aetheropus

This is why we Stop Losses.

Riding high on sequential wins, I continued to study ETHUSD and determined that there was probably one more action up before a big bear move. Ethereum has started forming a wedge on the daily and was at the bottom of a parallel channel on the hourly, so I figured I’d squeeze in one more 3-4% play before reassessing.

This did not go as planned. I set up a buy and $255 and a stop loss at $253 for the first buy. This morning, almost immediately after buying in, the candle wicked down and picked up my Stop Loss order.

But my analysis seemed to be holding, so I called that on overagressive SL order and bought back in again, this time at $252. It ended up that my trend lines were no longer valid and the price collapsed to $250 before I stop lossed out at $248. Oh well. All told I gave back a chunk of this week’s profits but still closed ahead.

Proof I Am Learning.

In the last major bull cycle, I allowed my ego to tell me the market was over by so many times that I ended up shorting early and losing huge amounts of profit. I remembered having read Mr. Anderson on Twitter having written that ego hero shorts the top instead of waiting for the market to showed it was time for a trend change. The Same is true when longing a clearly bearish moment. This time I shelved my ego, reread the charts and instead of sticking to objectively incorrect analyses and started looking for the next move.

That’s when I noticed that a major support had broken on ETHUSD, and that created a gap. Incidentially, the gap that opened up was around $230, which was also a Fibonacci level for the most recent bull move…

Here’s one that went the right way – right away.

Setup: A quick review of overall crypto markets (2/23/20, ~5pm PST) showed that BTCUSD was struggling against resistance at the all-important $10,000 mark. It is common knowledge that as BTC goes, so often does the market – at least for fiat pairs. I saw that ETHUSD, one of my all-time favorite pairs, was overbought on RSI and, even after a monumental injection of USD volume, the price had not climbed substantially. In fact, ADL showed that the volume was dropping, though the price stayed the same. Whelp, that’s short term bearish.

Entry: SHORT 1 ETH @ $274.61 with 5x leverage. Stop Loss set tight at $275.50. Take Profit at $265.00

The price collapses, dropping a wick all the way down to $266.00 before bouncing back around $270. A 5000 ETH sell wall goes up, so I move my Stop Loss to $270.25, confident that I have already secured my daily profit. I also move my Take Profit order to $266.10 just in case the price whips down again.

Exit. Took profit at $267.41, netting a 2.2% gain (after fees) and a grand total of $6.04.

A Reflection.

$6.04 is small potatoes, to be sure, especially after having gained (or more often, lost) hundreds at a time recently. But a gain of 2.2% in just minutes of trading is something to be fired up about. It is rarely that simple, and almost never that fast, but a win is a win and it’s a good way to start this adventure off.

Audacious. Unrealistic. Naive. Mathematically sound.

I describe myself as a tech enthusiast. I like building and programming computers. I like fixing appliances. I like engineering sometimes complex solutions to otherwise simple problems. I love Frys, just about any hardware store, and Amazon. Heaven to me is a well-organized garage, rife with tools, and the time to use them.

As far back as five or six years ago, I had been dimly aware of Bitcoin, having seen it referenced in some article about a guy who created his own fake identity. He ended up sending hundreds of Bitcoin (then the equivalent of about $500) to a guy in San Francisco to get a REAL CALIFORNIA ID with a doctored picture and other fake documents. Anyway, at the time, I dismissed the whole cryptocurrency concept as a footnote in committing Internet fraud.

So imagine my reaction when I was introduced, early in 2018, to the world of cryptocurrency. At a backyard BBQ, a colleague of mine, respectable and intelligent, explained how he had just made a KILLING in Bitcoin trading. What’s more, he explained that there were dozens of other coins out there, and thousands of scammy copy-cat coins to boot.

And he said there was still money to make in cryptocurrency. So, that afternoon, with a fist full of twenties, I set up an exchange account and I bought my first crypto – Litecoin – at a friendly discount.

Then, like most, I lost a wad of real money in what was effectively Internet gambling. The market tanked in 2018, and, high on the “hopium” on Twitter and the dopamine doses I’d get with tiny gains here and there, I dove in and blew away real dollars and countless productive hours on trying to anticipate the market’s next big move.