Now that I am fully in my trade that I posted about yesterday, average cost ~ $13,700, I want to review where we started this trade so if your new here you can see that our situation may be different then yours and we have a little cushion which provides us leniency in our risk taking. The cyan boxes are levels we bought (bull) and the magenta are levels we sold (bear). Now the buys were position buys, but the sells were all out. Note we never really came close to buying the bottom or selling the top, but we have made a profit on every trade except the one in black. Like baseball you do not need to be above 500 hitting to win games. You definitely do NOT have to hit home runs. Base hits are the bread and butter of any baseball team, and this goes for trading as well.
We have traded both Bullish and Bearish markets without unnecessary margin risk. Though we did not hit any home runs, our batting average is over 700. Hello Cooperstown! This is an example of how money management, patience, and going after small profits while cutting losses quickly compounds your portfolio. Its also why we have to zone out the crowd noise when we are trading. What happened to the Korea ban on cryptos that I heard about? ;). Just like baseball players you have to zone out the noise!
Bitcoin has been resilient and I believe we test the old high or make a new one before pulling back in a major correction. A strong green bar at the close of day would confirm this move. The 14500 and 15500 levels are the 0.382 & 0.618 retracement of the previous corrective wave. These are levels we will expect a slight pullback.
Bottom line, trading is not easy, its tough work and requires dedication and focus. Money management and small gains are the keys to success. Yes once in a while we hit a home run, but that is only because we were focused on base hits.
I'm not so sure I would be comfortable here with a short play on margin! Those must be some uncomfortable shoes right now! Should have taken profits at 11k when you could have. Take profits when you can where you can, and stop trying to become a millionaire overnight!
Komen
⋅
Crap forgot to change the sell levels to magenta!
Komen
⋅
If your going to be a trader learn to be PATIENCE and control IMPULSIVE tendancies/emotions! Keep in mind we just entered the trade. The other thing to keep in mind - do not focus on a $500 price swing with a $14,000+- price tag.
Buying one $13,700 share is = to Buying 100 $130.70 shares or 1000 $13.70 shares. All three positions cost $13,700.
If this was Apple and we bought 100 shares at $137.00 I would not be flipping out if it went down to $130. If this was AMD and we bought 1000 shares at $13.70 I would not be flipping out if it went to $13.00. The price is relative. If your nervous your risking tooooo much period! The chance of us going straight to $5000 without any pullback is slim to none! Especially in a longer term bull market. Not that it can't, but we should be able to identify a price structure breakdown. I do not see that at this point!
If your going to trade understand you will never time the top or the bottom, with few exceptions LUCK! Stocks, gold, coins go up and down whether in a bull or bear market. You have to understand this. In the context of the longer term trend we are still bullish. Even today we had another higher low. But you have to allow time for the market to move. Look at multiple time frames and do not focus on one. You'll get tunnel vision trading!
Komen
⋅
This is highly risky, but I am added another small position here at $12860. I'm going to try and catch the bounce and this will help offset. DO NOT attempt this if you are not willing to risk a loss!!
Komen
⋅
And a nice little $75 scalp trade to reduce my cost a little.
I want to share a bit of how I trade margins. Because I see that many traders seems to be afraid of this type of trade and never recommend it.
I personally trade margins quite often - depends on what market offers and my availability. I prefer high volatility days - after big trend up or down. For me is like the bread and butter as @goldbug1 used to say. It is like something extra on which I don't count too much to grow my account. Very often is just to cover my fees! This is my attitude and expectation while i trade margins!
...but...sometimes this "small" trades turn into much more than to cover fees. From time to time I add few % to my account.
Of course i have some rules I do follow.
1. I trade margin in high volatile days (up or down - doesn't matter);
2. I never, ever leave my computer in a middle of margin trade;
3. Often my trades last 10-15 mins up to few hours!;
4. If goes wrong I wait for first retracement and leave trade;
I hope this small guide add one additional trading skill to your set.
