend following. Right. And, and then you have people who just hold it for, I don’t know, however long. Yeah. But, um, so the, the, the trend following is kind of one of the slowest versions of this, but it’s not, super slow because it still can buy and sell in a couple of months or a year, depending on how the trend is going.

So if there is a bull market for one year, they will be invested for one year. Right. But if, but if the trend is breaking down in a couple of months, that’s fine also. Right. Then we go out. Um, and so it has the possibility to be in, in a trade or in an open position for a long time. which again is, is why you should use the spot account in that case, because it doesn’t cost you fees, right?

To keep that position open. Um, anyway, so that’s a side note. Um, and so I do trend following because trend following for me is, uh, is very powerful simply because if there is a strong trend, it’s also micro psychology, right? You have a strong trend. Everyone else will FOMO in, right? The news will play in your favor, everything, right?

So the trend, if it’s strong, you can ride it like a wave, you know? And then when the wave is breaking down, you have to get out. And you get out at the time where everyone else thinks it can never go down. Right. Like that, that’s, and that’s why it’s so hard. That’s why I automate it because I wouldn’t sell it myself if I would have to click the button myself.

It’s very hard to log in and say, okay, I want to sell this now. So I, I rather automate it. So I wake up, it’s sold, you know, and I just, I’m fine with that. Right. And so. Often it’s correct, sometimes not, but it’s a probability game. Um, and the probability is more often than not in my favor, you know? So it’s, it’s good.

Oh, as well, if you, of course, if you build a portfolio that is risk adjusted, where you don’t have just one coin there, or you don’t put like Huge amounts in just one coin. Then even if sometimes one of those trends fail or they’re not detected properly, it’s not the end of the world, right? That’s how you do it.

No, in my opinion. Um, and so that’s, that, that’s what makes me happy. So if I have a coin that like Solana, for example, that goes bananas, but then there is another coin I missed out on, or it’s not yet invested, but you know, like I’m fine. Yeah, it’s all good. Um, and that’s, yeah. important because actually you’re playing always against yourself and the market.

So you have emotions. So you have to play against that, right? You have formal, all this stuff, or you have fear also. Like if you, some people have fear when they made a hundred percent profit, they are, they have the fear that it will crash and they will lose all the profit. So they will sell early. That’s no good, because, you know, why would you sell your winners early?

You know, if there is still a strong trend, you should stay in there. But how do you know? Yeah, you need some strategy, right? Um, or people have fear on the bottom, right? When there is a buy signal after some catastrophic event. If you look at the chart, Bitcoin end of 20, middle of 2022, there was FTX crash, something like that.

And then beginning January, 2023, Massive pump. Okay. Yeah. One of my strategies bought almost the bottom, not the bottom, obviously, but almost and buying manually that was there would have been impossible. Like I’m telling you, everyone said Bitcoin is going to 10k and it’s going to be bad and everything.

And buying there it’s very hard. So you have either fear Right on the bottom. I don’t buy now. It’s stupid, but then it was a good idea or I don’t sell now Because i’m greedy on the top. That’s the second thing. I want to say right at the top Everyone is greedy. They want to make more and the reason why they’re they have to be greedy is because they they bought the top Okay, so they they must they now have to wait for more upside, right?

But it doesn’t come, right? So if you buy almost the top, then you can’t sell quickly afterwards, because it will be weird, you know? But if you have a strategy, and it tells you to get out, well, Then it’s better to do that, right? Cause then you protect from minus 73 percent what Bitcoin had last bear market.

You see, like there is a lot of details to know and I’m not, uh, what I’m doing here in this podcast is not like a, you know, an education program because that would take forever, but so I’m, I’m jumping around just to tell you there is a lot to know, yes, but if you really want to learn about this stuff, then Google it, YouTube it, check my YouTube channel and all this stuff, but it’s, it’s, it takes more than a day, right?

To figure this stuff out and to actually also. And internalize. Internalize it and to really believe if it’s true or not for you, right? Because some people say, nah, this is not true, blah. But then once you actually figured it out, then you can’t, you can’t trade like you traded before. So, yeah. One last thing I wanna say.

