Crypto Week 4 Summary
week 4 performance for crypto trading
Object: BTC Perp (5x).
Amplitude of the move in the object: -5.97%
Return: -1.0% (before commission); -1.9% (after commission)
Narrative on the market:
I recently navigated a challenging week in the cryptocurrency market, particularly focusing on Bitcoin (BTC). At the start of the week, I predicted on Twitter that Bitcoin, which was priced at $61,000, would drop to $56,000. My prediction was accurate, but unfortunately, my trading strategy didn't fully capitalize on this insight.
- June 29th Trading Review:
- At 12 PM, I observed a clear rejection at the -3ATR level and entered a short position at $61,060 during the second small red bar within the highlighted yellow circle. This trade unfolded as expected, reinforcing my market analysis. However, I opted for a wide stop loss at $62,100, which proved costly. I missed an opportunity to exit at the bar marked by a blue arrow, signaling a breakthrough of the -3ATR toward the SMA80. This oversight resulted in a loss of 3.5% of my account.
- Second Attempt:
- I reopened my position at $62,050 upon noticing a price drop but set the stop loss at $62,500. This position was also stopped out, leading to an additional 2.6% loss from my account.
- Third Attempt:
- Motivated by the setbacks in my previous trades, I took another short position at $63,200 with a tighter stop loss at $63,500, as indicated by the dotted line. The size of this trade was larger due to my earlier losses. This position was the most painful, as depicted in the chart. Despite a nearly perfect entry, the tight stop loss forced by my larger position led to a further loss of 3.7%.
- Turning the Tables:
- Observing that the price did not close strongly at the bar marked by a blue arrow, I entered another short position at $63,200, setting the stop loss just above the previous high at $63,900. With a more conservative initial position size, I was able to adjust and increase my exposure once I saw clear signs of rejection by the SMA80 at $62,000. I patiently held and finally closed all my positions at $56,800, securing a 9.0% gain. However, the cumulative losses from the earlier trades meant that I ended the week barely breaking even.
Key Takeaway: The key lesson from this week is the importance of emotional control and strategic reassessment after a stop out. I've learned that taking a step back to re-evaluate the chart—perhaps waiting for around six bars (equivalent to one day)—before re-entering the market can prevent rash decisions and improve trading outcomes.
This painful week has provided valuable insights that I intend to apply in my future trading endeavors.
Current position: Flat.
