2 BTC to 20 BTC Trading Challenge - Day 6 (1.737 BTC)
Disclaimer: If you are primarily interested in copying other people’s trades then this is not for you. However, if you are willing to put in the work that it takes to learn how to trade for yourself then you have found the right place! Nevertheless please be advised that you can give 10 people a profitable trading strategy and only 1-2 of them will be able to succeed long term. If you fall into the majority that tries and fails then I assume no responsibility for your losses. Please be advised that I trade on high leverage and am comfortable with the risks. What you do with your $ is your business, what I do with my $ is my business.
Click here for my Comprehensive Trading Strategy | Click here for my Comprehensive Trading Process | Click here to learn about the 2 BTC' to 20 BTC' Trading Challenge
It's been another long day today. I'm not drinking tonight either and at this moment I would really enjoy a cold one. This certainly isn't how I wanted to start this challenge but it's way too early to get worried. The big positions I have are short SPX500 and long USDTRY. Those look like they are in bad shape but I still have big hopes for a turn around in the next week. If one of those positions goes in my favor then it should make up for all the losses that I've taken so far.
I think this week is very important for anyone who is trying something new this year. I don't think most people who make New Year's resolutions make it past the first week or two and that is usually because it doesn't feel like the results are matching the effort. Good thing I know that anyone who has made it this far in BTC has far more resilience than that. Through experience we know that by remaining resolute, consistent and disciplined we will achieve our goals.
Open Positions
Long: XBTM19
*1/3/19 SCALE OUT: P < S MA = 5%
*1/6/19 ADJUSTED STOP: Stop moved to breakeven
Price: $3,727
Projected Risk (due to horizontal support): None. Market stop adjusted to breakeven.
Leverage: 10X
Exposure: $3,541
Margin: 0.957 BTC
Unrealized PnL: -0.0266 BTC
Realised PnL: +0.001 BTC
Long: USDTRY
Price: $5.55804
Projected Risk: 5.66%
Leverage: 100X
Exposure: 0.16 lots ($16,000)
Margin: 0.048 BTC
Unrealized PnL: -0.176 BTC
Notes: P < S MA is a signal from Consensio to scale out 5%. However this is a Hyperwave and that supersedes Consensio in regards to exiting. Hyperwave waits for a weekly close below the phase line and exits fully. Consensio is used for entering Hyperwaves because Hyperwave doesn’t have objective entry guidelines (as far as I know).
Long: USDZAR
*1/3/19 SCALE OUT: P < S MA = 5%. However minimum available to scale out was 8%
*1/6/19 SCALE OUT: P < S MA (5%) + Bearish M MA (30%) + Bearish Cross with S & M MA’s (15%) + P < flat L MA (25% - 50%)
Price: $14.48
Projected risk: Market stop set at $13.49
Leverage: 100X
Exposure: 0.06 lots ($6,000)
Margin: 0.0157 BTC
Unrealized PnL: -0.05578 BTC
Realized PnL: -0.0531 BTC
Notes: Flat L MA leaves some discretion. Could choose to scale out 75% (holding onto 25% due to golden cross) or I could choose to only scale out 50%. I chose the latter due to being at horizontal support. The very bullish 200 MA gives me confidence in this position. I have set a stop for the rest of the position at $13.49.
Long: USDHUF
*1/4/19 ADD TO POSITION: S MA made bullish cross with M MA = 15% added
*1/6/19 SCALE OUT: P < S MA (5%) + P < Bearish M MA (30%) = 35% scaled out
Price: $282.66
Projected Risk: Market stop set at $279.33
Leverage: 100X
Exposure: 0.63 lots ($63,000)
Margin: 0.1657 BTC
Unrealized PnL: -0.0983 BTC
Realized PnL: -0.031745 BTC
Notes: Intended to add 0.08 lots on 1/4/19 and instead added 0.8 lots. Big mistake that could end up costing me huge. Have set market stop loss at $279.33 to ensure that it doesn’t get away from me too much.
