Lessons of the future
After spot trading in the cryptocurrency market last year, I felt I was ready for the Futures market. Clearly, with my level of knowledge and experience, there’s still so much to learn…
I keep realizing more often that the most valuable currency is time. If this holds true, and we wait for the moment when absolutely everything is ready, we shall never begin. Isn’t that how the saying goes?
As easy as I made it sound, it actually wasn’t. As my week in the futures market has been extremely rewarding and thrilling, I can’t say it was all green. In fact, this entry will focus on one of my red days, where I’ve made some mistakes and try to assess how we can sharpen the blade for our next strike
Bear in mind, I wasn’t going into the market blindly. I do have some level of experience and knowledge in the markets as I mentioned and posted in my recent entries. I’ve got some great friends & guidance behind me & I actively DMOR. Trading also happens to run in the family as my Dad used to trade Forex in the 90’s, and my brother who is actively participating in the markets as well.
Now as we all know, hindsight is 20/20. Let’s have a look at my short-term trade with AVAX.
By the end of February, many coins were poised for a breakout, and possibly a trend reversal. Unfortunately, that was rejected after a short-lived bull run during the first week of March. Having the capability of shorting some familiar coins, AVAX was my short of choice.
The first few trades went extremely well. I secured my positions close to the top and slowly strengthened my positions as my analysis came closer to confirmation. Once the down trend had started, I was already in a good spot.
After securing my profit is where the mistake happened. Instead of allowing the impulse to fully take form after the drop, roughly around the 261.80% Fib level, I had gone back in too early which would cost me my capital.
Ideally, a more sound approach is to let patience rule for this period. Though excitement & the happy hormones of making the right call can cloud our judgement, it would probably be best to do a thorough check on all your indicators & redraw your chart. Leverage can either go with you or against you, and that doesn’t just go for money. Time, emotions, these are all leveraged as well, we have to understand that — the right call; extreme joy, less time to grow your capital, and more returns of course.
With a bad call though — extreme anxiety, frustration, more time qill be required to rebuild, and less returns of course.
A few key points to remember
- Learn how to use the Fib Retracement tool & Trend-based Fib
- For beginners, unless you have an entry/exit route or map planned out, it’s best to re-chart & re-analyze your play before going back in to avoid controllable losses.
- Even though you have confirmed the general trend, you will still need to determine the best ranges in order to succeed in trading, most especially if leveraged. (Always seek the best price)
- The larger your leverage, the more accurate your calls must be.
- I have found the least anxiety & self-doubt and more confidence with my analysis when I strengthen my position ONLY when my initial position is green — this way, my only risk would now be my profit.
Leverage wisely, friends.
Full link to TA is below