I have this telegram. And we have the 3000 people, whatever. And sometimes new people come in. Right. And they say, Hey, I saw this cool strategy that you’re sharing for free on YouTube. I want access. Okay. Give access. Cool. And then the next question is, can this work on the five minute chart? And I already know this person will never make money ever.

Okay. Just the question alone. Right. So, I mean, we try to convert this person obviously, but like, Already, the question alone, you already know these people, they have the wrong mindset, you know. If you want to trade on a five minute chart, you’re never gonna make money ever in your life. Okay, I’m just saying, right?

Like, unless you have huge amounts of money already to build an automatically trading system that can trade in milliseconds against other guys. Yes, have fun, then cool. But do you have it? Most likely not. Right. So otherwise you wouldn’t be with my freaking telegram. You would do other things. Right. So like if people ask me, can I, can I short, can I five minutes, 15 minute chat, this and that, can I make money monthly?

I already know they’re not going to make it. Right. So people say there are no stupid questions. Yeah, maybe not, but there are questions that tell me if you will be profitable or not. Just the question will already tells me that. So I will then, yeah. and also the people in the Telegram group and the moderators that I have there, they will try to convince the person that it’s a bad idea, right?

Because we want to help, okay? But sometimes we don’t manage, right? So if you come to my Telegram and we push back against some stuff, we do it because we want to help you, okay? Right. Keep in mind.

Yasi Zhang: Yeah. And you mentioned several times that, okay, you automate it so that you will not get your personal emotions into it, doing stupid stuff.

Um, I think by listening to this conversation, a lot of people would have this question that how can you have faith into the strategy that you, you program yourself? Like what are the fundamental principles that you believe in?

Michael Ionita: Yeah, that’s a good question. I mean, it’s, uh, it’s simple, it’s simple to answer.

Actually, once you have the, um, the strategy in your, like we, we use trading view. Yeah. So imagine trading view, imagine buy and sell signals on the chart. Yeah. And then imagine, uh, testing this strategy on hundreds of, of different assets. Yeah. without changing any parameters from the strategy. So the same strategy, but just applying it on, on, on, on hundreds of, of coins, right?

Cause it has to be from the same asset class, right? Crypto. And if. In total, you look at the, at the aggregated numbers, you run some mathematics over on top of those collected numbers. And then you figure out, Hey, actually in total, this strategy makes money on 90 percent of these coins and has a reasonable drawdown.

Yeah. And in, in many cases, it’s better than buying whole strategy, which also has huge drawdown by the way. Um, then you can calculate relatively easily. So it’s not complicated mathematics, right? If the strategy, is good or bad, right? So it’s called actually a robust strategy because if you have a robust strategy, it means that it can sustain not only, uh, historic price movements, but also future price movements, right?

Because if it’s a robust strategy, it’s not overfitted to just, uh, you know, what happened in the past, but can also have the future. And because you don’t see the future, You cannot test on the future, but you can at least test on, on hundreds of assets without changing the parameters of the strategy, right?

It has to do it itself. It has to figure it out, right? And if it does work and, uh, and delivers, uh, good numbers, or, I mean, when I say good numbers, of course, I tested a lot of strategies against each other. Right? And I picked the best one, right? And there’s no perfect strategy, okay? Sometimes it misses out on something, sometimes, you know, it goes out earlier, it goes back in.

But it doesn’t matter, right? What matters is Can it handle hundreds of assets? Yes. Does it have a low drawdown? Perfect. Um, then I can decide based on these numbers, how much money I put in each of these assets because I have the numbers, right? I can decide how much risk is it based on the risk and the reward.

I can decide how much of my personal funds I put in there. So I have a risk adjusted portfolio. So all of these steps. And a couple more. They lead to having the highest chances of success. And this is also how I talk about it in YouTube. I never say you will make money. I say you have high chances of success.

Because if you every step of the way, every decision you make, you make sure that that decision has the best probabilities. And then you sum it up. Well, you will make money. the chances are high, right? And that’s what it’s all about, right? It’s not all, it’s not about being part of every move or being part of, uh, or, or selling the top buying the bottom or any of that.