Short: SPX500
*1/4/19 ADD TO POSITION: S MA making bearish cross with M MA = 15% added
*1/6/19 SCALE OUT: P > S MA (5%) + bullish M MA (30%) + Bullish cross with S & M MA’sl (15%) = 50%
Price: $2,472.62
Projected Risk (horizontal resistance at $2,650): 7.17%
Leverage: 100X
Exposure: 0.09 lots ($22,276)
Margin: 0.0586 BTC
Unrealized PnL: -0.153 BTC
Realized PnL: -0.129 BTC
Notes: Botched this trade due to miscalculating the projected risk (see Worst Dressed List below).
Short: EURUSD
*1/3/19 Scale out 25% due to close > Long MA
Price: 1.13387
Projected Risk (horizontal resistance): 1.4%
Leverage: 100:1
Exposure: 0.24 lots ($24,000)
Margin: 0.063 BTC
Unrealized PnL: -0.0355 BTC
Realized PnL: -0.012 BTC
Notes: Adjusted projected risk and set a market stop loss at 1.15010. If that gets triggered then I will lose approximately 0.09 BTC. That is about twice as much as I want to risk based on the Consensio guidelines and that is because I did not do a good job of projecting risk yesterday. This position is an early front runner for January’s Worst Dressed List.
Closed Positions
Long: XRPM19
*1/3/19 SCALE OUT: P < S MA = 5%
*1/6/19 CLOSE OUT: P < S MA < flat L MA < bearish M MA
Enter: 0.00009702
Exit: 0.00009177 & 0.00009228
Exposure: 5,385 Ripple (0.522 BTC)
Realized PnL: -0.0302 BTC
Notes: Even though Consensio signaled an entry I should have waiting for breakout of ascending triangle / c&h and should have been ready with a stop entry. However since risk was properly managed and I stuck to the guidelines I feel good about this trade.
Watchtower
ETHUSD: I am bullish until Constantinople Hard Fork. Buying the hype, and selling the news. Consensio is bullish but waiting for c&h to confirm + TL breakthrough. Waiting to enter due to price being up > 8% in last 24 hours combined with unfavorable r:r.
ETHBTC: Weekly Descending triangle that found support from prior ATH’s. Expecting huge volatility once it breaks. Passing on entries until a daily candle closes above or below.
XAUUSD: Price back above trendline and appears to be turning it back into support. However it is also getting dangerously close to breaking down the parabolic advance. It it does then an 80% decline would be expected which would indicate a return to $1,200. The RSI is pulling back from overbought territory. Watch for a bear div.
USDCAD: Really like seeing these hard / fast pullbacks when the enter a confluence of support. The Canadian Dollar is currently testing prior highs for horizontal support and the trendline waits right below. The L MA is very bullish and is also apart of this cluster of support. Being this far away from the S & M MA’s is a strong indication of short term oversold conditions. The only problem is that it could take a while before Consensio signals an entry.
Best and Worst Dressed Trades from 1/1/19 through 1/6/19
Worst Dressed
SPX500 Short
The trade that I am least pleased about is my S&P 500 short. The primary reason for my dismay is the expected risk that I used. I used horizontal resistance at $2,520 to determine my expected risk and thus my leverage and exposure.
I knew for sure that I would want to hold onto this position through $2,600 due to the neckline from the h&s as well as the very bearish 33 MA. I should tend to be even more conservative then that and would like if I used $2,650 to calculate my expected risk.
The reason I didn’t use the correct number to calculate my risk was primarily. The tighter the expected risk I go with the more leverage and exposure it allows me. I am very confident that the S&P has entered a bear market and I am expected a big move to the downside over the next few months. Therefore I am inclined to max out my exposure on this trade.
I am used to trading with strict stop losses and that is the biggest difference for me with Consensio. There will definitely be a learning curve.
That miscalculation has put me in a very bad spot. The unrealized profit on this trade is currently -0.153 BTC and I will not be getting any more signals from Conensio to exit as long as we are below the bearish L MA.
If the price does rally to $2,650 before I am able to fully scale out then I would be looking at a ~0.5 BTC loss on this trade. Absolutely unacceptable to risk ~25% of my Challenge bankroll on one position. It should be nearer a fifth or a tenth of that at risk.
There should be a lot of resistance at $2,600 and I will be watching closely for that to hold. If it does then this could quickly turn into a very profitable position and alleviate a lot of the anxiety that it is causing me.
