Shout out to everyone who is following me on this trade. If you missed my previous post on you should go back and check it out as these posts are directly correlated. Making educated trades means making peaceful trades.
FOMO and FUD are very real emotions that EVERYONE experiences as we embark on this journey. If you are anything like me we’ve excitedly hopped into a trade, and fearfully hopped out. Many times losing small cash positions with slightest move in the opposite direction. In the off chance our original “gamble” WAS right, the regret sinks in thinking “man if only I hung in there!” I’m done with this type of trading!!! I hope… ;)
6 Steps to maximize profits on our BTC short
*Step #1 - Risk vs Reward (red & blue back ground) I’ve learned this is an essential key to have in place for EVERY trade I make. (For an investment/HODL coin not so much, although I do believe you should know when to cut your loses) After our analysis is done, and we are ready to enter a trade, we should have a stop loss in place incase the market doesn’t move in our favor. Like @MarcPMarkets and many others have said, we don’t try to make the trade work, we just read the charts and act accordingly. For this trade I entered a at 4400, a little later lower than the 4450 I wanted but, we are in. Had this moved much higher than 4500, I would have been out.
*Step#2 - Market Structure - Confirm Trend lines (white) & Head and Shoulders pattern (yellow) Confirming a trend is important. I won’t say that we have 100% created a new trend however I will say that we have 100% broken the previous bull trend. At this point I am looking for lower highs’ and lower lows. @goldbug1 pointed out the potential head and shoulders pattern that is commonly seen in a bearish reversal.
*Step #3 - Add to position I’m sure there will be a varying opinions on this maneuver and I am open to feed back (from experienced traders that have proof of successful trades). A good friend of mine who has been trading for decades said to me “when you know you are right, feel free to give it some more gas” And that’s what I am looking to do here. If we see a small bounce back up to the 4325-4350 range I am looking at adding to this position. If it starts to move against our plan, we are hedged in our original position so we can avoid/minimize a loss. However if it continues to go in our direction… more $$$$$ which is the goal
*Step 4 - Profit Zones This ties into our Step #1 of Risk vs Reward. We have to have firm targets to lock in our profits. Please learn from my mistake. Just a few weeks ago I threw away a 14% profit because of greed for more and ended up at 0%. I over estimated the momentum in a short and didn’t withdraw at profits at $3500. It was a stupid move and reinforced my resolve to take profits. We can NEVER be mad at profits. Buying at the ultimate Apex and selling at the base is near impossible, we can’t squeeze all the juice out of an orange. Let’s be happy with PROFITS. Did I mention we should be happy with profit? In this case our goal is 10% with Our targets being $4125 for $25% and $4000 for 75%
*Step 5 - RSI (bullish divergence) As we mentioned in the previous post, RSI can be a great tool for monitoring overbought and over sold conditions. We are looking for lower lows on prices but higher lows on the RSI. This is a supporting indicator that momentum is about to turn in the opposite direction. In this case it would be called a bullish divergence.
*Step #6 - Volume Over all we are in a BULL market with BTC. There is no signs of any massive sell offs and returning to extremely low prices. Because of that, I am looking for selling pressure
you have al right cupidity is not good, it is necessary to follow its objectives to secure its profits and to minimize its losses, i made an error me too when btc is down to 3k, i wanted play a little rebond before the fall, this cost me so much, i missed my enter and sell without profit because was disappointed, an error than i no want more commit, because this is counterproductive and disorienting
SeanKimCDN
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when you say add the position, what do you mean by "adding"? I cant think of anything else other than entering into margin-short
Troy_Brave
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@SeanKimCDN, Hey Sean. Yes sir, on some exchanges you can use a margin trade.