Um, or, you know, if you miss out on some crazy new coin, that’s fine. Okay. Because then you didn’t lose money either. Right? So the worst case scenario is if you put money in and it goes down, that’s the worst case scenario. Cause you actually lose actual dollars. Right. But if you, if you miss out on a coin, then you don’t lose anything.

Yes. Opportunity costs, but Yeah, it’s not the end of the world. Like you can still buy something else. So, right. So if you, once you learn this mentality, then you understand that testing a strategy on hundreds of coins, playing the probability game, uh, automating it. So then if you Why I’m saying automation now is because I kind of remembered I have a lot of coins in my portfolio and I couldn’t possibly manage them manually.

It’s too much work. Like I can’t just all the time check every coin, you know, figure out, should I buy more sell or whatever. But if I have an automation like this with a strategy that is robust, that has been tested on a lot of, uh, coins to, and picked out. from a lot of strategies as one of the best strategies, well, then I can automate it and it will just sell for me, right?

So then I have more confidence to play more coins, right? To be part of more activity on the market. And so that gives me another higher chance of success to actually, to have a coin in my portfolio that goes bananas, because I can play more coins at the same time. You know what I mean? So it gives so many benefits, right?

If you really think about it. Um, It’s, uh, in my opinion, is the best approach, right? That’s why I do it. Um, and yeah, this is how I play it for myself. And also people who are part of my program, they do similar things.

Yasi Zhang: You know, in the market, there are so many trading bots, right? Um, so people might ask why yours, why your trading strategy is better.

Michael Ionita: Yeah, I mean, it’s not, I wouldn’t say it’s better, like, it’s just, it’s different, you know, so I, whenever I talk to somebody that never saw this, or at least they are interested in this, I say, look at this chart, look at the equity curve that I, that the strategy produced, and you can see how boring the strategy is because, you know, so I start by saying how boring it is.

And not by how much money it makes. Right. And so I say, Hey, look how boring this is. It doesn’t do anything for six months, three months. You can see, right. The portfolio, when you see the equity line, uh, which I built into my strategies, then you can see that sometimes it’s not doing anything. It’s just waiting for the better opportunity in the market to do, to enter, you know?

And, and so like, I would say it’s not, yeah, Like it has, it’s very appealing to certain people who, who have more funds, who want to reduce the risk, who don’t want to play every small coin, but want to just increase the chances of overall growing their portfolio. Usually it’s people that understand that, um, the balance of risk reward is very important, right?

So like, Yeah. I’d say those strategies have higher chances of success because of many aspects, but it also has to fit your lifestyle and also your expectations. Right. So if you expect to make money monthly, it’s not going to work for you. Right. It’s not just, it’s just not the right thing. But if you want to, if you want to.

make, if you want to, let’s say you want to keep make and keep the most money after each bull market, that is very good approach. This one that I have, because everyone makes money in the bull market, but also almost everyone loses it again on the way down. Okay. So yeah, like the thing is. that, uh, so to summarize why I think what I do is superior is because it’s trend following, which has less competition because it’s boring.

So more people, most people will never consider doing this. Most hedge funds and, and investment banks, they cannot run this system that I run. So there are not my competitors because they have to deliver quarterly results to their customers. If they’re, so if my strategy doesn’t trade for three months, for me, it’s fine.

Right. But for, for this institutions, I just mentioned, they cannot do this. They have to trade more. So, so they will go on lower timeframes. So why would I go? to lower timeframes, because then I fight against them. I don’t want to fight against them. They have better machines. They have better smart people, mathematicians there, you know?

So if you really think about it, it’s like boxing, you know, you don’t want to go into the hard, the hardest fight ever. You know, why would you do that? Go into an easy fight. You can win because it’s about making money, right? So if I can fight, you know, almost nobody because there is nobody, or if I fight, then it’s easy to win, right?

Then that’s what I want to play, right? I mean, to be honest, yeah. And so the lower timeframes, do you have all the people competing? And that’s why I think the, the strategies and the approach, it’s just better because of the probabilities of, of winning, right? Cause it eliminates a lot of this noise. Um, on top of that automation is killer, right?