USDHUF Long
This was more of an honest mistake that I will not beat myself too much over. I go through dozens of calculations per day to determine how to manage my positions / cash. A mistake is bound to happen. Unfortunately this mistake is a scary one, exposing $80,000 instead of $8,000 that should have been.
If the Hungarian Forint moved against me on Friday (like most of the USD longs did) then it would have put me into a world of hurt and would have cost me more than 10% of my bankroll. Luckily that didn’t happen and I am able to start scaling out, due to Consensio, today.
Since this was not done out of greed I am not as worried about it. Nevertheless I will do my best to be more careful next time.
Best Dressed
ZAR (didn’t overexpose), BTC (was patient, stuck with the game plan, didn’t overexpose)
USDZAR Long
This is a trade that has had me drooling over the past few weeks. If US equities enter bear market then the USD should rally. I am bearish the stock market and bullish the USD. When bullish the USD I like to long it against the weakest currencies that I can find, TRY, ZAR, MXN, instead of the more common EUR, JPY GBP pairs.
The South African Rand formed a very nice cup and handle throughout 2018 and finally brokethrough the bear trendline on August. It then proceeded to consolidate in a bull flag type of pattern above the trendline and cup and handle.
Furthermore the 200 MA is in a very bullish posture. With all of those factors combined I was / am about as bullish as can be on USDZAR.
The price recently spent a few weeks above the flag pattern and it would have been very easy for me to get greedy and overexpose myself like I did with the SPX500 short. Eventhough this trade has moved against me significantly that is okay because my risk is properly managed.
It isn’t a great feeling when the first up on my best dressed list is a big loser but that is okay because I am sticking to the process and learning from my mistakes.
BTC Long
If I am not mistaken this is my only position that is currently in the green and therefore I felt obliged to include it on this list. There were a number of reasons why I prefered to look for shorts on BTC (see Daily Update from last few days). Mainly due to the built up resistance from $4,000 - $4,200, the thick Ichimoku Cloud, as well as most people seeing the i h&s / c&h and my lack of belief in patterns that most recognize.
Nevertheless I stuck to Consensio and entered the long due to the L MA turning slightly bullish, the golden cross, the bullish cross with the S & M MA. This is a great example of why it is extremely important to stick to a system and not let personal feelings / emotions get in the way.
When positions move against you it is important not to take it personally and when they go in your favor it is important to control feelings of euphoria / ego. Knowing that the system you are trading is what got you in those positions can make all of the difference in the world.
Click here for my Comprehensive Trading Strategy | Click here for my Comprehensive Trading Process | Click here to learn about the 2 BTC' to 20 BTC' Trading Challenge
It's been another long day today. I'm not drinking tonight either and at this moment I would really enjoy a cold one. This certainly isn't how I wanted to start this challenge but it's way too early to get worried. The big positions I have are short SPX500 and long USDTRY. Those look like they are in bad shape but I still have big hopes for a turn around in the next week. If one of those positions goes in my favor then it should make up for all the losses that I've taken so far.
I think this week is very important for anyone who is trying something new this year. I don't think most people who make New Year's resolutions make it past the first week or two and that is usually because it doesn't feel like the results are matching the effort. Good thing I know that anyone who has made it this far in BTC has far more resilience than that. Through experience we know that by remaining resolute, consistent and disciplined we will achieve our goals.
Open Positions
Long: XBTM19
*1/3/19 SCALE OUT: P < S MA = 5%
*1/6/19 ADJUSTED STOP: Stop moved to breakeven
Price: $3,727
Projected Risk (due to horizontal support): None. Market stop adjusted to breakeven.
Leverage: 10X
Exposure: $3,541
Margin: 0.957 BTC
Unrealized PnL: -0.0266 BTC
Realised PnL: +0.001 BTC
Long: USDTRY
Price: $5.55804
Projected Risk: 5.66%
Leverage: 100X
Exposure: 0.16 lots ($16,000)
Margin: 0.048 BTC
Unrealized PnL: -0.176 BTC
Notes: P < S MA is a signal from Consensio to scale out 5%. However this is a Hyperwave and that supersedes Consensio in regards to exiting. Hyperwave waits for a weekly close below the phase line and exits fully. Consensio is used for entering Hyperwaves because Hyperwave doesn’t have objective entry guidelines (as far as I know).
