Then comes reality.
Most recently, I chumped my way into losing all of the gains I had made in the last couple of years, as well as a little of the money I had recovered from earlier losses. Yes, I was in profit, and I blew it. How?
Arrogance. Ego. Blind faith.
I lost my sense of discipline – of routinely implementing what I knew were best practices for me. I grew tired of conservative trading and started hunting big trades. I started leveraging trades, and allowed fear, anxiety, and faith to guide my actions. Fortunately, I had the good sense to back out before cutting too far into my principle and took a LONG BREAK. I covered some random debts floating around and paid off a credit card.
I left $100 in an exchange account and moved about $400 into a cold wallet – because you never know. And when I had taken all these steps back, when I looked at what I had experienced, I realized it was time to try again – fresh – and having learned something about loss.
Trading in 2020
I am under no illusion that this is going to be easy, or even that it will work, but I like a challenge and I’ve got a good one lined up: starting with $100, I will trade for 1% profit per day for 926 days (two years, six months, and 13 days) and end up with just over $1 million in profit ($1,003,672.73, to be exact). Talk about the magic of compounding interest, right?
So like I said, audacious. Objectively unrealistic. Unforgivably naive. But truly, mathematically sound.
The whole scheme relies on making a profit – albeit a very small one – every single day. In order to pull this off, here are a few strategies I’m going to put to use:
- Look for high-liquidity markets with repetitive sideways action. I’m sure I’ll get into my reasons why at a later date.
- Identify intraday trends within larger intraday moves, and scalp like mad when a good setup shows up.
- Always place a stop-loss, even if there is the chance that I’ll get stop-hunted in a mostly unregulated market space.
- Trade on multiple timeframes – reevaluating minute charts on an hourly basis, hourly charts on a daily basis, daily charts on a weekly basis, and weekly charts on a monthly basis.
- Practice fundamental analysis to determine market opportunities, and technical analysis to time entry and exit.
- If a trade looks to profit more than what I need on the daily, let it ride and set up a stop loss at or above my projected target. Check in frequently.
- Check my ego and my fear. In the end, no matter what comes of this experiment, it will have cost me $100.
So, if you are inclined, please feel free to follow along. I’ll post my trades, from analysis to exit, good or bad, until it becomes clear which way this thing is going. Or I get bored. That could happen too.