Trade Review — June 5th, 2021
Overall I have had one of my best months in May / early June, but there have been a few major incidents to report.
The first was the major dip to 28~30k on May 19th. I had left what I thought were “stink bids” overnight and almost blew up my biggest trading account. I escaped by the skin of my teeth and have since moved the majority of my funds on FTX to a subaccount. However, this is not enough. I will no longer leave stink bids, no matter how small, without having substantial USD collateral and stop losses. These 2 things are what put me at such incredible risk on the dip: my collateral lost a huge chunk of its value (mostly because of things like $SOL), and I didn’t properly calculate how severe this could get, as such I didn’t have proper stops. I will not let either of these happen again. And with funds in a subaccount, even in the worst case that subaccount will be safe.
The second happened last night. This was not existential risk like the May 19th dip, but simply bad trading, bad planning and bad management. I really only got scratched, but there were a few concrete mistakes I made (many I have journaled before) that need to be addressed. 1. Don’t trade tired — just go to bed and trade in the morning. 2. Don’t hesitate when it’s time to take a loss. This was part of being tired, but I had a chance to exit for a scratch but wasn’t focused and didn’t react in time. 3. Don’t convert a losing trade thesis into a new thesis to justify staying in the trade. This initial trade idea had to do with more Elon twitter pumping, but it clearly didn’t happen and the final dump that got me happened over an hour later. I should have accepted that my thesis was dead and there was no reason to stay in that trade. That being said, I did do some things well. I took my loss gracefully after the initial fuckup, and I did NOT revenge trade at all. I did take some small positions in the ensuing volatility in the hours after the dump, but they were low risk and very intentional positions. I really didn’t take much of a hit, but the trading itself was pretty pathetic for the reasons noted above.
On to the standard things to talk about…
Recurring Problems
Get better entries
This will continue to show up in my journal as long as I live. I do think I’ve mostly done a better job this month though.
Hidden orders are basically useless. ignore
Yea I mean there is some alpha here, mostly that I continue to notice hidden orders tend to end up underwater first, and then eventually the market goes in their favor. That being said, mostly ignore these.
Get out of bed and do it EARLY to trade.
I miss lots of PA and just overall trade like garbage from my phone sometimes in the morning. There is no excuse. This is my job. Take it seriously and get the fuck up.
Check chart before punting trade or hedge
Sometimes I just look at blind PA and don’t actually look at my own TA and punt bad trades or cut trades where I shouldn’t. ALWAYS check my charts carefully and also keep an eye on the H4 chart for confluence.
Don’t hedge dips
It is just too expensive. In some instances I might have to, but in general I would say hedge a fraction of the amount if possible on a dip, or hold out for a bounce if exposure allows.
Don’t trade tired
Yesterday should be nuf said. But basically I need a sleep schedule. This will help me get up early and catch pre market PA as well which has been a huge opportunity cost for me.
Don’t hesitate to take loss, you might not have time to spare
While there is a balance when it comes to cutting too early vs too late, last night was clear that we were going to goblin town and I should have got out, or scaled out more faster. This is mostly because I was tired I think. I think the easiest way to solve this is with a proper sleep schedule.
Don’t let a failed trade turn into a new trade
Again referencing last night’s trading. I took a trade with a thesis based on Elon pumping the market. It failed, and an hour later we dumped. I rolled the trade from an Elon pump trade to something else (I guess a breakout trade? woops). Stick to the trade thesis and once it’s invalidated gtfo.
Improvements
Don’t breakout trade in range
This is a problem from my journaling in early May. To be honest, I’m not sure what I was doing then, but in the late May early June chop I have been absolutely killing it and not getting fucked my betting on the range breaking. Very proud of this.
Keep tabs on expiring futures for dip buying
There is a lot of opportunity in choosing precisely what asset to buy, and I have done a good job of watching the standard expiring futures on FTX to catch wicks on dips. That being said, the premiums have pretty much died off now and so there isn’t the same opportunities here that there was.
