mortezaemzajerdi

EOSUSD: A Successful Leveraged Position Guide

Education
BINANCE:EOSUSD   EOS / US Dollar (calculated by TradingView)
I was waiting for Doge to reach for 1 USD when I heard that Mark Cuban shorted it! Strange! Right?! There are some important points to be noted here, but I would name it "Probabilistic Mathematical Approach to Trading" as follows (even the Psychologicals of Trading):

1. How Mathematically it was Probable for Doge to grow from 0.77 to 1 USD?

2. Mathematically how much more it could manage to grow - I mean in percentages?

3. We are being told about how risky it is to open leveraged positions. Yes! They are too risky and yet highly profitable.

4. Based on the 90,90,90 Principle 90% of trader lose 90% of their wealth during the 1st 90 days! It is meant to be profitable for professionals who know several things:
4.1. Capital/Money Management
4.1.1. Always save 30% of your available money for things that might happen and you have no idea of. You are going to need that money:
4.1.1.1. Firstly, your prediction on the direction in one certain "TIMEFRAME" might turn to be wrong. Then based on that timeframe you may spot some part of that money.
4.1.1.2. When things go wrong you will not go bankrupt.

4.2. Risk Management
4.2.1. You need to "CALCULATE" Risk/Reward Ratio just before any trade based on you Trading Timeframe. It cannot be more less 1/4. This is very important to consider.
4.2.2. Just consider KEY SUPPORT/RESISTNCE Levels/Clusters - Dynamically & Statically (short near a strong Resistance & vice versa)
4.2.3. With a certain amount of money which has already been dividend into say 3 parts you may Long as follows (see the chart):

* For every position calculate the Risk/Reward Ratio;

- Long at the current Market Price with 3 - 5X : price needs to drop 30 - 20% for you to be liquidated. I longed EOS at 3.29 yesterday. (targeted at 20USD)
- Set a Stop-limit long at a lower price which is overlapping at least 5% of your previous position. I longed EOS at 2.6 as well. (targeted the same)
- Propose the Worst Case Scenario now long it with 3 - 5X. How possible is it to happen? I longed EOS at even 1.34!!! (targeted the same)

This is "Technical trading Mathematics" I am talking about.

4.3. Psychologicals of trading
4.3.1. Psychology of Trading is a SCIENCE. You do need to study about it. Observe the behavior of your specific property.
4.3.2. The market is being Manipulated and has been so ever. There are people whose profit lays in your loss. But, exactly, how powerful are they to impact a specific property?! But the most average & common that has higher turnovers during certain periods of time. Market Cap/Turnover during a certain time interval.
4.3.3. When you are assured that Bitcoin is the most frequently traded one, for example, then you need to know exactly based on the timeframe you have chosen, how much it can be fluctuated?! For instance, in 4H timeframe basis. You need to know the extents of your chosen time frame.

How probable is it to lose all the money?
How probable is it to earn enough to not only compensate probable losses, but also earn much more?

5. Last and not the least, is Reverse Trading Strategy. Earn from long and then earn from shorts when it is the time to do so based on your Tradin Timeframe.

I do believe this way there would be no loss if you know the followings in summary:
1. Mathematically Trading
1.1. Money Management
1.2. Risk Management
1.3. Psychologicals of Trading
1.4. Technicals (the choice of trading time frame; the Elliots; Key Dynamic/Static Support/Resistance Clusters; Volume ; Trendlines & Price Movement Channels)

Now, a question comes to mind: If my scenario is going to work for EOS how much loss and/or profit I will have? Provided that out of my calculations applied in sample trading positions mentioned above I win/lose one or two?!

Always remember that you need a predefined Investment/Trading Portfolio Management Plan which requires the followings (PMI PMBOK):

1. Knowledge Areas
2. Processes
3. Tools & Techniques

Some positions are meant to be considered "diamond handed" like a routine business operation, yet some others need to be like BPR Projects and they need to be timely & agile.



(This is a tricky business cause it has its roots in human greed & fear.)


Comments

Thanks for the commentary, I appreciate your insight.
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mortezaemzajerdi lolimssulose
@lolimssulose, you are very welcome.
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