Good morning degens!
This has been an incredibly-busy week as I’ve been prepping for the more public launch of this newsletter and community starting next week! I had shared as-much just 15 days ago and I’ve been furiously putting together the larger portions of our growing content library that I hope will help 100’s of people this year learn how to trade!
Seriously! My goal is 100 paid subscribers by the end of 2022. Modest but doable! I hope a few of you early subscribers and readers have gotten a good taste of what I plan on providing and that the value matches the price — I think we can easily earn the cost of the subscription through what we can learn together as (future) traders!
Okay, so, yesterday I attempted a few different trades and saw a few patterns in the morning:
Continuing upward? That would be risky but I decided I could try to on a trade and see if she continues the run the distance:
Volume seemed to be building on the 15min but after such a climb it’s not unusual for a retracement back down to the .5 fibonacci or even further depending on confluences.
This was going to be a risky move and if I was going to do it I should put some adequate protections in place — which would be important because I’d get stopped out pretty quickly on this trade.
Compression was growing as well — these bands below are essentially interpretations of volatility and RSI and as they squeeze tightly they’ll usually burst to the upside or downside — my hope was to the upside.
This is on the 1min so it can get really, really tight (as you can see on the far left):
One last confluence was a possible "mini-wyckoff” and I quickly charted out a Darvas Box on the top and bottom as well as noting things like the “selling climax,” “automatic reaction,” “(re)tests of top and bottom supports, and then noticing a possibly “wyckoff spring” into a “sign of strength” and “last point of supply”.
I’ve noted a few of these things below:
This isn’t complete yet so if she moves into “backup supply” territory then we’re really down to pound. Taking a long now would be risky as it would bounce up, then down, form a cup / handle and then rise for the win. But, if it collapses on the test of supply then we all go down together.
Could she hold it together?
I ended up getting blow out and lost a few bucks on this trade, which is fine because that’s part of trading as you cannot not lose money in this line of business; one must consider it the “cost of doing business” as a trader, like your operating costs or overhead for a more traditional business.
In fact, I recently calculated that my current yearly costs for running a small trading desk and personal “trading business” is ~$2,000 a year if you include software, services, books and other educational resources. But that’s just more capital expenses than operating ones as the losses are the latter.
This doesn’t include “intentional” losses which might be understood as workflow and trading experiments that you’ll run to see if what you believe works does, in fact, work. I run small, less costly experiments when trying new instruments and methods and I usually want to get stopped out in-profit if I can.
A good examples was a small trade this morning where I went short on a quick snipe and got stopped out almost immediately. The cost of the trade was 10X the gain (~$50) so this ends up being a operating expense and not a true gain.
But you must continue to test your trading strategies with real money at some point if you’re going to do this! Just be smart about it if you can.
Moving forward through the day I saw an Anti-Nen Star / Crab on the 1hr which had given me hope for the long-term but the Ichi cloud was showing other possibilities.
“Cloud trading” is both an art and science and it’s something that I’m spending a bit more time learning about. Of course I’ll share more about what I use and how I use it if I find it effective (and I’ve been told it’s really effective).
As the price action approaches the cloud formations it’ll find resistance to either climb above / below or burst through it. Depending on the time frame you’ll get very different perspectives.
Bitcoin decided to head south and I put in a trade @ $39,680:
We definitely had a bit of butt-clenching moments but I put a stop loss (that almost got hit) but it didn’t take too long for the planned scenario to pan out:
Then, the fade (and profit)!
I wasn’t entirely sure if this fractal would play out that I had recognized from a few days earlier but it helped me think through exit strategies:
Ultimately I got stopped out a bit early on this mega-fade and pocketed $500+ in cash for the day’s work. Steak dinner tonight, again.
I honestly didn’t have any clue as to what she’d do yesterday and I have no idea what she’s doing today but it doesn’t matter as we can always Trade the Range™️ and profit from the volatility. She’s always ready to take your order (and money).
To infinity & bitcoin,
Make sure you introduce yourself in the new Discord! See you there!