This is the 1st post where I'm going to review my trading in the borders of the 1M Trading Challenge. I would like to share with you not only my trading results but also describe my thoughts, emotions, and ideas just in order to become an additional source of new experience and knowledge for you.
If you don't understand what I'm talking about and you didn't read my previous posts, please do it:
"Trade Challenge: I'm going to turn 10 000$ into 1 000 000$"
"How Much Time Takes to Reach $1 000 000?"
Also, I would like to use Bitcoin as an indicator, the crypto market index, and a tool measuring the crypto market movements and my trading results. So, from time to time, I will refer to Bitcoin and the price movements in the BTCUSD market.
So, if you could choose between how to start a new journey, you would pick an option to start it as good as possible. Because it is very important to keep the right motivation and confidence, and the perfect start allows us to do it.
As for trading, the perfect start is always related to profits and reaching important goals. Of course, I would like to start the 1st report describing how I reached the weekly goal in 5% of profit and how it was simple to trade in the crypto market using my best trading strategies.
But the truth is, the real market doesn't care what we want. We have to work in conditions which the market offers us.
These conditions may be good, or they can be against us. There are periods when the market allows us to make a profit. And there are periods when we have to do all our best to defend our capital as the market does the best to get our money. Definitely, the 1st week of 2022 wasn't perfect for making money for those who trade in the spot market.
The beginning of a new year in the financial markets is time with low volatility and unpredictable movement.
It is a well-known fact from the traditional markets, and the same goes for the crypto market.
That's why I preferred to skip 1-3 of January.
Planning my trades, I had to follow the sentiment from December 2021, where many times I drew your attention to low activity from the bullish side. I asked myself, "Where are active buyers? Why they don't buy assets with a good discount?" For me, it was a sign that the main buyers were not going to push the price to the new ATH . That's why I had to be very careful with any bullish signals.
If we look at the daily chart, in many markets we are in the bearish trend from TA point. But in spite of the bearish market conditions, I preferred to search for trade opportunities for buying.
Why?
We moved a lot from the ATHs, and a correction movement in the bearish market could provide us good trades from the local support. Also, when the market is oversold, and the price stays at the support, you have only two options, search for possible buying opportunities or do nothing. And I picked the 1st option as it is more interesting)
I had to search for the bullish signals mainly in the market with a neutral or bearish sentiment. Just a little bit of time, we could see bullish attempts to push the price upward. I considered the mainly neutral market sentiment and rather unpredictable market conditions and plan my trades accordingly. My risk per trade by default is 1-2% from the whole capital. Based on the market conditions, I used pending orders for buying to cut down the risk size and increase the room for the profitable movement. I decided to start from trades with 0.5% risk.
My trading plan combines swing and position trading approaches.
I use two different types of trading for diversification. I opened my 1st trade on the 5th of January, and it was a long swing trade in the BTCUSD market from $45 500 support. I decided to use all long positions with fixed stop orders as I thought that the market could move downward any time. I opened 2 swing trades in the BNBUSD and DOTUSD markets using reversal signals from the support and the hourly time frames. I should say there were reasons to open long positions even the market was rather unpredictable.
In several hours, we could see the 1st dump in 2022. I wasn't surprised when the price broke the support and moved to new lows. I had 3 active swing trades at that moment, and all of them were closed by stop orders. My idea to trade bullish setups from the support failed.
I decided to activate the part of my plan responsible for position trading.
I picked the most interesting assets with strong fundamentals and unrealized potential from TA point. I invested about 10% of my capital into DYDX, DODO, C98 , CQT , CLV . The idea was simple, to buy these tokens and build long positions step by step using DCA strategy. These tokens are in portfolios of the TOP venture funds. The projects are cool, and they may become something like a new Solana in the strong bullish market. I don't use stop orders for these positions, but I'm ready to optimize the position size if the crypto market continues the downward movement.
During the week, I also tried to open positions trades in the BTCUSD , ETHUSD , and DOTUSD markets. I picked the most reliable assets and combined them with reversal setups from the major support levels. Bitcoin reached $40 000 and Ethereum $3000 major support. Polkadot gave us a possible double bottom pattern. I opened three long positions with stops below the support levels and the local swing lows. I didn't expect a new trend starting from the support. But I planned to see at least a correction movement in the bearish market. I used daily charts for planning my trades.
As a result, what did I have after the 1st week of trading in 2022?