Because it’s just, it allows you to, like I said, to cover a lot of the market without, you know, being afraid that. Some coin will go to zero. In fact, actually, um, I just reminded myself that Luna went to zero. And so I have this, um, this thing where when somebody talks to me and I share my screen, I, I use my strategy and I apply it on Luna.

Okay. And, uh, you can just imagine a chart that goes to zero. Okay. And then you see the equity line of my strategy and it just stays where it was because it’s sold. 15 days before the crash. Okay. And they see that and they’re like, wow, I lost 50k, 20k, 12k, whatever they lost. Right. Uh, everyone lost money in Luna.

Okay. Almost everyone I talked to lost money in Luna. And they see this and they say, Wow. That’s awesome. Because it went out earlier and then it never bought back in. Right. And so you see what I mean? Like, so if you had a lower timeframe trading strategy, it would have, if it would have used one hour chart or 30 minute chart, it would have bought back.

Okay. The chance very high, they would have bought back in and you would have lost at least 20 percent of your portfolio, which I lost zero. Okay. Just saying. So you see what I mean? Like if it has so many benefits, it takes me a bit longer to explain, but it’s just. mathematics and probabilities. Um, and, uh, the more people know about this, right?

The more people will play this game, but I think only private individuals and family offices can do this because they can set their own rules and they can define their own success. They can say for me, that’s okay if it doesn’t do anything for half a year. But as long, as soon as you have other people’s money, you cannot run this system, which I love that, right?

Cause they will never compete with me. They cannot, right? It’s just not going to happen. And there are only very, very few funds on this planet who can do similar thing, which is like Warren Buffett and stuff, because people trust the guy will not just call him and say, Hey, why didn’t you make money last quarter?

Like who cares? Right. Like he has such a, such a reputation that he doesn’t have this issue, but again, he doesn’t invest anything in crypto. He’s not my competition either. Right. So, and, and you have, uh, your book. Bridgewater from Ray Dalio, right. He might also have similar reputation where people don’t just call the guy.

So there are very few who can do this, but most of the world and the professional investors, they cannot run this system, uh, which is good for us, right. Yeah. Private individuals. Yeah.

Yasi Zhang: Okay. Then the follow up question would be, what about. Your users, they subscribe to your auto trading strategy and they, they are impatient, you know, they are emotional and they don’t know what, you know, so they cannot manage, you know, how the market is moving and I’m losing out why the strategy hasn’t bought in or sold earlier. How would you handle that?

Michael Ionita: Yeah. Yeah. So, I mean, we have a community, right? So, [00:32:00] um, we have a group and I share, um, I share my opinion on the market and what’s happening. Um, but also they can come there and they can ask questions if they are unsure about something, they can, you know, place the question there.

It’s a members only group and it’s very high quality group. Um, it’s not a lot of noise there. So. you know, I encourage people to read it. Um, and so when there is a move up, down, or whatever, or the strategy is buying, selling at some weird time, then, um, that’s where we discuss about it. Right. So people are not, completely alone because they’re part of a community.

And, and I’m not, it’s not just me there, right. There are all the other members who are also active and helping each other out, um, with, with this. Cause some people like they have less FOMO, some people have more FOMO, right. Um, and there are situations where, you know, where it’s a bit trickier in the market.

I mean, of course, right. It’s always like this because, um, like Bitcoin, uh, made, um, 205 days. It’s what is this seven, eight months, something like this, um, officers kind of a sideways movement. It was ultra boring, nothing happened. And in that time, of course, people had questions and stuff, but you know, we have a rule.

The rule is that if the market doesn’t give, you cannot make. So it’s very simple rule, but, but it’s good to remember, you know, like if the market goes sideways or down, that’s fine. Like you can’t make money. You can even lose money. Right. Uh, especially in the sideways, but that’s also fine. It’s part of the game.

And that is why this is a longer term. Kind of commitment. So if, if it just runs for a couple of months, not gonna prove itself. It’s, uh, it’s very hard, but right now people are in profit mostly because they have not just one coin. Like I said before, they play a bigger amount of coins. Um, you have, I mean, I’m not even talking about Bitcoin because yeah, it’s obvious, but Solana is there.

