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This trading review deals with my trades of the cryptocurrency FitFi. I did not trade well on this and had a quite bigger loss. I don’t like to write this, as losses always do not feel great, but I still want to get this out, as losing is part of trading. If you can not get along with losses then trading is probably not the best idea. What I mean by this is that you need to be okay with losing money and be able to deal with it. I am also still learning to get better. Below you can see the statement of this trade.
Yes, I basically covered the top.
First I need to identify what I was doing wrong and what the problem was. My problem here was that I revenge traded, meaning that I had smaller losses before and “wanted to make my money back”, which is always a bad idea, as in 95% of all cases only lead to bigger losses. That also was the case for me here. What I normally would do is just shut the PC down or at least close the trading page. I did not this time and got the bad result out of it. So what was the problem that led up to me revenge trading. I did not make a plan for the cryptocurrency FitFi and therefore did short it on what seems to be the frontside, as it is still holding near the short term top. This is not good behavior and I know that, but slipped here. I should have made a reasonable trade plan beforehand and followed it.
Eventually I was trying to find the top and that is a really hard part of trading. An easier trade would have been to wait for the crypto to set a top (on the daily or hourly chart) and then trade when it grinds down slowly. The “boring” trades are often the easier ones. By “boring” trades I mean the main action (high volume & high volatility) is over. On the chart below you can see my average entry area (blue) and me getting stopped out (red).
Analyzing is the first step to make sure this does not happen again, but I need a plan or actions that I do so I do not revenge trade.
What am I going to do to tackle this?
- I put little notes on my Desktop saying something like: “DO NOT REVENGE TRADE OR LOOSE BIG”
- Every Time I feel like a revenge trade might come, I will close all positions and shut down my PC.
- If I do trade a crypto twice and lose two times in a row, I will not trade that crypto for the next few days, even if this means I will miss the best part of the trade.
- Another thing is I will do physical exercise when I take a revenge trade, right when I enter this trade, so I get the idea of being “punished” every time I enter into such an emotional position.
- Write into a trading notebook/spreadsheet for every coming day: Did I revenge trade today? > Yes/No ; as simple as that to hold myself accountable.
These are my steps that I will take to stop myself from doing stupid and emotional trading behavior which will ruin my trading from good days.
Besides these steps, I am writing about it publicly, which makes myself want to improve, so I do not have to write these texts more often. When
How will I trade moving forward?
When I start trading again I will definitely trade with lower size in comparison to before to get that confidence back again. I will also only focus on “easier” trades, so avoid a cryptocurrency when it spikes 25% or more on the day, keep it on watch and trade it a few days later, when everyone else forgot about it already. Also I will stick to my plans, write them down beforehand and not deviate from them to avoid mistakes. If that means to miss trades, that is fine for me.
Focus on the patterns that I did well with in the recent weeks, even if that means to not trade for a few days and wait. I need patience for that and it is not easy in my opinion, especially in the crypto markets where anyone can trade at any time. I tell myself though, that trades will come and go, the markets will be there for a long ass time, so no need to rush anything.
I hope I could set some light on the inside of my trading and how I try to deal with losses/bad behavior. As I said, no trader wins 100% of the time and losses are part of trading, so make friends with your losses and learn from them.
I hope you all have a great day!
This is not financial advice, it is for educational purposes only!
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