Trying to Learn How to Trade Journal: June 2023 Final

The last entry for the post series. The last parts of the post are some of the few notes that I've learned from the process. If I have to elaborate everything, it's going to be more than 5k words at the minimum so no. Conclusion: Trading is still a hobby for now.

Objective: To have a monthly log of my progress in trading. I want to know my baseline and see where I’m heading. Trading has been for kicks and giggles hobby rather than a means to generate income for my living expenses. I want to learn how to do it, see if I could get good at it and how far I can go doing it.

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Disclaimer: I’m not an accountant/bookkeeper by profession so I am also open to entertain some numbers here maybe inaccurate. The whole point of the post is sharing some insights from my trades. I’ve been doing this for months and it’s only this year that I started to consider improving at the skill. Nothing here is meant as a financial advice.

The Summary of June 2023

Starting Capital	1000$ retained from January Baseline	Previous
Total Trades	20	from 19
Win	8	from 13
Loss	12	from 12
Win Rate	40%	from 68%
Ave. Win Per Trade	38.406	from 23.426
Ave. Loss Per Trade	-28.256	from -21.991
Largest Win	168.139	from 79.182
Largest Loss	-56.449	from -160.4
Total $ Won	307.251	from 304.543
Total $ Lost	-339.072	from -131.948
Win Streak	5	5
Loss Streak	5	3
Net Profit	-31.821	from 93.413
Net Gain	-1.66%	from 5.13%

TL:DR, 88% gain from 1000$ capital in a span of 6 months lazily trading. See my previous entries if you want to keep track.

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Ending it with a Loss:

Despite the results for this month’s trade, I think it’s just poetic justice that I got ahead of myself when it comes to figuring out the market. Majority of the consistent mistakes I make it timing it wrong and being impatient. Had I just waited a few more days, I could have ended this in more than a hundred dollars gain but nope. It felt great that I accomplished something as 88% gain in half a year but tasting the moment was, like most accomplishments, short-lived. I have a high bar when it comes to anything I put my mind into so seeing the results made me eventually be indifferent. Good I guess, could’ve done better. Below are random snippets of lessons from trading:

Don’t trade when preoccupied:

There were several occasions when I’m about to win but end up at a loss because someone interrupts my train of thought while looking at a chart. It’s an elementary mistake to lose focus on trading live but I paid for these lessons several times. If you are in an environment where you can be interrupted, better to avoid looking at the charts or thinking about entering a position.

Keep Notes:

I take screenshots of the setups, before and after the events just to backtrack what went wrong and learn from those mistakes. What you need from the journal is finding situations that work for you among the trial and error that you’ve been doing. What were you thinking before and after the trade. You’ll discover your flaws that weren’t apparent when you were trading in the moment once you start to review the notes and this can save you a lot of money from costly mistakes.

Set Stop Losses:

The remedy I came up with so as not to miss out were automatically buying/selling at prices I won’t regret. Setting your predetermined cut loss point or entries gives you some peace of mind to be away from the monitor. Sometimes this simple gesture can turn your potential hundred dollar loss into 20$.

Bouncing from the consecutive losses:

Probably one of the hardest things to wrap your head around when it comes to trading. When you see the series of losing streaks and the equivalent amount, it’s demoralizing but I learned that there’s often another chance to come back up. While I still get losses from trading Hive, I can divert my funds into taking positions on other tokens and still recover. You stop being a good trader when you quit trading.

Trading is more about Psychology:

This needs to be stressed more. If you don’t find it in you to toughen up the red days, you’re not cut out for this. When I lose a trade, I just lost some points in some scoring system I made up. But if trading is my livelihood, those losses would have had more impact to my mental state when trading. If the wins will keep a roof over my head, then the loss felt like I was closer to eviction. I pictured myself in that state to give me at least some more motivation to take things seriously and improve. There were times when I thought of just giving up and quit while being ahead but that’s not really testing my limits. Now I just see a loss of 2-3 digits and feel, meh, I’ll try again.

The Rules / System for Trading:

I don’t have a specific label for my trading system since it’s just a mix of strategies I found on youtube, reading technical analysis books, twitter, and trial and error. Sometimes I would do X and then midway do Y because there’s been a change in the movement until I ended up having an algorithm on what to do next if X and Y happens. For my mental notes, I do it like, if Price reached X, with low volume, don’t do this, if price reaches X and the candle on this time frame do this, if price reaches X and the structure doesn’t look consistent or the indicators are saying otherwise, hold your horses and review.

