Our strategy at momentum-analytics.io for the “Rational Active Allocation Index” will be to weigh strategic projects relative to market dominance. However, unlike passive indexes, we use our proprietary approach in addition to key market breadth, cycles, and sentiment indicators. Allocations to projects are targeted (but not required) to be less than 5% of the total market capitalization of the Index.
There will, however, be times when larger allocations to Bitcoin and Ethereum will be employed to amplify growth in trending markets with momentum strength. USD or fiat stable coins, on the platform, will be used to their maximum allowable allocations to manage systemic risk. Rebalancing will not be performed on a predetermined schedule, it will be performed as and when required to maximise growth and minimise risk.
You learned investing from scratch. What would you advise beginners who want to follow a trader’s path?
Trading is not for everyone, however, my advice is that if you want to be a trader: don’t wait, just do it. You will soon find out if you are able to deal with the extreme emotions. Trading is mentally challenging, you need to overcome your weaknesses, you have to be honest with yourself, and you must be prepared to take on risk. Be prepared for a long journey, becoming a successful trader/investor requires constant self reflection, learning, and teamwork. Find a good trading/investing school, work within a team, and find a mentor who will make succeeding a lot easier. But remember, “For those who love what they do, even working 18 hours a day, 7 days a week is not work at all. It is just fun.”
Having an extensive background in IT, economics, and also poker, how do you see current crypto development? Is DeFi just a fad or is it something that could become a concrete challenger to the traditional financial system?
When Bitcoin first appeared, only a small percentage of people in the world knew about it. Five years later, it was the same for altcoins, and DeFI was only a vision. Populations all around the world are finally challenging the institutions that have let them down. It is easy to see why DeFI and crypto’s principles of inclusion and transparency are challenging traditional finance.
The tools to run your own personal bank are largely in place now, with both Bitcoin and various altcoins now household names. It’s hard not to see DeFI with its unlimited possibilities getting there too, especially when looking at the growth rates of ETH being locked in. DeFI is currently a little overextended – but we should remember this is only the first wave – there is a lot more to come.
What would you outline regarding your strategy? Do you follow any particular rules?
We use rigorous fundamental screening tools to identify projects, in combination with our advanced technical analysis techniques to ensure we are adjusting allocations to projects when they are in the right technical locations, when they meet key momentum metrics, and have provided confirming market structure signals. As our mentor would say, “it is this combination of fundamental and technical analysis which produces a rational approach to investment.”
When there are a large number of highly correlated assets, position sizing is extremely important in creating a successful strategy, momentum-analytics.io have developed a sophisticated allocation rebalancing tool to ensure we are always positioned for long-term success.
Is there any crypto project that has captured your interest?
It’s very difficult to pick one project in this space with so many talented teams, instead we will attempt to identity a few project groups and investment themes we believe will produce long term success:
- Our first group includes exciting projects like LINK, XTZ, ALGO, & ADA, and some who also all offer staking rewards,
- For our second group, we have to include the power of wrapped BTC and ETH – seeing these two behemoths work together is what crypto is all about in our opinion. We would include the relevance of DAI, MKR, LEND, COMP, ZRX, KNC, and REN into core DeFI projects in this group. With liquid decentralised exchanges, savings and loan products available,
- Our next group would be complex DeFI financial products – here we are looking at leverage, options, and insurance projects, SNX, HGET, YFI, to name just a few,
- Outside of the staking and DeFI space, there are great use cases of real world assets moving to transparent ledgers, i.e., PAXG, XAUT, and we believe privacy centered projects DASH, XMR, and ZEC will also come to the fore again.
So with fundamental analysis done, when the technicals are also right, we get very interested.
Check the Strategy here: https://www.iconomi.com/asset/RAAINDEX