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    [Daily Discussion] - Tuesday, February 16, 2021 Bitcoin Markets

    February 16, 2021

    [Daily Discussion] - Tuesday, February 16, 2021 Bitcoin Markets

    [Daily Discussion] - Tuesday, February 16, 2021

    Posted: 15 Feb 2021 09:00 PM PST

    Thread topics include, but are not limited to:

    • General discussion related to the day's events
    • Technical analysis, trading ideas & strategies
    • Quick questions that do not warrant a separate post

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    submitted by /u/AutoModerator
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    Tips For Beginner Traders

    Posted: 16 Feb 2021 09:14 AM PST

    I wrote this comment on a recent post not expecting many would see it. To my surprise yesterday there was a thread made trying to dig up my comment which has became quite popular.

    Decided to repost my original comment as it's own thread with better formatting given that it seems to have been appreciated by a few folks. Hopefully it can reach a few more people who might find it useful. Also edited it and expanded it since some parts were only relevant in the original context. I hate that there isn't a nice round number of tips anymore but not reason to fall into the round number bias. Hope this helps.

    1. Trading is hard. And can be very stressful. If you're looking for easy money, this is not the way. If you're susceptible to strong emotions, this is not the way. With that said, I'd like to give you a few tips that may help trading be fun.

    2. There will always be another trade and another opportunity.
    Crypto is 24/7. This is a lot of fun when you realize everyone on WSB has to stop trading at 4pm. This is awful once you realize that everyone on WSB GETS to stop trading at 4pm. You will feel pressure to watch the price all the time.

    There will always be another trade and another opportunity. Make sure to make time for the important things in life outside of trading. Family, friends, health, sleep, food, etc. Seriously make sure you sleep well. Crypto is notorious for not letting you sleep.

    3. 7PM EST / 12am UTC is a crucial time
    A large portion of Europeans have just closed their daily candle. It's 8am in Beijing which is the beginning of the work day for many. 4pm on the west coast which means people have just finished work. And dinner time on the east coast so people have time to pay attention. There are several hand off periods throughout the day but 7pm est seems to be one of the most crucial. I also find 2am. EST and 7am. EST to be very important hand off moments where one continent hands of control of the markets to the others.

    4. Revenge trading / trading on emotion is the quickest way to blow up your account.
    Forget about winning back the money you just lost, it's gone. Don't throw good money after bad. Take a walk, get something to eat, take a nap, have sex, whatever. But definitely do not continue trading unless you are calm and collected. Never trade angry, upset, sad, or anxious, you won't think straight. You need to be in control of your emotions.

    5. Only risk what you can afford to lose.
    I think every trader has blown up their account at some point. Make sure it won't be a crippling blow when it happens.

    6. You should never risk more than 1% or 2% of your total bankroll on any 1 trade.
    Your position size is probably too big. It only takes 1 bad trade to get rekt, you can't put yourself in that position. Even the best traders have win rate of 60 - 75%. If you're just starting you're probably somewhere in the 15 - 30 % range. So just work it out logically. If for every big win you're taking 2 or 3 big losses you are gonna blow up your account fast. If you can't take 50 losing trades in a row, your positions are too big.

    7. The goal of trading is not to get big wins, it's to manage your risk, protect your capital, and grind out wins over time.
    Rarely will you call the perfect top or perfect bottom. Wait for the market to show you its intentions, seize the opportunities that present themselves, take your profit, and be happy. But above all else, always manage your risk, that's the key.

    8. Your position size is based on your stop loss, not the other way around.
    Most people decide on a position size and then pick a SL level to limit how much money they can lose; this is backwards. Stop loses should be based on TA, not arbitrary levels like ensuring you only lose $x. Decide your stop loss before you enter, then adjust the size of your position so that if it gets hit, it will be an acceptable amount of loss.

    9. The outcome of any 1 trade is always random.
    Your analysis might be wrong, some unknown news might come out, Elon might tweet against you, etc. (This seemed a lot more prophetic when I originally posted it a week ago, before the doge tweets). It's only over time your edge plays out. It might take 100 trades or more before you know if your system is successful. Your bank roll need to last long enough to get the law of averages to play out. Which brings me to...