AVEX is in profit. Um, you know, render is in profit. I’m just trying to figure out which coin I have. And this is not financial advice,

Yasi Zhang: please. This is not financial advice. Michael is just sharing. Actually,

Michael Ionita: let me check here my, my portfolio. You don’t see the screen, but I do. Um, so my Dogecoin is up 270%.

Yeah. My Aptos is up 60%. My Sui is 77%, you know, like, You know what I mean? Like, so even, even if you have a couple of coins in there that didn’t go up, you hopefully have more that did. Right. So it’s, it’s always important to manage your risk. Uh, and so I’m, you know, I’m very happy with, with the portfolio that I have right now, it’s fully automatic.

I don’t have to mess around. The only time I have to mess around is when there is a large, like drawdown. Um, and so the market somehow is correcting and you know, it’s bad mood. And then I can reassess if some of the coins. That I had maybe didn’t perform that well, and I might want to replace them with something else, right?

For the next leg up. Because, you know, when it goes down, there are sell signals and then I’m in stable coins, right? And so because I’m in stable coins, I can rebalance my portfolio, right? And I can move funds around and I can say, ah, you know, maybe ton coin didn’t move or something. Right? So I can then say, maybe I put it into whatever, yeah, into medieval empires, which moved massive amount lately.

Right. As, as, just as an example. Right. Um, and so of course it has to manage the risk and make sure it’s in the same category of risk, because if a strategy has say a thousand bucks, um, to invest with, I’m just giving you an example, then it has thousand bucks only because it’s in a higher risk category.

So now if I want to replace that coin, I should replace it with a similar risk coin because that’s the money I have. I cannot give it more if I don’t have it. Right. So, and this is. something that I, that I do because I want to play the narratives that are interesting at the time. But if you don’t have the time, you can just as well, you can just as well take simply the big coins and that’s it.

Right. And don’t touch it for the whole bull market and just call it a day. Right. But I’m just, because I do have a bit more time, I can, I can do this rebalancing as well.

Yasi Zhang: Just now you talk about risk management and then also in your previous, um, talks, like you mentioned several times, risks management. How do you manage your risk? is there a special way to do it or you rely on your automated trading tool? Because crypto market is so volatile.

Michael Ionita: I mean, I like to believe that every, every step on, in my personal process, which I also teach to other people, uh, is, is managing risk.

The whole point of all of that, is to manage risk. I think it’s the most important part of any investment plan or strategy or process because process is like bigger than a strategy, you know, like you can have a process, but then it contains multiple strategies with, uh, with, with ways to figure out how much money to put, depending on the risk reward and all this stuff.

So how I manage risk is, um, using the right strategy on the coin, making sure that even if there is another strategy. that I have access to, but it makes more money, right? But it has higher drawdown. I would not use it. Most likely I would use the one that has lower drawdown. And even if it makes less money, I will take that, right?

Because that’s how you manage risk. Okay. Because if you just always take the one that makes more money. but it can lose you 99 percent of your portfolio as an example. Well, that’s not good. Right? So, um, that’s why, uh, that’s the first thing. Then, um, based on the numbers of the strategy that I’ve chosen to use, there is a formula that I have.

It’s quite nice. And it tells me automatically. where in my portfolio I can put that asset. Uh, and that, well, that asset and strategy, because it’s always a combination of the, the coin and the strategy, right? Because that would produce the numbers, right? And so if it, if I use it on Bitcoin and it tells me, Hey, that’s the top category, you can put most of your money there because, and I have 50 percent Bitcoin right now, at least because the numbers are so good.

Like, fine, I do that. But if I apply the same strategy on sui or something. And it tells me, Hey, this is high risk based on the numbers. Then that’s what it is, right? So I put less money and I know what that means. Less money, right? Cause I have five categories in my portfolio and every coin makes it into one of those.

Meanwhile, I have a Google sheet where I put all the numbers and it tells me automatically, uh, which category it is. And then I just have to execute on it and set up the automation, put the funds on the account and that’s it, right? It will take care of it. Um, and this way, right? I can lose a couple of coins or I can make bad decisions, bad bets or something, or I was unlucky, let’s say, with something.

