Crypto trading truth: Don't bleed during dead zones

[Seth Walsh]

Retail discretionary trading only has a positive expectancy when you capture outsized PnL during periods of sustained market price displacement (i.e., trends).

The idea is simple. Coins are trending up?

• Buy one
• Hold it
• Don't have a take profit level
• If you give back your open trade equity, it means the trend wasn't macro enough anyway. Stoploss hit, likely moved up to breakeven. You don't lose.
• Ride the trend 'til the end. If it turns out you caught a macro trend, you could hold a trade (and nurse it) for months or a year, or longer.
• Hold your position. Set up smart dynamic risk limits. Your biggest killer is taking profit too early or having a trailing stoploss set too close to the current market price
• Design your risk limits to allow for larger than expected intratrend volatility
• When the trend fully breaks down, you will eventually exit your trade in tons of profit. Your trailing stoploss will tighten once market price volatility collapses.
• Likelihood at this stage is you'll have capture the majority of a trade and realised very good PnL.

When the market are not like this. DO NOTHING.

It's not hard at all.

Compound your home runs.

 

[Oliver12]

seth with another banger thread

 

[Greyascension]

Seth I neeed thissss. Are you buying in on whats happening on the 12th

 

[zer0688]

• Ride the trend 'til the end. If it turns out you caught a macro trend, you could hold a trade (and nurse it) for months or a year, or longer.
• Hold your position. Set up smart dynamic risk limits. Your biggest killer is taking profit too early or having a trailing stoploss set too close

so you're saying you almost can never tp at the peak? your tp is the trailing sl hitting?

 

[Seth Walsh]

so you're saying you almost can never tp at the peak? your tp is the trailing sl hitting?

Yes. That's correct. A trend can theoretically last indefinitely, but psychologically no one prepares for that. Yet many people think they can "determine a peak price"? It's impractical and a losing strategy.

The opportunity is the trend. You don't know if it'll exist, persist, or how long it'll last. The best strategy is hopping on board and having an initial stoploss, then a breakeven stoploss, then if price continues in the direction of your position, you set up a trailing stoploss that's initially loose, but doesn't tighten with time, only tightens a lot when volatility explodes and trend directionality weakens (i.e., less consistent new highs). See Cocoa Futures circa 19-29th April 2024.

 

[Seth Walsh]

Seth I neeed thissss. Are you buying in on whats happening on the 12th

Not sure what you're talking about. I never buy stuff based on news or announcements

 

[Greyascension]

Not sure what you're talking about. I never buy stuff based on news or announcements

Ahh okay mb it's some trump stuff

 

[zer0688]

Yes. That's correct. A trend can theoretically last indefinitely, but psychologically no one prepares for that. Yet many people think they can "determine a peak price"? It's impractical and a losing strategy.

The opportunity is the trend. You don't know if it'll exist, persist, or how long it'll last. The best strategy is hopping on board and having an initial stoploss, then a breakeven stoploss, then if price continues in the direction of your position, you set up a trailing stoploss that's initially loose, but doesn't tighten with time, only tightens a lot when volatility explodes and trend directionality weakens (i.e., less consistent new highs). See Cocoa Futures circa 19-29th April 2024.

I hypothesized so too but I've got almost 0 practical experience to test it, anyway nice thread, are you a professional trader? and where did you learn trading from?

 

[KeepCopingLads]

Retail discretionary trading only has a positive expectancy when you capture outsized PnL during periods of sustained market price displacement (i.e., trends).

The idea is simple. Coins are trending up?

• Buy one
• Hold it
• Don't have a take profit level
• If you give back your open trade equity, it means the trend wasn't macro enough anyway. Stoploss hit, likely moved up to breakeven. You don't lose.
• Ride the trend 'til the end. If it turns out you caught a macro trend, you could hold a trade (and nurse it) for months or a year, or longer.
• Hold your position. Set up smart dynamic risk limits. Your biggest killer is taking profit too early or having a trailing stoploss set too close to the current market price
• Design your risk limits to allow for larger than expected intratrend volatility
• When the trend fully breaks down, you will eventually exit your trade in tons of profit. Your trailing stoploss will tighten once market price volatility collapses.
• Likelihood at this stage is you'll have capture the majority of a trade and realised very good PnL.

When the market are not like this. DO NOTHING.

It's not hard at all.

Compound your home runs.

Off topic but did you get in ZEC

 

[zer0688]

Yes. That's correct. A trend can theoretically last indefinitely, but psychologically no one prepares for that. Yet many people think they can "determine a peak price"? It's impractical and a losing strategy.

The opportunity is the trend. You don't know if it'll exist, persist, or how long it'll last. The best strategy is hopping on board and having an initial stoploss, then a breakeven stoploss, then if price continues in the direction of your position, you set up a trailing stoploss that's initially loose, but doesn't tighten with time, only tightens a lot when volatility explodes and trend directionality weakens (i.e., less consistent new highs). See Cocoa Futures circa 19-29th April 2024.

Chart peak to bottom from 15-29 april, brutal with no sl

 

[Seth Walsh]

I hypothesized so too but I've got almost 0 practical experience to test it, anyway nice thread, are you a professional trader? and where did you learn trading from?

Yeah I am but not a professional discretionary trader. Any discretionary trading I do is with my own money, and trading like this is the only way I've learned how to make money, over the past 10+ years.

I learned from old commodity traders testimonies, Turtle traders, Richard Dennis, Bill Dunn etc..

Discretionary trading is unique. Most "trading firms" just exploit latency, microstructure inefficiencies, order flow, tech stack disintermediation etc AT SCALE.

Trendfollowing is one of those things you can't scale but it's such a convex payoff if you can manage the risk. The golden-ticket that no self trader realises is that they DONT HAVE TO TRADE every day. They've no investors, no public fund they're running. Trading discretionarily in choppy markets is negative EV. Trading like 4 times a decade and REALLY REALLY capturing mega trends can put you in a better position than an "institutional trader" who aims to engage in the markets frequently.

You're not looking to trade frequently. That's the trap. Just set yourself up to compound home runs then sit out.

 

[Seth Walsh]

Off topic but did you get in ZEC

Nope

 

[KeepCopingLads]

Nope

well what are you eying

 

[Seth Walsh]

well what are you eying

Nothing