You can check out supply and demand, Wyckoff trading method, Stan Weinstein’s trading method, and Elliot Wave analysis. I used bits and pieces of their rules to come up with my own twist since some of the systems mentioned are better for trading stocks/forex than crypto.

This is on the hourly timeframe of Hive. I check for the last green candle before it dips below. The reason is that there are many buyers that are trapped in that area because they bought when the market went’ down and are looking to close their positions to cover their losses. But there are traders who have hedged their positions and have short positions open and once they have they decided to take profit, the price will eventually move back up in consolidation to rally and pump. Traders that are in their short positions would have to be forced to buy when the market goes up and this creates a buying pressure towards up until the first test of the resistance happens seen in number 2. The first test is one of the best times to dump or sell when the longer timeframe shows a bear market, just my experience. Some would wait for a second retest of the same level before opening a short position.

The opposite also happens during a bull seasons when there would be a first and second test of support. Even on bear markets, you would see these patterns on a smaller time frame, probably around 15 min charts but don’t be misled into thinking that it’s going to be green when the overall market says it’s bear. This is usually done during the day trades.

I entered around 0.317 and 0.32 and still in position.

Another setup I use for daily or weekly timeframes is the use of the moving average ribbons 20,50,100,200. When two candles closes above the MA20 on daily, there’s a good chance that there will be a trend forming that can span to a few weeks. This is just using the moving average ribbons. The RSI and MACD are also indicators that just add my conviction to make an entry. I would make up my mind before opening these indicators because indicators are unreliable (imo), these numbers, like price and volume can be manipulated. I don’t trade expecting that the price will be logically following the direction as predicted. Remember that price manipulations in the market is a common thing and their setup is creating patterns retail traders would lunge into and get trapped.

My go to setup on the 1H, 4H, and Daily Timeframe:

The black box is the period of consolidation slightly below the moving average 20 line but once it gets passed MA20 with 2 candles in green or above, it’s during these times that I consider entering a trade and even better if there’s a period of consolidation (blue box). The orange line is the profit target. When setting profit targets, you either trend follow or stick to a set price. The pros of trend follow is that you can get more profits when the price is raised higher than expected but this means setting a stop loss at your original target price once it breached past that point to secure profits. Fixed selling price guarantees you get to keep home the reward but potentially missing out on greater heights like the price breaching my original target price. It really depends on your trading plan because I originally just set a target price and despite missing out around 70% of potential profit, selling at 0.51 is already more than good enough.

The other black box is a range where the potential price will come back again after the dump has concluded. Consider everything in ranges and not fixed price points whenever you’re entertaining where to buy or sell. Divide the large green box into 3 parts, 1 is at the top, the second is when there’s a price bounce, and the third is when there’s cutting losses for buyers that bought at the top approaching to the black box. Sometimes the black box zone is never reached and the price continues to consolidation. This pattern is what I look for whenever I want some signs that a pump and dump may happen.

Timing:

UTC +8 during Mondays and Tuesdays are time zones when these pump or dumps happen because Asian markets open. If the hours before 8am show consolidation pointing towards up, there’s a good chance of a quick pump then it goes down. It doesn’t happen all the time but if I have to guess where my optimal setup for shorting would be, it’s going to be at these times. Fridays are like a wild card when it comes to trading, sometimes you do get pumps happening during the closing times sometimes they never happen. This is a short version of the many factors that I frequently check prior to committing to a trade. It’s not important to me when it comes to being right all the time. If 2/10 trades yield greater profit that 8/10 losses put together, I’m fine with the results overall.

Trading with Indicators:

It’s a love and hate relationship with when it comes to indicators. On one hand, I know there’s a lot of traders who believe a few lines on the chart giving buy and sell signals is the holy grail. Maybe there is some truth to it if we consider that if the majority think the price is going to go up because the RSI is high, then majority will buy and keep it high to perpetuate the belief. It only takes the majority of the volume to sway the numbers.

I use indicators to confirm the pulse of the market direction. If things are going down or going up, it’s going to reflect on the chart. At the bare minimum, there are 4 things I look at: time frame, structure, volume and price action. These are parameters that indicators derive their calculations on, and indicators tend to lag.

Inconvenient Truths about Trading in the Short Term:

No matter how fast you are at making real time decisions when it comes to your trades, there’s always a bot that will trigger the buy or sell sign faster than you. Trading now means to compete with algorithms and AI. There’s no way to compete with these on the smaller timeframes. The way to compete is looking at the trades with a slightly longer time frame (weeks). There’s going to be Black Swan events and random market activity so these bots will need to be shutdown during market anomalies. But you don’t have that handicap.

If you made it this far reading, thank you for your time.