Like Ton is a good example because the CEO went to jail and there was unexpected and blah. And so let’s say that this coin wouldn’t make it, you know, but it’s fine. It’s just part of my portfolio. It’s not the whole thing, right? It’s not like I put 100k into Ton, right? So, you know, You see what I mean? So this is very important.

And that’s also risk management. And basically everything I do is risk management. Even the automation is risk management because when it starts going down and it looks bad, it will sell. And then it, it can crash massively like Luna, right? And it will manage my risk. And so all of that is, is, is meant to reduce risk and to increase chances of success.

It’s always risk reward. And the automation for me is risk management. Because, um, imagine if you buy. There is a buy signal on the bottom, right? Like Bitcoin, like almost at the bottom, like my, one of my strategies had on Bitcoin and I don’t buy, let’s say, right. Cause I don’t trust it. I say, nah, screw that.

Right. And I buy higher. When I buy higher, I reduce, I increase my risk because now I bought 10, 20 percent higher and if the price crashes, I might even lose money while the strategy still made money, right? Cause it bought lower. So even that, right. Even automation, it reduces risk. Um, because it buys at a risk reward point in time that makes sense.

That is good. And also it sells when it turns around and it looks bad. No. So you’re out. And then if everything goes to zero, you don’t care. It’s fine. You stable coin, as long as the stable coin doesn’t go to zero, you’ll be fine. And so that’s, for me, like the Luna example is very good. Imagine a child goes to zero, your portfolio stays where it was before it made 4, 600 percent profit, something like this on Luna.

And it didn’t lose it. That is, that is what matters, right? Because people, when, when you come to me, right, in the middle of the bull market, you don’t need me. Like, you think you don’t need me, right? Because you make money, right? It goes up, it doesn’t matter, right? But then when it goes down, You know, 10%, 20 percent and then there are, you know, recoveries and it looks like it goes up, then it goes another 10 percent down.

And then after like 50 percent down, you’re like, wait a minute, my portfolio was double the money. What’s happening. Right. Maybe I should have listened to this Michael guy. You know what I mean? So in the, in the leg up, people don’t care about risk management. Obviously not. Right. But if you come to me, Then you already had this problem, right?

You already had this issue last time and that’s why you don’t want to have it now. Right? So people who never had the rodeo, you know, of actually making money and then giving it all back, they don’t care about what I’m saying. That’s fine. Like go and do it, you know, have fun, you know. Maybe you make it, but if you don’t make it, which is 95 percent of people in crypto, you will, then you will remember me and then let’s talk later.

But now if you never had, if you never lost money in crypto, you definitely don’t care at all about what I’m saying. And that’s fine. That’s fine. You might be so good at this, right? That’s okay.

Yasi Zhang: Yeah.

Michael Ionita: But whoever lost money in crypto and you’re listening now, you know exactly what I’m talking about. And so you don’t want to give back your profits.

Okay.

Yasi Zhang: Yeah. So

Michael Ionita: that’s, that’s what it’s all about. Yeah.

Yasi Zhang: Okay. We talk about the risk management side. Let’s look at the other side, right? That the potential profit that you could have made, um, how do we internalize or rationalize this on a scenario that your trading strategy, uh, sold? you protect the risk, right downside, but at the end of the day, actually you lose out a massive gain.

Like how do you process this? So also it helps the audience to understand that.

Michael Ionita: You mean like losing, uh, potential gains is like, is that what you’re talking

Yasi Zhang: about? Exactly. Like you sold to protect the downside because of the risk management.

Michael Ionita: Yeah. But then it went further up or something like this. Yeah.

So I have two ways to do it because it’s not just, I’m not just. How it’s called, um, I’m not just a victim of this, right? There is a plan. So there is, um, a video in my education is called, um, uh, late to the party. And so late to the party sounds like, yeah, okay. The strategy is already invested. I’m not invested.