Long: USDZAR
*1/3/19 SCALE OUT: P < S MA = 5%. However minimum available to scale out was 8%
*1/6/19 SCALE OUT: P < S MA (5%) + Bearish M MA (30%) + Bearish Cross with S & M MA’s (15%) + P < flat L MA (25% - 50%)
Price: $14.48
Projected risk: Market stop set at $13.49
Leverage: 100X
Exposure: 0.06 lots ($6,000)
Margin: 0.0157 BTC
Unrealized PnL: -0.05578 BTC
Realized PnL: -0.0531 BTC
Notes: Flat L MA leaves some discretion. Could choose to scale out 75% (holding onto 25% due to golden cross) or I could choose to only scale out 50%. I chose the latter due to being at horizontal support. The very bullish 200 MA gives me confidence in this position. I have set a stop for the rest of the position at $13.49.
Long: USDHUF
*1/4/19 ADD TO POSITION: S MA made bullish cross with M MA = 15% added
*1/6/19 SCALE OUT: P < S MA (5%) + P < Bearish M MA (30%) = 35% scaled out
Price: $282.66
Projected Risk: Market stop set at $279.33
Leverage: 100X
Exposure: 0.63 lots ($63,000)
Margin: 0.1657 BTC
Unrealized PnL: -0.0983 BTC
Realized PnL: -0.031745 BTC
Notes: Intended to add 0.08 lots on 1/4/19 and instead added 0.8 lots. Big mistake that could end up costing me huge. Have set market stop loss at $279.33 to ensure that it doesn’t get away from me too much.
Short: SPX500
*1/4/19 ADD TO POSITION: S MA making bearish cross with M MA = 15% added
*1/6/19 SCALE OUT: P > S MA (5%) + bullish M MA (30%) + Bullish cross with S & M MA’sl (15%) = 50%
Price: $2,472.62
Projected Risk (horizontal resistance at $2,650): 7.17%
Leverage: 100X
Exposure: 0.09 lots ($22,276)
Margin: 0.0586 BTC
Unrealized PnL: -0.153 BTC
Realized PnL: -0.129 BTC
Notes: Botched this trade due to miscalculating the projected risk (see Worst Dressed List below).
Short: EURUSD
*1/3/19 Scale out 25% due to close > Long MA
Price: 1.13387
Projected Risk (horizontal resistance): 1.4%
Leverage: 100:1
Exposure: 0.24 lots ($24,000)
Margin: 0.063 BTC
Unrealized PnL: -0.0355 BTC
Realized PnL: -0.012 BTC
Notes: Adjusted projected risk and set a market stop loss at 1.15010. If that gets triggered then I will lose approximately 0.09 BTC. That is about twice as much as I want to risk based on the Consensio guidelines and that is because I did not do a good job of projecting risk yesterday. This position is an early front runner for January’s Worst Dressed List.
Closed Positions
Long: XRPM19
*1/3/19 SCALE OUT: P < S MA = 5%
*1/6/19 CLOSE OUT: P < S MA < flat L MA < bearish M MA
Enter: 0.00009702
Exit: 0.00009177 & 0.00009228
Exposure: 5,385 Ripple (0.522 BTC)
Realized PnL: -0.0302 BTC
Notes: Even though Consensio signaled an entry I should have waiting for breakout of ascending triangle / c&h and should have been ready with a stop entry. However since risk was properly managed and I stuck to the guidelines I feel good about this trade.
Watchtower
ETHUSD: I am bullish until Constantinople Hard Fork. Buying the hype, and selling the news. Consensio is bullish but waiting for c&h to confirm + TL breakthrough. Waiting to enter due to price being up > 8% in last 24 hours combined with unfavorable r:r.
ETHBTC: Weekly Descending triangle that found support from prior ATH’s. Expecting huge volatility once it breaks. Passing on entries until a daily candle closes above or below.
XAUUSD: Price back above trendline and appears to be turning it back into support. However it is also getting dangerously close to breaking down the parabolic advance. It it does then an 80% decline would be expected which would indicate a return to $1,200. The RSI is pulling back from overbought territory. Watch for a bear div.
