Once a Trader, Always a Trader #5: BTC Pump Aftermath Lessons

in LeoFinance2 months ago

I haven't updated my Once a trader series for about two months. First, I was busy with other things, and second, there was not much interesting to write about. You know, trading is boring. You stare at charts and wait. Then buy it low and wait. Then sell it high, stare at charts, and wait again. Holy boring shit...

Well, I haven't blown my account yet. Actually, my depo at Binance is about $300 (not 300K, just 300) in today's crypto prices (66% USDT, 24% BTC, 10% misc shit). Given that I started with about $100, to triple it within 4 months may be considered a success.

But! 1st, I must admit that it happened largely due to the recent BTC pump. In other words, I was rather lucky to join the party right before the big bang started. 2nd, I must confess, that $300 is not from trading only, it also includes staking rewards, airdrops, faucet pennies, profits from my Splinterlands assets sales, and so on. And 3rd, I've made at least three pretty shitty decisions that cost me a (relatively) shitload of money. Hadn't I made them, my depo would have now been $500 at the very least... A man who carries a cat by the tail learns a lesson he can learn in no other way, as Mr. Mark Twain put it.

So, what I've learned? Not much, actually. As one smart guy put it, I didn't learn anything; I already knew I wasn't supposed to do it; so maybe I learned not to do it again, but I already knew that.

Mostly, I've got reassured one more time that Mr. Jesse Livermore's dull tiny book is pretty much the only book needed for successful trading -- if you duly understand what is written there and duly implement it.

What I learned is the importance of time and money.

Trading takes time, literally. You can't successfully trade only during a free hour in between jerking off and the market will not wait till you finish your jerk and get back to the terminal. Even positional trading of a single position requires regular attention, no matter if you're in the market or out. During my trading career in the early 2000s I hadn't this time problem -- I was about 20 years younger, with much fewer responsibilities, more free time, and could easily stay overnight any day I needed to. Now it's not like that for me anymore. Pretty much the only time I can spend on trading is my employer's time -- in recent years (and especially during the pandemic) I've had quite enough "free" hours at work and almost no free time at home. To make the time problem even worse, the crypto market is most active during the US trading time, which is evening and night in my time zone.

Another problem I've got is to choose what to trade. Obviously, I can't monitor all the trading pair even on Binance only, I simply have no time for that. Jumping into every Twitter hype, pump, and dump will result in overtrading and losses. On the other hand, if I monitor only a couple of pairs, I will miss quite a lot of good opportunities elsewhere. There must be some optimal number of selected pairs for me to monitor, a good trade-off between time, attention, and profitability, but I still can't figure it all out... It's a big problem, actually.

And last but not least -- I learned how good it actually is to have a large depo. Not only because with a big depo you're rich, but mainly because with a big depo you have many more profitable opportunities with much less risk. My $300 depo is actually almost nothing, it's good for fun and training only. With any reasonable risk management applied, my position will be so small, that it will earn cents even during the hardest pump. No matter how possible it is theoretically to grow $1M out of 1 buck -- it's pretty much improbable practically. It's money that makes money makes money makes money...

However, I hope to sort it out (partially, at least) by the next pump.

I must have at least $1K on my account -- to show my wife that cryptoshit is somehow worth the time I've wasted on it!

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