11 Oct - 12 OctTotal return: 134%
Coins: QTL, SLR
Most traders tend to view trades as a two-step process: a decision when (or where) to enter - and a decision when (or where) to exit. It may be better to view trading as a ‘dynamic’ process between entry and exit points – rather than a static one. Personally, I tend to take some money off the table when the market is in my favour . The basic idea is that the position size of a trade would be reduced on a profitable move upwards and then rebuilt on a subsequent correction – putting me in a stronger position over and over again. Any time I have pulled some money from the table, and the market retraced back to my original entry point - I generate a profit that otherwise would not have been achieved.
QTLThis market has provided excessive opportunity for traders to dive in and then dip out with profit again, and again. It has been the ultimate scalpers market this week and has provided the rare opportunity for traders to “go long” for the week as it has been trending upwards since Monday. QTL was one of the Pumpers Picks Short-Term movers – sent out to members on Wednesday, allowing for entry at 6K.
This particular trade was born out of the fact that, as mentioned in one of my posts yesterday, there was still a distinct lack of sell resistance in the order book – (sign that a rally still has legs and the market will continue upwards).
Overall, this was a simple momentum play.... nothing too complicated – other than taking advantage of thin sell orders.
Before getting into a market I look to see that the market is in optimal condition to provide a favourable return. This is something I repeatedly stress to members – you have to “wait for movement” before you dive in. It is that simple. Once you have grasped that one ideology, you will be able to effectively take advantage of market momentum – letting the market carry all of your trades towards profit, instead of trying to trade against the market in an attempt to impose your own opinion on a trade – the market will always punish those that trade against the tide.
How would you go about monitoring and taking advantage of market momentum?
Create an account on Cryptrader and make use of the price alerts tool. With this QTL trade, I had price alerts placed to bring my attention to any significant upward or downward movement.
Once price action triggers my alerts, I want to see that 1. There are a string of past trades that have been executed by the minute, so I asses the trade history. 2. I want to see that there is more volume coming into the market than has been the norm for the last half hr. 3. I want to see that there is no sell resistance (sell walls) blocking my path to profit.
This is how you asses momentum. When all of these factors are aligned in your favour then that is when you should be looking to buy in via the sell side (place your sell orders as quickly as possible) – then it’s just a simple case of letting the Market momentum pull more traders in (who will also buy through orders on the sell side).. eventually your sell orders will be scooped up providing you with a healthy return.
Tip:
Let the arrow shoot itself. Despite what people are lead to believe, trading isn’t about “hard-work”. In fact, you’ll find that the people that work the hardest are often the people that make the least money – if any at all. The hard work in trading comes in the preparation. How prepared are you? What is your understanding on the way the Crypto markets move? What is your edge? What do you know that 90% of other traders do not? These are all questions that you should have the answer to. The actual act of executing a trade should be the most effortless part of your strategy – if this isn’t the case then the reason that your losses are magnitudes larger than your gains should now be clear.SLRLooking at the long-term chart, you will see that SLR has been able to maintain volume over a sustained period of time, in fact SLR has risen nearly 1400% since July - in a very natural manner might I add.
Not only that, but you will also notice a boost in volume in mid September that the market has maintained for nearly an entire month now – sign of strength.
Just a quick glance at the sell orders will reveal how scarce sell resistance still is. Definitely one to keep an eye on.
SLR was another Pumpers Pick that was went out to members this week.
Throughout the week, the SLR market had been slowly descending – but bringing in a bunch of BTC into the market with each significant dip – which confirmed my interest in this market, as other traders were lining up to get in below the market – despite the threat of the formation of a down trend. – another indicator of strength.
My whole thing was to wait for the downward plunge to subside – I knew that the decent was going to stall out as buy support was building up and there were no sell walls to speak of. After seeing the dump volume spike, followed by more buy orders being placed at lower levels – it was clear that the market was going to dip a little lower before taking off. I placed my orders in the buy side to catch a favourable price that would allow me to maximise my gain and eventually I was dragged into having an active position.
As expected, the price began to spike upwards due to the lack of sell walls which reinforced my assumption that only the slightest flash of volume would cause the market to rally.
Momentum built and turned my position into a healthy 43% gain.
Tip:
In these markets, you have to embrace the feeling of discomfort. The majority of traders often lean towards taking only the most obvious trades in an effort to make themselves feel more comfortable with their positions. This is what causes unskilled traders to buy into a market that is rallying (loads of green candlesticks, heaps of (often manipulated) buy support, excessively high volume) – this is the time that the professionals are selling. Learn to spot the difference between a buyers market and a sellers market – this shouldn’t be hard, because they are worlds apart.Avoid the temptation of wanting to be completely right by shunning all or nothing decisions and instead scaling in and scaling out of positions.
Note: BTC is a buy right now. Pay attention to the price and execute your buys at the low points. Oct - Dec will be very interesting.
Twtter: @Pumper_Ryan follow for daily picks, and updates.