USDCAD: Really like seeing these hard / fast pullbacks when the enter a confluence of support. The Canadian Dollar is currently testing prior highs for horizontal support and the trendline waits right below. The L MA is very bullish and is also apart of this cluster of support. Being this far away from the S & M MA’s is a strong indication of short term oversold conditions. The only problem is that it could take a while before Consensio signals an entry.
Best and Worst Dressed Trades from 1/1/19 through 1/6/19
Worst Dressed
SPX500 Short
The trade that I am least pleased about is my S&P 500 short. The primary reason for my dismay is the expected risk that I used. I used horizontal resistance at $2,520 to determine my expected risk and thus my leverage and exposure.
I knew for sure that I would want to hold onto this position through $2,600 due to the neckline from the h&s as well as the very bearish 33 MA. I should tend to be even more conservative then that and would like if I used $2,650 to calculate my expected risk.
The reason I didn’t use the correct number to calculate my risk was primarily. The tighter the expected risk I go with the more leverage and exposure it allows me. I am very confident that the S&P has entered a bear market and I am expected a big move to the downside over the next few months. Therefore I am inclined to max out my exposure on this trade.
I am used to trading with strict stop losses and that is the biggest difference for me with Consensio. There will definitely be a learning curve.
That miscalculation has put me in a very bad spot. The unrealized profit on this trade is currently -0.153 BTC and I will not be getting any more signals from Conensio to exit as long as we are below the bearish L MA.
If the price does rally to $2,650 before I am able to fully scale out then I would be looking at a ~0.5 BTC loss on this trade. Absolutely unacceptable to risk ~25% of my Challenge bankroll on one position. It should be nearer a fifth or a tenth of that at risk.
There should be a lot of resistance at $2,600 and I will be watching closely for that to hold. If it does then this could quickly turn into a very profitable position and alleviate a lot of the anxiety that it is causing me.
USDHUF Long
This was more of an honest mistake that I will not beat myself too much over. I go through dozens of calculations per day to determine how to manage my positions / cash. A mistake is bound to happen. Unfortunately this mistake is a scary one, exposing $80,000 instead of $8,000 that should have been.
If the Hungarian Forint moved against me on Friday (like most of the USD longs did) then it would have put me into a world of hurt and would have cost me more than 10% of my bankroll. Luckily that didn’t happen and I am able to start scaling out, due to Consensio, today.
Since this was not done out of greed I am not as worried about it. Nevertheless I will do my best to be more careful next time.
Best Dressed
ZAR (didn’t overexpose), BTC (was patient, stuck with the game plan, didn’t overexpose)
USDZAR Long
This is a trade that has had me drooling over the past few weeks. If US equities enter bear market then the USD should rally. I am bearish the stock market and bullish the USD. When bullish the USD I like to long it against the weakest currencies that I can find, TRY, ZAR, MXN, instead of the more common EUR, JPY GBP pairs.
The South African Rand formed a very nice cup and handle throughout 2018 and finally brokethrough the bear trendline on August. It then proceeded to consolidate in a bull flag type of pattern above the trendline and cup and handle.
Furthermore the 200 MA is in a very bullish posture. With all of those factors combined I was / am about as bullish as can be on USDZAR.
The price recently spent a few weeks above the flag pattern and it would have been very easy for me to get greedy and overexpose myself like I did with the SPX500 short. Eventhough this trade has moved against me significantly that is okay because my risk is properly managed.
It isn’t a great feeling when the first up on my best dressed list is a big loser but that is okay because I am sticking to the process and learning from my mistakes.
BTC Long
If I am not mistaken this is my only position that is currently in the green and therefore I felt obliged to include it on this list. There were a number of reasons why I prefered to look for shorts on BTC (see Daily Update from last few days). Mainly due to the built up resistance from $4,000 - $4,200, the thick Ichimoku Cloud, as well as most people seeing the i h&s / c&h and my lack of belief in patterns that most recognize.
Nevertheless I stuck to Consensio and entered the long due to the L MA turning slightly bullish, the golden cross, the bullish cross with the S & M MA. This is a great example of why it is extremely important to stick to a system and not let personal feelings / emotions get in the way.
When positions move against you it is important not to take it personally and when they go in your favor it is important to control feelings of euphoria / ego. Knowing that the system you are trading is what got you in those positions can make all of the difference in the world.
emasar Indicator is available for purchase at alphanalysis.io/product/emasar/