Yes. But it also means that if one of my strategies didn’t, didn’t buy or went out or whatever, but the other one went in. Okay. Thank you. then I can take those funds and give it to the other one. Like, if I really want to be part of the action, I can just say, okay, there was a buy signal. Just let’s give it to the one that bought this fund, whatever.

So that’s like, it’s not like you are fully or I am fully like a victim of this. Right. So yes, it can happen by the way. There was actually a situation like this also in the last Uh, bull market or recovery in the, um, July, 2021 to September, 2021, where one of my strategies could fully missed out or fully ignored, um, July to September pump.

And that’s life in total is still made very good money. But sometimes this, uh, this moves, they are, they just don’t look healthy on the chart, even if they would have made money for me, it’s just important to not lose what I have, that’s the most relevant. So if I, that’s like, if I miss out on a pump, I still have the money I had.

Fine. Like my life is not destroyed. You know what I mean? So as compared to people who leverage and lose their portfolio, that’s, you see what I mean? That’s a huge difference, right? So, uh, so I have the chance to react to it, to, to use, I have three strategies to, to use another strategy to enter with that so that I can be part of it.

If I so believe that this is a good idea, fine, I can do that. Or. Um, I can just miss out on it and wait for the next leg up, uh, and, and play that and in total, just simply know that I didn’t lose money. Okay. So it’s just like, if you put risk management at the top and then profit making after, then this is what you have to do.

There is no, There, you know what I mean? Like if, if, if protecting your money is the most important thing, then you have to be okay with sometimes missing out on a, on something, whatever it is, right. It’s normal.

Yasi Zhang: It’s like playing against your own emotion because risk management is so boring, but making more profit is so exciting.

So people have more reaction, emotional reaction towards, Oh, I lose out on this profit. But less emotional reaction thinking, Oh, I, I, I could have lost more if it’s a downside, but I preserved my wealth.

Michael Ionita: Yeah. And that’s why what I do is so, so hard for people to do. And that’s why most people, so I have this application process for my thing, whatever, but it has a reason, right?

Because, because most people will never like this approach because it’s just so weird. The whole market is about, let’s go to the moon and everything. Of course, I’m happy about that, but. But nobody talks about the risk. In fact, I have so many people talking to me. I have five calls a day, at least, for applications to my program.

Okay, it’s crazy, yeah? A lot of these people tell me, Hey, when I saw your channel, you talk so much about risk management and I never seen anyone else talk about this. On the whole internet, nobody talks about risk management because it’s boring, right? Who cares about this, right? And funny enough, those people that actually talk to me and care about this system are often rich people.

So I talk to a lot of rich people because they, they know that this is important, right? They, they don’t want the other thing. They want the risk management thing. Okay. They care about this. And that is why a lot of people that join my program, they have a lot of money made. Like it’s incredible. Like, so that’s why they don’t care about the cost.

It’s all good. Yes. It’s expensive, but they don’t care because it’s way better for them. in the long term, because they are not thinking in like this bull market. They’re thinking about, okay, you know, five years next bull market event, right? This and the next and the other one. So, and that will help them massive amount.

I mean, imagine what you can do in four years. If you don’t have to watch the charts and instead you can do other things, you can build a business and play the bull market in automatically at the same time. That’s awesome. Right. Um, and not give back your wins because you sell and everything. So it’s like, it’s just.

Uh, if you really put it on the table and you do the math, I think it’s pretty obvious. So that is funny enough, but I also like this, right? That I attract such people because those people have an interesting backstory. They have, you know, they have a great network. They, some people invite me to whatever, like, Hey, I have a yacht.

If you want, we can drive around, come over. Hey, come to Las Vegas. I have this thing. Hey, come to whatever. Like, so, you know, Yes, I kind of hit exactly the nerve of people who have some money, understand risk management. They’re nice people. Also, they want to connect and have a good relationship. It’s not just give me what you have, Michael, and then they go away.

Right. They actually want to communicate, right. And they want to be close and that’s nice. And I’m happy. Right. But it’s not for everyone. And if you’re here just to make money quickly, then you do, you will definitely care zero about what I have to say. Having said that I have. I have a nice video that had over 350, 000 views about how to convert the trading view indicator into strategy with AI.