    10. For now, you should only be taking absolutely optimal trade set ups.
    If the set up is not optimal because for example, you just got stopped out and now it's pumping; you can't fomo in! You missed that move, sit on the sidelines until you have another optimal opportunity. Even trying to catch a move that's only half played out will reduce your winnings by half and double your risk.

    11. Plan the trade and trade the plan.
    You need to know all the details before you click the button. What is your entry? Where is your exit? Where is your stop loss? You need to know all of that in advance. We have a tendancy to let our losers run too long because we want losing trades to break even, avoid the temptation to widen your stop. Likewise we have a tendancy to cut off our winners short because we want to lock in the gain. Once you're in the trade you may get emotional; defer to the decisions you made while you were thinking clearly and never fault yourself for a decision made with a clear mind, even if it doesn't go your way.

    12. Be aware of your biases
    We all have a tendancy to lean one way or the other. People who are bullish will interpret the chart bullishly and look for reasons to justify their desire to go long. Same for people who are bearish. Be aware of what your biases are and do your best to negate them. Take what the market gives you, not what you expect it to give you.

    13. The hardest trade to take is no trade at all
    It's hard sitting on your hands but over trading is an absolute account killer.

    14. A successful day is not a day when you make money, it's a day where you follow your plan precisely.
    Sometimes you'll win, sometimes you'll lose, over time it will average out. A successful day is not one of the days you make money but one where you are disciplined enough to follow your plan. No bad setups, no fomo, no wasted bankroll. If your system is good you will win over time.

    If over time your system isn't successful then you can make changes but If you're constantly changing your approach just cause, you're just gambling, and probably falling victim to recency bias.

    15. You can make money in a rising or falling market.
    As a long time hodler i hope the market goes up. But as a trader I don't care. All I want is volatility. As long as the price is moving, you can profit off of it, whether it's rising or falling.

    16. Learn about liquidity pools and stop hunting.
    A piece of advice I never forgot is "If your stops keep getting hit right before the market reverses, congratulations, you've figured out where everyone else is putting their stops. Learn to use it to your advantage."

    17. Start with a really small amount or better yet, get a practice account.
    You need to reduce the size of your bets to something insignificant while you're still learning. You'll want to take big bets to feel like you are making money. Don't do that. You will suck at first. Really bad. You should be risking $10 per trade for now while you learn. Once you have a win rate above 50% and can consistently win your $10 trades, then you can think about upping your position size. Better yet, make yourself a practice account and get good with fake money before using real money again.

    18. Keep a trading journal!
    Seriously this is so important. When you have a record of your trades along with your thoughts before, during, and after the trade you can review them and start to notice patterns. Strategies that work, strategies that don't, patterns that stress you out, how your state of mind, lack of sleep, temperament, etc, affects your trading. You need data to improve, and if you don't have a journal, you don't have the data you need to measure and improve. You need to study your wins and losses so you can learn from them.

    Post looking for the tips: https://www.reddit.com/r/BitcoinMarkets/comments/lkkqs4/day_trading_gone_wrong/

    My original comment: https://www.reddit.com/r/BitcoinMarkets/comments/lgodew/-/gmue07r

    submitted by /u/rocksolid77
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    Day Trading Gone Wrong

    Posted: 15 Feb 2021 11:15 AM PST

    There was a post here a day or two ago where someone posted how they came to the realization that they needed to stop day trading. I can't find the post but there was someone who outline 10 or so tips/guidelines to trading in the comment section. If anyone can repost those I'm sure anyone can benefit from them, especially in our market.

    submitted by /u/lilsasuke4
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    Newbie in crypto

    Posted: 16 Feb 2021 05:29 AM PST

    Hello,

    I have around 30k Euro savings and I would like to have it increased. I was always curious about Bitcoin and cryptocurrency for a possible method to increase your wealth but I never really got serious about investigating and look at my possibilities for myself until very recently.

    Finally last week I decided to open an account in Binance and, after a period of verifying my account, I can now use it for buying/selling/exchange cryptocurrency (CC). Yesterday I also created an account in Exodus so as not to have my money in the Binance wallet because I want to have more control of my assets than keeping it at Binance.

