Anatomy of LUNA's technical breakdown - a painful meta-analysis
LUNA (and UST) rocked the (crypto) markets last week, and hogged the headlines. There were many who got wiped out, and the prospect of recovery appears very remote, if at all.
Here I would like to share why I chose LUNA to be a major part of my portfolio, entered and managed the trade (I would not term this as an investment, really). I hope that this sharing can be a good starting learning point of some fundamental factors that we all need in risk management.
Luck comes along with hard work and preparation, so just keep at the good stuff, always.
For the early part of 2022, a triangle pattern was forming with LUNA, following LUNA's surge in late 2021. Had missed the breakout in late February and had to wait for some pullback, which was shallow. Entry was taken as there was about 50% more of the projected target (see green arrows). MACD and RPM was favourable at that time too.
A surge pushed LUNA closer to target and about 60% was taken off, since entry was significantly large of my portfolio, and this was redistributed elsewhere.
A retracement took place and almost closed the trade, but one day more made a difference with yet another surge. This time, it got closer to the projected target but retraced just before. Had decided to project the next target level, and kept trade open for the time. LUNA was performing well about this time too, so that was a consolation.
In early April, again, it failed to reach projected target and I had decided to allow this to bake longer as the remainder of LUNA that I had, I was willing to hold longer.
Then the technical breakdowns started...
It returned to the near the entry price, and if it went below further for a day more, I would take it off. Yet again, a surge off that (critical) support level happened. It was very clear that this is now my OSL... LUNA spiked to break above the 55EMA, and reach a resistance in three days, and then consolidated, as bullish technicals faded away slowly.
Yet another retracement was effected, after a lower high, no less, and tested the critical support OSL again. A short bounce ensued, and this time, as it failed the resistance, and perhaps more importantly, the 55EMA. Furthermore, the RPM was turning bear, adn MACD was weak. So, I decided that it was enough.
Closed out the last 40%, meant for longer term hold, and walked away happy.
Started to take notice that LUNA was getting into the news, initially saw UST, and then LUNA got mentioned more.
Barely two days after closed trade, LUNA depreciated so much that it was clear something was not right. Technically, the bears were moving and fundamentally, some serious shit was happening.
Then it broke the critical support, aka OSL.
And that was it... free fall.
Then we started reading about many who lost fortunes from this breakdown.
Few personal takeaways I have to share, in good faith:
1. It is a trade, not an investment, so keep an eye on crypto positions always. Volatility is part of crypto and it must be accepted, monitored and managed;
2. Read more about what you buy, and keep abreast of its developments. Apparently, a lot about the UST peg was criticized, and admittedly, I read none of those prior;
3. Have good technical analyses and keep a simple set of rules for engagement;
4. If always make sure your tokens are nimble, even if you are staking. A quick retrieval to sell off if and when required is needed. The amount of time you need must be overestimated, and so you know that you need to act eariler, rather than later; and
5. Always have that sacred OSL, and respect that if it is ever broken, you also need to break off the trade.
The last point is by far the MOST IMPORTANT takeaway.
I kept to mine, and it saved me, unwittingly.
Many others, even in the equities market, have asked of late, what to do...
Thing here is, we need the solution before the market tanks; we know the solution(s) too. So, need to form the habit of letting go when it is time, so that we are free to move along and recover.
As we go through the next weeks recovering our wounds, I hope that you find it in your spirit to understand what happened, both external and internal. And we can only control the control-ables (internal), namely, our actions. So develop a set of steady rules, keep to it, and always have that OSL. It is a live saver.
I shared the above, in good faith, as I think it need to put out my learning points of the weekend. I do beg your pardon if it rubbed on sore points, and if it did, it means it needs tending. Read, analyze, and discuss... I believe that there is enough of a community there to help each of us get better.
2022 is a more volatile year, good for those who know how to manage.
God bless and take care.
Here I would like to share why I chose LUNA to be a major part of my portfolio, entered and managed the trade (I would not term this as an investment, really). I hope that this sharing can be a good starting learning point of some fundamental factors that we all need in risk management.
Luck comes along with hard work and preparation, so just keep at the good stuff, always.
For the early part of 2022, a triangle pattern was forming with LUNA, following LUNA's surge in late 2021. Had missed the breakout in late February and had to wait for some pullback, which was shallow. Entry was taken as there was about 50% more of the projected target (see green arrows). MACD and RPM was favourable at that time too.
A surge pushed LUNA closer to target and about 60% was taken off, since entry was significantly large of my portfolio, and this was redistributed elsewhere.
A retracement took place and almost closed the trade, but one day more made a difference with yet another surge. This time, it got closer to the projected target but retraced just before. Had decided to project the next target level, and kept trade open for the time. LUNA was performing well about this time too, so that was a consolation.
In early April, again, it failed to reach projected target and I had decided to allow this to bake longer as the remainder of LUNA that I had, I was willing to hold longer.
Then the technical breakdowns started...
It returned to the near the entry price, and if it went below further for a day more, I would take it off. Yet again, a surge off that (critical) support level happened. It was very clear that this is now my OSL... LUNA spiked to break above the 55EMA, and reach a resistance in three days, and then consolidated, as bullish technicals faded away slowly.
Yet another retracement was effected, after a lower high, no less, and tested the critical support OSL again. A short bounce ensued, and this time, as it failed the resistance, and perhaps more importantly, the 55EMA. Furthermore, the RPM was turning bear, adn MACD was weak. So, I decided that it was enough.
Closed out the last 40%, meant for longer term hold, and walked away happy.
Started to take notice that LUNA was getting into the news, initially saw UST, and then LUNA got mentioned more.
Barely two days after closed trade, LUNA depreciated so much that it was clear something was not right. Technically, the bears were moving and fundamentally, some serious shit was happening.
Then it broke the critical support, aka OSL.
And that was it... free fall.
Then we started reading about many who lost fortunes from this breakdown.
Few personal takeaways I have to share, in good faith:
1. It is a trade, not an investment, so keep an eye on crypto positions always. Volatility is part of crypto and it must be accepted, monitored and managed;
2. Read more about what you buy, and keep abreast of its developments. Apparently, a lot about the UST peg was criticized, and admittedly, I read none of those prior;
3. Have good technical analyses and keep a simple set of rules for engagement;
4. If always make sure your tokens are nimble, even if you are staking. A quick retrieval to sell off if and when required is needed. The amount of time you need must be overestimated, and so you know that you need to act eariler, rather than later; and
5. Always have that sacred OSL, and respect that if it is ever broken, you also need to break off the trade.
The last point is by far the MOST IMPORTANT takeaway.
I kept to mine, and it saved me, unwittingly.
Many others, even in the equities market, have asked of late, what to do...
Thing here is, we need the solution before the market tanks; we know the solution(s) too. So, need to form the habit of letting go when it is time, so that we are free to move along and recover.
As we go through the next weeks recovering our wounds, I hope that you find it in your spirit to understand what happened, both external and internal. And we can only control the control-ables (internal), namely, our actions. So develop a set of steady rules, keep to it, and always have that OSL. It is a live saver.
I shared the above, in good faith, as I think it need to put out my learning points of the weekend. I do beg your pardon if it rubbed on sore points, and if it did, it means it needs tending. Read, analyze, and discuss... I believe that there is enough of a community there to help each of us get better.
2022 is a more volatile year, good for those who know how to manage.
God bless and take care.