Every day, traders all over the world face the challenge of navigating the increasingly complex and unpredictable financial markets. The path to profitability can often be lonely and incredibly time-consuming. Many have turned to social trading networks and copied the strategies of leading traders within the community to enhance their own performance.
These platforms produce thousands of success stories from unknown traders who become masters of their craft. One such story is Wes Nolte, a 30-something South African-born chief technology officer based in London.
Wes (known by his eToro username ‘Wesl3y’) joined eToro in 2015. Through his diverse, risk-balanced, and bodacious trading style, he earned himself a position as a Popular Investor (PI) within just 2 years. PI is a program that allows top traders, such as Wes, to build their own financial business and earn a 2% management fee.
Wes’s secret comes from a personal interest in studying economics and human behavior.
“I read a lot on sociology and psychology out of pure interest. I also read a lot on macro and microeconomics, and I’ve found that economics is simply the study of human behavior via the proxy of “perceived value,” e.g. fiat currencies, stock. Once you’ve learnt this, and understand more about people (especially group-mentality) you become a significantly better trader — although you still need to couple this with a good deal of patience. For example, almost all positive and negative events that affect an asset are overplayed, either overbought or oversold. And big events e.g. an exchange is hacked, or a president makes an aggressive statement, become very good trading opportunities.”
When he was asked what drew him to eToro, he said he was “curious about how a social network built around trading might work; because of the ease and speed of trading; the great user interface; the fact that it’s secure; plus the knowledge I can draw from and give to the community.”
As someone with 17 years trading experience, Wes was also interested in the PI program, and how it enables top traders to earn a second income.
Cryptocurrencies became a very intriguing asset class for Wes. Beyond their trading profitability, he views crypto as a great tool to potentially “flatten the hierarchies that our society and culture, and so on, are built upon.”
Asked how he first discovered crypto, he said, “I first heard about bitcoin in 2010 when the price started jumping up from a few cents to dollars, and myself and friends were wondering what the hell was going on. I was skeptical and also quite poor, so I didn’t pick any up. Roll on 2013 and bitcoin is still doing its thang, and a few other cryptos had emerged. I decided to get in and bought some XRP and bitcoin, and built a mining rig to mine more bitcoin and a few million Dogecoins.”
Like most people, he also has his share of regrets during the December/January Bull Run.
“It felt like an enormous melt-up, and I dumped a lot of crypto fairly early in the rise. It hurt to watch it continuing up but less so once I saw it crash. I did buy back in after the second or third sell-off, so I got in too early, but at least prices were way off their highs.”
Despite the uniqueness of crypto, Wes acknowledges that “the market has been tough across the board this year” for all asset classes, including stocks, commodities, currencies, and cryptocurrencies.
As more amateur traders enter the crypto markets, the presence of trading bots has increased significantly. Yet Wes doesn’t believe that bots are currently much use for trading cryptocurrencies.
“I don’t think crypto trading bots are useful, yet. Three major reasons: first, the technology isn’t advanced enough yet. Second, spreads and fees on cryptos are still fairly high compared to traditional markets. Third, there isn’t enough history or market activity for them to learn from. I also believe this will change over time, especially as institutions begin trading crypto”.
We asked Wes if he feels any added pressure, responsibility or aversion to risk due to his every trading move being followed by 70,000 traders.
“My trading style continues to evolve, but that’s more around market conditions than because of copiers. At the end of the day I’m trading with my own money too, and I want to be successful.
I remember that when I hit $2,000,000 in assets under management (AUM), I felt quite giddy, and my trading style changed but only temporarily because I found that this wasn’t working out very well. I had a good long introspective think and was able to shake off the emotional burden of carrying so much extra cash on my back.
This was around half-way through last year, and it served me well as by the end of the year I was managing nearly $20,000,000 and had created millions of dollars in profits for my copiers.”
Many people have become discouraged by the bear market and are thinking of selling. We asked Wes what tips he could give to traders during this time.
“Ask yourself why you got in, what your goals were, and why you’re getting out. Remember that very little has actually changed besides sentiment (although you shouldn’t ignore this either), and that during this correction solid foundations for the future of cryptos have been established. They’ve been recognized by countries and banks, regulation is coming, and that’s a good thing, traditional institutions are getting involved in a big way and many, many businesses are now building on blockchain. Patience”.
Wes is one of thousands of traders who make money every day while amassing followers and establishing a name for themselves online. Although trading has traditionally been a highly specialized and isolating activity, today it’s become far more community oriented and collaborative. With patience, motivation, and the right mindset, anyone can learn to generate passive income while growing their network and increasing their knowledge of how to spot value across different markets and asset classes.
Originally published at cryptopotato.com on July 22, 2018.