Despite guessing the trajectory for Ethereum over the last few weeks quite successfully, my trading profits have been "okay," but not up to par with what I would accept as "worthwhile." I even opened a short two days ago at support but got stopped out, instead of following my plan and opening a long. Why is that? You can see my trades, in addition to my reasoning in this post:
This analysis is a little bit of a psychological study of myself. After all, much of my analysis up until this point has been a psychosocial exploration of collective human behavior and psychology. But it is hard to produce such material without experiencing the emotions and the second-guessing, and to some extent building more self-awareness. This post will hopefully help readers discover for themselves what works. In the end, it doesn't seem to be about predicting, but managing one's own behavior.
Here is the ETH/USD chart zoomed in on the 4H timeframe:
Looking at the above, it seems like it could either fail at the $1700 resistance again, or head back up towards $2k in time for the "merge." So again, it appears to be a guessing game. If I were still following this plan, I would actually attempt to scale into a short here, since the market seems to be overwhelmingly biased to the long side. Then, I would probably close that short quickly as soon as I see profit, since I do think price can still continue higher.
If you read my original post linked at the beginning of this article, you'll see I was able to get good entries consistently at resistance and support. But where could my performance have been better? CLOSING. I noticed that when I would see my trades well in profit, I had a tendency to think, "Well, what if this time the range fails and it breaks support?" In the 1400's, I felt that price could just sink lower to sub-$1000, so why would I close there when I got such a good entry? In simple terms, I would get greedy, right at my target levels.
The solution, if I were to continue day trading is quite clear: Always close in profit, and especially if price reaches a pre-determined target level. There is a reason traders use TA, and that is to create goalposts and manage behavior (not to predict). It doesn't matter how much the profit is. There is always another trade to be made, and it's better to build a habit of building your account up slowly, rather than trying to triple or quadruple it in a week. Granted, I ended up doubling the account overall, which still far outstrips the actual market performance since I began this day trading spree when ETH was $1800+. However, there was a moment when my account was nearly 4x yet I did not close my positions.
Ultimately, this proves that self-control and discipline are absolutely necessary. Bad day trading is way more common than "good" day trading. I'm an okay day trader, but it ultimately doesn't appear to be worth the time or stress. Instead, I like to look at broader economic cycles, as that tends to be where the greatest wealth is made. It was much easier for me to sell my crypto for life-changing money after waiting a few years than to sell short-term ETH positions for comparatively small profit. Maybe this means I should simply day trade with a larger amount. Just kidding.
I still maintain that we are near the end of a generational debt/wealth cycle that began after World War II. That is why I wait with cash, and tend to value personal connections and skills far more than immaterial assets. At any time, I would value these things more than immaterial assets. But at another time I would probably be more proactive with my investing. Right now, it seems like a sit and wait moment. In any case, I find the more someone values immaterial assets, the less present they are in the real world.
As I've mentioned, I have officially finished school and begun my career as a therapist. While I cannot legally advertise or provide therapy through here since I don't hold a clinical license (yet), I do feel that I can provide consultation and coaching for anyone who could use help managing emotions or overcoming addiction (particularly as it pertains to trading). I have done a lot of personal work and growth in this department, so I do have some legitimate insight to offer. If this is something that appeals to you, you know where to find me - my Twitter is linked and my DM's are open.
As always, thank you for reading. This is not meant as financial advice, but it represents my own thoughts and opinions. Please consult a professional financial advisor.
-Victor Cobra
This analysis is a little bit of a psychological study of myself. After all, much of my analysis up until this point has been a psychosocial exploration of collective human behavior and psychology. But it is hard to produce such material without experiencing the emotions and the second-guessing, and to some extent building more self-awareness. This post will hopefully help readers discover for themselves what works. In the end, it doesn't seem to be about predicting, but managing one's own behavior.
Here is the ETH/USD chart zoomed in on the 4H timeframe:
If you read my original post linked at the beginning of this article, you'll see I was able to get good entries consistently at resistance and support. But where could my performance have been better? CLOSING. I noticed that when I would see my trades well in profit, I had a tendency to think, "Well, what if this time the range fails and it breaks support?" In the 1400's, I felt that price could just sink lower to sub-$1000, so why would I close there when I got such a good entry? In simple terms, I would get greedy, right at my target levels.
The solution, if I were to continue day trading is quite clear: Always close in profit, and especially if price reaches a pre-determined target level. There is a reason traders use TA, and that is to create goalposts and manage behavior (not to predict). It doesn't matter how much the profit is. There is always another trade to be made, and it's better to build a habit of building your account up slowly, rather than trying to triple or quadruple it in a week. Granted, I ended up doubling the account overall, which still far outstrips the actual market performance since I began this day trading spree when ETH was $1800+. However, there was a moment when my account was nearly 4x yet I did not close my positions.
Ultimately, this proves that self-control and discipline are absolutely necessary. Bad day trading is way more common than "good" day trading. I'm an okay day trader, but it ultimately doesn't appear to be worth the time or stress. Instead, I like to look at broader economic cycles, as that tends to be where the greatest wealth is made. It was much easier for me to sell my crypto for life-changing money after waiting a few years than to sell short-term ETH positions for comparatively small profit. Maybe this means I should simply day trade with a larger amount. Just kidding.
I still maintain that we are near the end of a generational debt/wealth cycle that began after World War II. That is why I wait with cash, and tend to value personal connections and skills far more than immaterial assets. At any time, I would value these things more than immaterial assets. But at another time I would probably be more proactive with my investing. Right now, it seems like a sit and wait moment. In any case, I find the more someone values immaterial assets, the less present they are in the real world.
As I've mentioned, I have officially finished school and begun my career as a therapist. While I cannot legally advertise or provide therapy through here since I don't hold a clinical license (yet), I do feel that I can provide consultation and coaching for anyone who could use help managing emotions or overcoming addiction (particularly as it pertains to trading). I have done a lot of personal work and growth in this department, so I do have some legitimate insight to offer. If this is something that appeals to you, you know where to find me - my Twitter is linked and my DM's are open.
As always, thank you for reading. This is not meant as financial advice, but it represents my own thoughts and opinions. Please consult a professional financial advisor.
-Victor Cobra
