Thoughts of a trader.

CHAPTER IV

I had a really bad day trading last night. somehow, I forgot all the rules and I almost burned my entire account.

First, I had a position on ADA, which Coinbase announced that they would list on their exchange. I got in late, exactly after 4 hours of the announcement. The price had a major move and it was on a reaction phase. I started with thirty thousand coins. Without any thinking or analysis. The price went against me of course. Then I added another 14000 on my line. Price was still trending down. But I decided to keep my position open overnight.

Next morning, the price started to move my way and I was green. But I wasn’t happy with the gains. I didn’t want to exit the position. So, I waited. The price hovered at certain level and I decided that it was best to deleverage my account so I sold almost 25000 ADA thinking that I would buy more if it had a dip. Then the price went bellow my entry point. I was mad, because I didn’t take profits and now I was losing money. I got rid of my position. I couldn’t accept a loss on that one. I also cancelled my buys and forgot about it.

Then I went to trade bitcoin. There was a triangle forming. I have seen that before. And for some reason I was sure that the price would break down. When I got my orders filled the price was touching the lower trend line. then the price started to go against me. Very slowly the bulls were taking money from me so it wouldn’t hurt all at once. I was still convinced of my view. After a while the price was touching the upper trend line. I was now convinced that I was wrong but, I was hoping that I wasn’t.

Then, once the price was looking weak I made the decision to sell another 50000 worth of btc. Well, that was not going to end well. After that, I had one last chance to get out without losing anything. I, unfortunately for my balance, I didn’t take it. Anyhow I finally made the decision to exit and I lost a good chunk of btc. But that wasn’t enough tuition. I had to lose more!

Anyhow, I went to have a smoke. I was tired of looking at the chart and I didn’t realize it was 4 a.m. I was very indecisive about the direction of the movement. A few times this had happened to me, say I was short, then I would close my position at a loss, and reverse to the bull side just so the market would take more money from me. I’m saying this because I thought to myself that I should go long now. That was my trader`s instinct acting. But I had that thought on the back of my head saying that I have done that before and it didn’t work. Also, my reason was telling me that I was tired and I should go to bed. It was 4 am after all and I was losing money. Well, I didn’t. I went back to the computer and I decided to keep my bearish view and go short again with 75000. That was the worst decision I had made. Well I knew that I would get liquidated if I was wrong. After I got in the price rushed against me. It was strong and fast. I was sweating. I tried to get out immediately, but if you trade where I trade, when these breakouts happen the exchange system go down and you can’t place orders. I thought it was over for me. Luckily it was a short lived move and I was able to close my position at a rather small loss considering that I made so many mistakes. I thought again to go long because now I was sure that the price would go up, but I didn’t. If I had I would come on top and recover from my losses. Today the price was trading 120 points higher.

Well, I am a bit down today but I’m also happy the I am alive - market-wise, and I can recover my losses and learn from these mistakes. Also remember that ADA trade I told you first? Well it touched my targets.

There are a few things about the market conditions that I would like to point out. Longs were 52% and shorts 48%. However, there were 35 million USD in shorts that were open on the level I opened. Also I saw that a lot of longs were getting closed and shorts getting open at Bitfinex. I thought I was following the insiders and going with the big money. Well, they are all losing a lot of money today.
My indicators showed at the time that I opened my position that I was right to sell, but after a while I couldn’t see it anymore, and actually, I saw that I was wrong.
The bulls were strong and the book didn’t lie. Regardless of my indicators I could see that bears were running out of steam. In fact, those bears were the supply of suckers the market needed to be able to move up. I am always sharp to identify that, but not today.

Another thing would be the chart pattern. I was trading an ascending triangle close to its apex and that is risky. I like to consider myself as a speculator, and trading apex of triangles are, in my view, some sort of gambling. On the top of my head I can say that there are at least 5 different outcomes when it comes from trading triangles. And it can be tricky to trade them. It requires a pretty sound strategy and tactics to profit from them consistently. What bothers me is that I did have a sound plan which I choose to not follow. I have learnt that before. Let’s say I have avoided a mistake that I made before and made another mistake that was a brother of the later. A trader will always make mistakes and hopefully learn from them and then make some variation of the same mistake at a later point in life.