    Of course, I wasn't going to just go crazy and exchange my different 30k Euro savings on different CC. What I did yesterday was to first buy around 50 Euro on BTC, and later I also bought around 40 Euro on Ethereum (ETH) and finally around 36 Euro on Dogecoin (DOGE). This was only for me to learn the dynamics of the market and allow me to play and understand the risks of playing with crypto money. I want to let this money to rest for a week or so and see if it grows and for how much. Later my intentions are to maybe buy something around 500 Euro on each of these three options and repeat the process. Once I feel more confident, maybe land some more Euros on BTC and possibly also ETH.

    However, my first impressions of this experiment are not so positive. If I want to buy crypto on Binance with a debit card I first need to transfer cash to the app which could come with a commission of 1.3 Euros sometimes, and later, to transfer that crypto money to your Exodus wallet comes with further fees from Binance. At the end of my initial investment of yesterday (50+40+36=126 Euro), I only can see something around 83 Euro on my Exodus wallet. I know this was a simple experiment for me with little money and that it has just passed a day but that's 43 Euros of loss!

    Therefore, I have a couple of questions:

    1. Do you see my approach as good practice? Or am I doing something wrong?
    2. What do you recommend me to do for growing my 30k savings, reach FIRE and see my savings grow via CC?
    3. Would it be ok to expect that in the next month these 83 Euros on different CC will grow and pay off this loss of 43 Euros?

    Thanks!

    submitted by /u/John-Titor_0
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    Increasing profits with futures and options, but how?

    Posted: 15 Feb 2021 01:22 PM PST

    Let's assume I have 2 Bitcoins. I want to sell 1 BTC when price reaches 100k USD, and I want to keep 1 indefinitely. But in the mean time, I want to maximize profits/harvest $$ via futures and/or options.

    I have the following plan:

    On Deribit, I sell one BTC-31Dec21 Call option, strike 100k USD. This gives me around 11,500 USD "profit" right now. The call is fully secured with 1 BTC, so if by end of December BTC is at 50k, I have 11,500 USD more than I would otherwise have. If BTC is at 200k, then I would have 111,500 USD, and one BTC less.

    So basically free money while 100% achieving my goals, right?

    But I am GREEDY! Let's say in June BTC goes to 90k USD, but Dec futures are already at 100k USD. Now I want to "lock in" the 100k price and sell the Dec future for 100k, which I will collateralize with my second BTC. The first BTC is still collateralizing the call option I sold.

    Scenario 1: BTC is at 50k on 31st Dec 2021: I sold 1 BTC via futures for 100k, pocketed 11.5k from selling the call option which didn't get executed, and still have 1 BTC. --> The plan worked perfectly.

    Scenario 2: BTC is at 200k on 31st Dec 2021: I sold 1 BTC via futures for 100k, pocketed 11.5k from selling the call option. But now the call option got executed and I had to deliver 1 BTC for 100k. So I have 211.5k USD and 0 BTC. BAD.

    Is there a way to lock in the 100k future price while simultaneously "harvesting" $$ via selling covered calls? Or is it one or the other? Hedging downside in June by buying a put option is the only way I could think off, but it seems awfully expensive and potentially eating up the whole 11.5k I got from selling the call.

    submitted by /u/protycooo
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    A Little Confused!?

    Posted: 15 Feb 2021 11:44 PM PST

    Ok.. so I've recently started paper trading BTC/USD on Tradingview. The account has $100000 Dollars, here's where the confusion begins. I placed a buy order at market price for 10000 and made a $100000 profit!? So what exactly am I buying and selling here, I know it's paper trading but the trading journal does not show the amount spent for the transaction of the order. So, fellow users, guide me to the light. I did post this in the TradingView sub, but looking at how desolate that place is, rather post it here.

    submitted by /u/TheWiseSword
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    Is it too late to get rich off bitcoin? (long term)

    Posted: 16 Feb 2021 03:01 AM PST

    Im 23 and want to invest in crypto for the long term. If I were to put $5K into bitcoin today (currently worth $50k) even if bitcoin were to someday reach $500k that's only a x5 profit so I would have only $25k.

    I feel like I have a better chance getting rich off ether cause its only worth $2k rn so if it were to someday do to $50k that's a x25 profit.

    submitted by /u/ColbyKeyz
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