08 Oct - 09 OctTotal return: 162%
Coins: XCASH, UTIL
If you don’t mind being wrong on the way to being right, you will learn a lot. When I first started in crypto, I developed a discipline that whenever I put on a trade, I would write down the reasons on a pad. When I liquidated the trade, I would look at what actually happened and compare it with my reasoning and expectations when I put on the trade. Each mistake, if recognized and acted upon, provides an opportunity for improving a trading approach. Most people would benefit by writing down each mistake, the implied lesson and the intended change in the trading process. Trading mistakes cannot be avoided, but repeating the same ones can be, and doing so is often the difference between success and failure.
XCASH
A lot of sideways price action throughout the weekend. A key characteristic was, every time the price dipped – the market was always brought back into equilibria by traders filling offers on the sell side – an indication of positive market sentiment.
I tend to monitor market movement prior to placing a trade. I want to know if there is momentum in the market, and what direction momentum is tilted. So I use Cryptrader to put on price alerts for upward action and some alerts for downward movement. This way I am able to keep ontop of new lows and highs.
In this particular instance, my dump alerts began to sound off as XCASH dipped into a lower price range than it had been in for nearly a week. This is significant for two reasons. 1. The next trading session would dictate the direction of the market – as this was a new low for the week. 2. If the price jumped – a rally would ensue, if the price continued to decline, this would indicate bearish sentiment and I would therefore have to move onto another coin.
Good volume began to enter the market via the sell side as a string of small orders were scooped up. This action suddenly halted, leaving a small sell wall at the top of the orderbook.... “Looking beyond the wall”, I saw that there wasn’t any upward resistance at all – just some insignificant sell orders sprinkled throughout the orderbook. Having bought the wall, my position was now active. (Always place your sell orders as soon your position is active – you want to add an element of automation to all of your trades)
This wasn’t the most straight forward trade.. but it illustrates the philosophy of holding a position and not cashing in profit prematurely. Volume was slowly dissipating, and there was some buy support that would have enabled me to dump out with a profit. This would have been the comfortable thing to do. But, in trading, what feels good is often the wrong thing to do. Sell resistance was still at the most minimal level – I knew that only the slightest jolt of volume would propel the market into a rally so I positioned my price alerts and stayed put.
Tip:
I could have cashed in a small gain when momentum waned and trade volume plunged to nonsensical levels, but instead I choose to let the trade ride because the technical factors that brought me into the trade were still present. If you are under the false impression that taking only the smallest profits can save you from going broke, then you are sorely mistaken, because that is precisely how most traders end up getting cleaned out. You have to shift your mindset towards maximising the gain itself rather than the chance of gain. If the market is still in great condition, you need to resist the urge to liquidate profits prematurely. This will aid long-term profitability.UTIL
If you have read some of my previous posts then, by now, you should be aware of how important it is to keep some lowball orders 30% – 50% below the going rate of high volume markets.. because when these markets dip – the correction alone invariably provides gains that far outstretch the gains produced by the initial rally. These types of manoeuvres are the closest that you will get to executing a risk free trade in Crypto. (Unless you’re a pre-mine specialist – if otherwise, then you need to be taking advantage of dips and corrections in high volume markets)
After spending a few days in consolidation, UTIL slumped into a down-trend at the top of the week – with high volume. I noticed that every dump session was bringing multiple bitcoins into the market. I mean, the market took three hours to descend from 12K to 9K, then to 7.6K – but then only an hour to shoot back upto 12K producing a 59% gain.. so there was obviously considerable strength in this market.
Having observed this price action without getting involved due to late arrival, I put in some orders 40% – 50% below the market in anticipation of another dip – I was confident that the market would dip again due to the fact that the overall trend was downwards, and there was still some good volume bouncing back and forth.
As soon as one of my orders filled, I placed my sell orders with urgency because you can never foretell if the correction will be long and drawn out or swift and sudden. (When low balling a market, always put prices alerts in to notify you if the market is approaching your orders)
Tip:
This method alone is clear evidence of non-random price movement. I challenge you to observe every high volume market. Pay close attention to the major dips – you will see that prices in these types of environment will always spring upwards after a decline. This is just one out of a few non random price patterns in crypto.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.
I'm quite curious as to how this all works. Will hopefully pick up some tips.