And, uh, people love that stuff. So they start, I started motivating some of these, you know, risk takers, let’s say to, um, to, to create strategies because they couldn’t do that before, right? There was no way like, so you have an indicator, you think it’s cool. Because you look with your eyes, you look, makes money, but then you convert it to a strategy and you see how bad it is actually, because it’s always like this.

But then you figure out with my next video that you can combine multiple indicators to then only if all of them have a confluence, then you buy or sell. So I have with these two videos, um, I have a lot of people now kind of moving from being on the super risky side and now kind of, okay. at least trying to, to find a good strategy for themselves to build their own strategy, which is nice because finally with the chat GPT or one preview version, only with that one, it works right.

You can actually create these things before that it was not, not possible. Yeah. So it’s kind of a new, fresh thing that is possible has been unlocked for everyone. Whereas I can just code it, right. But most people can’t. So I kind of, Let’s say I have some impact on people to, to take them away from the pure risk taking mode into the, Hey, let’s look at the numbers mode, you know, and let’s, let’s, you know, let’s try to, to use strategies, but also to build my own and see how far I can get.

And some people are very, very good at this. Holy moly. Right. They came with very good strategies. In the Telegram group and I’m happy and I’m proud of them. And even if, I don’t know, I didn’t check it, but even if they make more money than me, that’s fine, mate. Like if I, if they made it by themselves and figuring it out, putting the effort, perfect.

Like that’s, they own it, right? They deserve it. Yeah.

Yasi Zhang: Can you give a few tips, for new crypto traders? What should they pay attention to? Where should they start?

Michael Ionita: I think they should start watching my playlist. It’s called algo trading knowledge playlist because it has everything that you need to know. It’s really fully free. Like just go there. You, you will find risk management. You will find a free strategy, automation, how to do all of that. It’s like, it doesn’t get really, it doesn’t get much easier than that.

Honestly, not there. Um, and only if you have. more money, right? It’s like 25K, something like this. Then you might potentially maybe care about what I have, but maybe not. Whatever. Just. step by step, one candle at a time. So I think really, like, I think you should, because I’m the only one who talks about risk management, that’s what people tell me.

Right. Um, and so, so I obviously will send you to my playlist because you should learn about this stuff as fast as possible. And then you can go from there and you can say yes, no, whatever. Um, but I think, you know, Most people will be, uh, better off, I think, to automate some of their portfolio, if not most of it, and then still have some other money to mess around with, you know, have fun with short meme coins, whatever you like.

Um, and then just draw the conclusions after the, after the bull is over, right? Draw the conclusions in percentage terms, obviously. What made more money? Percentage wise, did your manual trading make more money or the automation? And then for the next cycle, you will know what to do, right? If you’re a good trader manually, do that.

If you’re not, most people are not, yes, then automate, right? It’s very easy. And that’s why I give a free strategy for everyone. It’s called Gaussian Channel Strategy. It’s just so that people can get started. It’s a good one. Actually, it’s the best one you can find online. That is free. The best one that is free.

But there are better ones. That are paid, obviously. Right. But that one is nice. You can use it and it’s fine. So you see what I mean? Like I’m trying to unlock this for people without having a huge entry barrier. Um, and so that’s why I think that’s the best starting point. Yeah. And.

Yasi Zhang: Okay. Let’s do

Michael Ionita: it.

Yasi Zhang: Where to find it?

Like, can you give us the website?

Michael Ionita: It’s called, yeah, it’s on YouTube. It’s called Michael automates and then you find me. Right. And so there is the, I have only one playlist anyway. So you go there on the channel, it’s linked on the start page. Click there, watch the videos. Yeah. Get a coffee. Enjoy. Cool.

Yasi Zhang: I will leave all the links in the description.

So if you’re interested, you can click it, go to Michael’s website. His YouTube channel, check it out yourself. Hopefully that will help you to learn a little bit more about crypto trading and some other trading knowledge. Yeah. Thank you so much for your time, Michael.

Michael Ionita: Thank you, Yasi. Thank you very much.

Happy to be here. Awesome questions.