Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.

June 3rd 2020, Crypto Chartbook: Accepting doubt

Korbinian Koller, Midas Touch Consulting
0 Comments| June 3, 2020

{{labelSign}}  Favorites
{{errorMessage}}

Accepting doubt

There are no guarantees. The constant debate if Bitcoin gets banned or rises in price or will be replaced or… Nonsensical chatter in the news and one’s mind. Nobody knows what happens tomorrow or in 10 years. The only principle about these forecasts are, that it is a lot easier to predict where one will be tomorrow versus in 10 years from now. So long term prognostics are harder to speculate on. One way to cope with this principle is to use another one to reduce risk. Our quad exit. It takes a short term profit (easier to predict) against a long term runner position which is less worrisome (=easier to execute) because true risk is already eliminated. Accepting doubt.

Chatter, worry or otherwise brain occupying noise shackle decision making processes. This becomes especially magnified once you are in a trade. Consequently evaluations and assessments prior to an entry are a speculator’s utmost responsibility. After that, once committed, execution on the original plan without deviation, is mandatory. In other words, straying from one’s original plan leads down a rabbit hole where a positive outcome is rare at best.

Accepting doubt

A good example is our recent long entry in Bitcoin, posted live in our free Telegram channel on June 1st (bright green up arrow).

BTC-USDT, Daily Chart, No Need To Know The Future:




BTC-USDT, daily chart as of June 3rd, 2020

Each dark green up arrow represent a long entry we posted in real time. Each of these opportunities had a low risk profile with a high probability of a positive outcome. None of the scenarios knew the future of Bitcoin prices.

By accepting doubt we find ourselves now with Bitcoin trading near US$10,000. All of these entries generated profits. All of these trades also still have a runner position (= the last 25%, see our quad exit strategy) left within the market.

The world might ask:”Are we breaking 10k in Bitcoin and when?”. For the astute trader who surrenders the need to be right and ignores distraction that stems from doubt, the question is merely:”Will it be a winner, or will it be a big winner?”

BTC-USDT, 60 Minute Chart, Good Timing Equals Risk Reduction:




BTC-USDT, 60 minute chart as of June 3rd, 2020

In this sixty minute chart you can see the same trade on a smaller time frame. While the world is waiting for a breakout and takes a high risk entry into momentum, we positioned anticipatory early with a very small stop. Quickly after entry we secured instant profits (0.42%) to provide insurance for the rest of the exposed money. Within hours the near 1,000 point move for this day’s session was completed. We again exited with parts of our exposed capital. This time with a good 7% profit on our money. The final part of our position (25%) got stopped out at break even.

It is very typical in Bitcoin that breakouts like this get faded.

The classical breakout trader found himself in this specific trade in a losing position. Our approach instead generated generous profits.

Litecoin, Daily Chart, Accepting Doubt, No Need To Worry:




LTC-USDT, daily chart as of June 3rd, 2020

In anticipation of the bullishness of the market we also took a stab at Litecoin. The daily chart illustrates nicely with the supply and demand zones a favorable risk reward ratio on this trade.

Litecoin, 60 Minute Chart, Risk Reduction Quad Exit Strategy:




LTC-USDT, 60 minute chart as of June 3rd, 2020

And in similar fashion we took six hours later our first profits to eliminate risk. The sixty minute chart shows how risk was quickly eradicated and even though the next target wasn’t reached and we were stopped out with the other half of the position at breakout entry levels, we walked away with profits.

The trader using confirmed entry prices and an all in/all out approach, would have walked away with a losing position instead.

Accepting doubt

When doubt creeps up it should be a warning signal that there is uncertainty about one´s original plan. It is essential to clear one´s mind and align with set goals on how to exit one’s position without hesitancy. If moments of doubt are consistent, most likely there is an unresolved issue within one’s trading psychology. Even more likely a non rule based part in one’s trading system needs more clarity (more rules). Meaning the system development was abandoned at a too early stage. Therefore, most traders don’t have enough rules! However, if you don´t have a solution rule for a problem you will be in doubt and will freeze while action is needed. You need choices and answers for each choice! Hence, a rule-based approach must always be refined to avoid data overload. Here the devils is in the details.

The best solution to such holes in the system is asking quality questions and adding rules for even the most minute scenarios. Consistent market observation and self evaluation is a market participant duty. Best monitored by writing a detailed journal. The result, a never ending process of growth and expansion of one’s skill set. In addition rules get subconsciously integrated to be readily available to solve most scenarios the market might throw at you.

We post real time entries and exits for many cryptocurrencies in our free Telegram channel.

If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.



{{labelSign}}  Favorites
{{errorMessage}}

Comments

No comments yet. Be first to comment!

Leave a Comment

You must be logged in to be able to post a comment.

Get the latest news and updates from Stockhouse on social media

Follow STOCKHOUSE Today

Featured Company