Trade Review September 2021

Start here → https://tradersamwisejournal.medium.com/how-to-lose-7-figures-in-2-weeks-4496488bfb41

Even without the above mentioned meltdown, there are still tons of things to address for the last month or so.

Major Problems

Oversizing

Stop. It. Don’t try and size up to make it back. Don’t go oversize “just this one time.” Stick to the rules.

Trying to catch home runs

During my episode I would frequently try and catch home runs. I must have roundtripped 6 figures on of pnl at least 8 times in late August / September. The solution: ALWAYS take off 70% or so at FTA. After that, stop taking off size until trade is invalidated. Its ok to let 30% run, just not 100%.

Breakout trading at magnet

This was on of the worst parts of my trading last month. The first time we got back to 50keks area we chopped for like a week. So many fake breakouts. I am too lazy to get the chart out but we must have faked out to 50.5k at least 10 times just to drop back down below 50k. I was already oversizing here, so I would try and get in thinking “this is the breakout.” It wasn’t, of course. Then I would take the loss. After this happened a few times, I got into entitlement mode. “Well, at this point I’ve lost so much on this trade, I deserve to at least get the breakout.” Fuck that. No breakout trading at magnet prices. Really no breakout trading ever, but especially at magnets. Also, if the breakout doesn’t work the first time (or especially second time) don’t try again. That’s a great indicator that the breakout might be illusive.

Hedging alt positions

Really I shouldn’t trade alts. Bottom line. But, one thing I kept doing was trying to hedge my $FTT position with $BTC shorts. This obscured the nature of both trades, and I lost money every time I tried to do this. It CAN be ok to hedge, but each trade should have some amount of its own conviction, otherwise don’t do it.

Misidentifying Trending vs Ranging Market

This is tied into trying to breakout trade 50k in early September. There are a few simply guidelines to follow here though. If a strategy doesn’t work the first few times (aka breakout trading) stop it. Reevaluate. Take a breakout. Wait. Be patient. I would say you get maybe 2 shots at the same type of setup. If it fails, then you are probably trading with the wrong bias.

Not following TP guidelines

Mentioned above, but ALWAYS TP 70% at FTA. The rest is up to discretion. This is not a game of homeruns. If I don’t TP 70% at FTA I am gambling.

Keep alt positions super small

Self explanatory. No homeruns in general, but DEFINITELY no alt homeruns.

Trade the TA.

ALWAYS have the chart open. Set resting orders at your levels. Don’t frontrun your levels. Don’t take “small” trades in the middle of nowhere.

Consolidate orders

Don’t spray and pray. There should be some amount of precision in the trade or what is even the point. Scaling in is OK, but don’t start scaling in early and don’t scale in arbitrarily wide.

Get good entries

If the entry sucks or you missed the entry, there is no trade. Go do something else.

Don’t try and catch a sandwhich breakout on low volume

These things can be brutal on low volume. Indecision. If the volume is low, stop trying to catch a bottom when it sandwhiches.

Don’t take small nothing trades

If the entry is bad don’t take “just a small trade.” Those “small trades” easily balloon into not small trades. And then you are sitting on a shit trade. good job.

KNIFE CATCH

Don’t be afraid to catch that knife. In reality, these are usually the best trades. Just do it on small size and set a stop loss in advance. After a losing streak I often will be afraid of taking another loss. So then, instead of getting good entries by fading hard, I take objectively worse trades that I convince myself will “probably work.” You need confidence to take good trades, and if you don’t have confidence that doesn’t justify taking any other trades.

Don’t chase breakdowns

Just don’t

Stop using failed strategies

Its normal for a strat to stop working as the market conditions change. If you notice a strategy that used to work no longer does, stop using it as soon as you notice