- 3 trades were closed by stops because of another dump
- active long positions in the BTCUSD , ETHUSD , DOTUSD markets
- 5 tokens with long-term goals, huge potential, and a plan to average the price with new lows
After the 1st week of work, drawdown of the trading account was something about 4%. Bitcoin for the same period moved downward by 16%, Ethereum and BinanceCoin about 20%. I'm glad that my performance is better than the crypto market result for the same period.
During the week, there were things that I liked
I like that I used the right risk and money management strategy. I cut down the risk per trade, and it allowed me to avoid deeper drawdown. I used stop orders, and it allowed me to exit from long positions during the 1st 2022 dump. I like that I have about 80% in fiat, and I control the whole situation. If the price moved to new lows, I have more than enough fiat for swing and position trades.
During the week, there were things that I didn't like
I need to optimize the placing of stop orders. I don't like situations with false breakouts when the price reaches your stop, reverses, and moves in the right direction after that. I'm thinking about adding the ATR indicator and using it for placing stop orders. I don't like the situation that I had a wish to rush with some trades. It wasn't the classic FOMO feeling. But it was the wish to try different trading setups in different markets. Thanks to my trading plan and high responsibility, I could stop myself from additional trades as they could add % to my drawdown. It is simple, when the market is unpredictable, don't force trades! Be very careful!
About emotions
I'm very glad that I decided to start this trading challenge. I see the benefits for myself after the 1st week already. Public trading makes me very responsible for the trading result and proper trading. It pushes me to think a lot before any trading decision and skip high-risk trades. I like the approach I follow now that Quality is better than Quantity. It doesn't allow to be overloaded by emotions when you have a lot of different trades, and not all of them are profitable.
Also, I have to say about your feedback. It is amazing! Thanks a lot for it!
It keeps my motivation to do my job as good as possible! In spite of the rather uncomfortable market conditions, the local drawdown, I believe that it is possible to match the average weekly and monthly goals in the distance. Let's do it!
I will be grateful if you share your feedback in the comments. From your point, how would you improve your trading in unpredictable market conditions? Would you use stop orders or just Buy & Hold strategy? What about your performance for the 1st week of 2022?
If you don't understand what I'm talking about and you didn't read my previous posts, please do it:
"Trade Challenge: I'm going to turn 10 000$ into 1 000 000$"
"How Much Time Takes to Reach $1 000 000?"
Also, I would like to use Bitcoin as an indicator, the crypto market index, and a tool measuring the crypto market movements and my trading results. So, from time to time, I will refer to Bitcoin and the price movements in the BTCUSD market.
So, if you could choose between how to start a new journey, you would pick an option to start it as good as possible. Because it is very important to keep the right motivation and confidence, and the perfect start allows us to do it.
As for trading, the perfect start is always related to profits and reaching important goals. Of course, I would like to start the 1st report describing how I reached the weekly goal in 5% of profit and how it was simple to trade in the crypto market using my best trading strategies.
But the truth is, the real market doesn't care what we want. We have to work in conditions which the market offers us.
These conditions may be good, or they can be against us. There are periods when the market allows us to make a profit. And there are periods when we have to do all our best to defend our capital as the market does the best to get our money. Definitely, the 1st week of 2022 wasn't perfect for making money for those who trade in the spot market.
The beginning of a new year in the financial markets is time with low volatility and unpredictable movement.
It is a well-known fact from the traditional markets, and the same goes for the crypto market.
That's why I preferred to skip 1-3 of January.
Planning my trades, I had to follow the sentiment from December 2021, where many times I drew your attention to low activity from the bullish side. I asked myself, "Where are active buyers? Why they don't buy assets with a good discount?" For me, it was a sign that the main buyers were not going to push the price to the new ATH . That's why I had to be very careful with any bullish signals.
If we look at the daily chart, in many markets we are in the bearish trend from TA point. But in spite of the bearish market conditions, I preferred to search for trade opportunities for buying.
Why?
We moved a lot from the ATHs, and a correction movement in the bearish market could provide us good trades from the local support. Also, when the market is oversold, and the price stays at the support, you have only two options, search for possible buying opportunities or do nothing. And I picked the 1st option as it is more interesting)
I had to search for the bullish signals mainly in the market with a neutral or bearish sentiment. Just a little bit of time, we could see bullish attempts to push the price upward. I considered the mainly neutral market sentiment and rather unpredictable market conditions and plan my trades accordingly. My risk per trade by default is 1-2% from the whole capital. Based on the market conditions, I used pending orders for buying to cut down the risk size and increase the room for the profitable movement. I decided to start from trades with 0.5% risk.
