BLOWING OUT AT THE BOTTOM WITH A FROWN . . .
I started writing this blog in on April 5th, 2018 with Blowing Out Of The Bottom With a Smile. https://medium.com/@homeytel/blowing-out-at-the-bottom-with-a-smile-702cb96b8ea6.
The purpose is to teach investing and trading bitcoin in a way I have never seen it taught. . . or at least in a way I have not seen it emphasized.
The reason for this as that we tend to look at markets wrong. . . we tend to look at fiat dollar price. As a result the wrong questions are often asked even by experienced traders . . . what will the price be next year? . . . what will the price be next month? . . . what will the price be next week? . . . what will the price be tomorrow? . . . what will be the price in four hours?
This is a very difficult habit to break. . . further even if the habit is successfully broken one can easily fall back into the trap . . . even Ugly Old Goats! The reason?
One Word: EGO
Yes, even Ugly Old Goats have an ego . . . and it constantly gets in the way of successful trading. By nature we want to be right.
This original article was followed by two other centerpiece articles:
How To Acheive The Same Results Of a Professional Trader Without Taking The Inherent Risks.
As a former gold bug and self taught economist I first heard about bitcoin when it traded par with the dollar and then…medium.com
At a recent hearing CFTC Chairman J. Christopher Giancarlo famously attributed the bitcoin term “hodl” to be an an…medium.com
If you are new here and have not read these foundation articles, please do so. You may discover trading is simply not for you.
Trading bitcoin is not a prerequisite for success in bitcoin. Trading is the sideshow. The main event is hodling and sayvving. And it remains my hope this will eventually be the focus of my writing.
But what I quickly discovered is that while hodling and sayvving and developing bitcoin has a core following, by far the greatest interest is trading bitcoin . . . i.e. what will the price be tomorrow, next week, next year.
So in order to build a following to go where I eventually want to go . . . I decided to meet this basic demand emphasizing trading . . . which I do quite well. . . but not in any traditional sense.
My emphasis is not my track record of good or bad calls, but trading principles that work regardless of technical skills. You can be a stupid, ignorant, ugly old goat and still be a successful trader. The key to success is to recognize and embrace your own stupidity and weaknesses.
If you think you have the personality, desire or ability to be a good trader. . . humility is a prerequisite . . . with that I can teach anyone who has ears to hear to trade successfully.
And if you have ears you will first purchase and read The Art of Execution: How the world’s best investors get it wrong and still make millions by Lee Freeman-Shor.
Over seven years, 45 of the world's top investors were given between $25m and $150m to invest by fund manager Lee…amzn.to
When I read this book I immediately realized that this outside observer described the trading principles I have learned over many years. If you truly understand and follow what is outlined in this short book you need nothing else to be a successful trader. . . really!
If you like my work and want to support it, please use the link above to order it so I get a small referral credit.
One of my hero's and mentors in life is Hans Sennholz who emphasized the best way to teach is by example. https://en.wikipedia.org/wiki/Hans_Sennholz
So on May 8th I started trading again in a small way and actually published the trade.
I did not really want to write this article, but I am convicted to do so since in my first article Blowing Out At The…medium.com
My goal was to resume trading in a small way and demonstrate in real time how a small trader becomes a large trader. . . as I have done it many times.
The trade did not work out and I realized that because trading is dynamic and not static, it is impossible to trade and give trading recommendations. I stayed with a trade I would have normally dumped had I not published it.
So I continued to actively trade, in a small way, with 7 bitcoin just treading water with a draw down to 3 bitcoin, until I was on the threshold of reaching OPM (Other People’s Money) at 8 bitcoin. I was in the grove. https://medium.com/@homeytel/finding-the-groove-4fb6767c6970
I carelessly began thinking I am so smart . . . the attitude was reflected in my post.
“You should if you have ears to hear. So you should know what I did today at shortly before the close, on the close, and shortly after the close. If you don’t know do your homework. I am not a babysitter, but I gladly teach those with ears who want to learn.”
A trend is emerging that simply cannot be ignored and seems to be accelerating. The education offered here and by other…medium.com
Well, guess what? On that day I took a sizable long position confident I was right.. . . woke up the next day . . to find myself in trouble . . . and decided to double down . . . instead of taking my lumps. . . and got blown out on the whipsaw day I recognized as a bottom.
None of these things were bad per se.
But my objective was to demonstrate in real time how a small trader can become a large trader . . . without refunding my account. . . and I failed miserably . . .
except for one thing . . . I did blow out. . .
shortly after recognized the bottom . . . with a very limited risk . . . and refunded with another 7 bitcoin. . . and repurchased slightly higher . . . but now with only half of the position that blew me out.
And this is important . . . you must reduce trading if your equity has been reduced . . . do not fall in love with being a large trader . . . develop the ability to become a small trader with the goal of being a larger trader . . . and when that goal is reached muster the discipline to be a small trader again. Do not allow being a large trader to feed your ego!
My point is that no matter how good (or bad) you are at analyzing a market . . .the results in trading center around risk management and money management. . . not your technical skills or market analysis. This is simply hard to fathom for most people. . .
I am frowning not because I did anything fundamentally wrong . . . but because I failed in following my own fundamental principles to achieve the objective of turning a small account into a large account without additional funding. Ego!
Again, you do not need sharp technical skills or market analysis to be a successful trader . . . the key to success is humility and money management.
Hope this helps.