TommyMui
⋅
@stell_s1, these are useful tips. can u share more on how u determine if the day is with high volatility or not? I always leave my margin trading over nights, always give me surprise in the next morning. and I don't quite like this idea, lol. the tips 4 is good, I sometimes hold and missed it and the price sections just never come back up in few days.
IanMihura
⋅
@stell_s1 You should start posting ideas of these swing trades bro/sist
Would appreciate
goldbug1
⋅
@IanMihura, @stell_s1@TommyMui There is nothing wrong with trading margin in a liquid market. However trading bitcoin, on margin is not equal to trading SPY on margin. The market in my opinion is not liquid enough. It may not happen today, tomorrow, or next week, but one day there will be a swing in weak markets that will create a domino affect through stop losses. Just because you enter a stop loss at $12,500 does not mean that is the extent of your risk. If there are not enough buyers you could get stopped out at $5000. Just look at what happen to ETH last year! or even NEO a month ago. Went from $40 to $5! Ask those traders about margin stops and how it worked out for them. Even in the forex, gold and silver markets we see these happen and they are much more liquid then one crypto exchange will ever be. I mean how many bitcoins are actually traded on bitmex?
Bottom line, in my opinion why risk losing everything when this market is going up 20-30% a month? That makes you rich in 2 years if you invest just 10k. I have seen margin trading go bad, and actually my buddy wiped out 8 months of profit last year selling naked calls on margin! Nothing like working hard to build up a stack and see it disappear in minutes only to bounce back an hour later.
And like you said, you are married to that monitor! I left a trade open last year and went to dinner early. That dinner cost me $6200! And that was trading Qualcomm! very liquid. Understand with great rewards comes greater risk. Its not as simple as having 4 easy rules to go by and that keeps you somehow safe. There is no safety when swimming with great whites!
nginx
⋅
@goldbug1, The domino effect already happened with ETH last year when prices at GDAX crashed to 10 cents after a whole lot of stop losses triggered at once. Even a 5m dump is enough to clear out the order book of one of the world's largest exchange. This is why I don't trade on margin. For people that do, they better use stop limits instead of stop losses.
IanMihura
⋅
@goldbug1 I'm actually learning the trade just now, and came to accept the speed of trades and price swings. Then I so happen to stumble across some other USDEUR or SP500 charts and I find I can easily read it, and everything is normal but for the boring fact that these charts are SO SLOW! It's like watching black and white TV one you saw 4K curved-edges limitless edition
I don't know what you refer to exactly when you say that a market is not "liquid" enough, but this crypto markets sure do look very volatile
And as well, maybe its not that safe, but it sure as hell is a lot more fun
TommyMui
⋅
@goldbug1, thanks for your share. I totally understand your point of not having margin trading in crypto as the liquidity is too large. that said, your sharing teach us we should always set some out of price limit order to buy good stuff at the dip. I myself, tried eos margin before, I open long position at 12.5 the liquidity is 7.x something. That coin hits as long as $3 for a sec and bounce back to 8.x, my position is liquidated and I had my lesson learnt.
bigdogg
⋅
@goldbug1 It's a manipulated market. The price is going where the insiders want it to go.
bigdogg
⋅
I wonder when people will realize I'm not just making this shit up...
Dudleydogg
⋅
@bigdogg, LOL not at all I really appreciate all your insight, some times I think your writing about me specifically good Play, chickened out last time but going to play the next swing for sure.
I personally trade margins quite often - depends on what market offers and my availability. I prefer high volatility days - after big trend up or down. For me is like the bread and butter as @goldbug1 used to say. It is like something extra on which I don't count too much to grow my account. Very often is just to cover my fees! This is my attitude and expectation while i trade margins!
...but...sometimes this "small" trades turn into much more than to cover fees. From time to time I add few % to my account.
Of course i have some rules I do follow.
1. I trade margin in high volatile days (up or down - doesn't matter);
2. I never, ever leave my computer in a middle of margin trade;
3. Often my trades last 10-15 mins up to few hours!;
4. If goes wrong I wait for first retracement and leave trade;
I hope this small guide add one additional trading skill to your set.