My trading plan combines swing and position trading approaches.
I use two different types of trading for diversification. I opened my 1st trade on the 5th of January, and it was a long swing trade in the BTCUSD market from $45 500 support. I decided to use all long positions with fixed stop orders as I thought that the market could move downward any time. I opened 2 swing trades in the BNBUSD and DOTUSD markets using reversal signals from the support and the hourly time frames. I should say there were reasons to open long positions even the market was rather unpredictable.
In several hours, we could see the 1st dump in 2022. I wasn't surprised when the price broke the support and moved to new lows. I had 3 active swing trades at that moment, and all of them were closed by stop orders. My idea to trade bullish setups from the support failed.
I decided to activate the part of my plan responsible for position trading.
I picked the most interesting assets with strong fundamentals and unrealized potential from TA point. I invested about 10% of my capital into DYDX, DODO, C98 , CQT , CLV . The idea was simple, to buy these tokens and build long positions step by step using DCA strategy. These tokens are in portfolios of the TOP venture funds. The projects are cool, and they may become something like a new Solana in the strong bullish market. I don't use stop orders for these positions, but I'm ready to optimize the position size if the crypto market continues the downward movement.
During the week, I also tried to open positions trades in the BTCUSD , ETHUSD , and DOTUSD markets. I picked the most reliable assets and combined them with reversal setups from the major support levels. Bitcoin reached $40 000 and Ethereum $3000 major support. Polkadot gave us a possible double bottom pattern. I opened three long positions with stops below the support levels and the local swing lows. I didn't expect a new trend starting from the support. But I planned to see at least a correction movement in the bearish market. I used daily charts for planning my trades.
As a result, what did I have after the 1st week of trading in 2022?
- 3 trades were closed by stops because of another dump
- active long positions in the BTCUSD , ETHUSD , DOTUSD markets
- 5 tokens with long-term goals, huge potential, and a plan to average the price with new lows
After the 1st week of work, drawdown of the trading account was something about 4%. Bitcoin for the same period moved downward by 16%, Ethereum and BinanceCoin about 20%. I'm glad that my performance is better than the crypto market result for the same period.
During the week, there were things that I liked
I like that I used the right risk and money management strategy. I cut down the risk per trade, and it allowed me to avoid deeper drawdown. I used stop orders, and it allowed me to exit from long positions during the 1st 2022 dump. I like that I have about 80% in fiat, and I control the whole situation. If the price moved to new lows, I have more than enough fiat for swing and position trades.
During the week, there were things that I didn't like
I need to optimize the placing of stop orders. I don't like situations with false breakouts when the price reaches your stop, reverses, and moves in the right direction after that. I'm thinking about adding the ATR indicator and using it for placing stop orders. I don't like the situation that I had a wish to rush with some trades. It wasn't the classic FOMO feeling. But it was the wish to try different trading setups in different markets. Thanks to my trading plan and high responsibility, I could stop myself from additional trades as they could add % to my drawdown. It is simple, when the market is unpredictable, don't force trades! Be very careful!
About emotions
I'm very glad that I decided to start this trading challenge. I see the benefits for myself after the 1st week already. Public trading makes me very responsible for the trading result and proper trading. It pushes me to think a lot before any trading decision and skip high-risk trades. I like the approach I follow now that Quality is better than Quantity. It doesn't allow to be overloaded by emotions when you have a lot of different trades, and not all of them are profitable.
Also, I have to say about your feedback. It is amazing! Thanks a lot for it!
It keeps my motivation to do my job as good as possible! In spite of the rather uncomfortable market conditions, the local drawdown, I believe that it is possible to match the average weekly and monthly goals in the distance. Let's do it!
I will be grateful if you share your feedback in the comments. From your point, how would you improve your trading in unpredictable market conditions? Would you use stop orders or just Buy & Hold strategy? What about your performance for the 1st week of 2022?
Comment:
During an attempt to break the major support this Monday, the price reached the stops of Ethereum and Polkadot long positions. These trades were closed and the whole drawdown became about 5.3%. I will wrote about this situation in the next report.
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💎 Share My BEST Trades here 👉 bit.ly/wubits
