My Transition To Enlightenment: 6 Days Of Trading - How I Reach >30% Gain With Low Risks?

Introduction

It is the 6th day after starting trading crypto currencies and I think it is time again to update you what I'm discovering, how I'm developing my trading method(s), how I try and manage the trading risks, and give you detailed insights in achievements in terms of profit/loss. If you are interested in my previous articles on trading experience, find the links at the bottom of this email.

Since last Saturday I'm trading almost every day, sometimes during the day, sometimes in the evening, and also sometimes when I actually should be sleeping. I find trading, super interesting and I'm driven by the successes of each trade. It is not the money that drives me, but it is tremendous rewarding to see my adopted method(s) being successful whilst he a newbie without any actually knowledge of the trade trading. Coming weeks I try to fine tune my method(s), and maybe I'll try some new methods as well.

My Results

Since last Saturday I increased my initial deposited funds with 36,7% with 21 buy/sell combination.

For those interested the stats for each trade combination (buy/sell), I've included a table below that gives an overview of all my trades, the cryptos I traded, the date and time I closed a trade combination (buy/sell), the profit/loss I made on a trade combination, and the time a trade combination was open. In the last column I summaries the daily profit/loss which is a percentage against the maximum amount of funds at any given time I had in trades during that day; This is most of the time my complete available funds, and sometimes only a part of it.

With (sometimes) really small profits on a trade combination, I was still able to make very decent profits. For instance today with not more than 2% profit on a single trade combination, and 3 trade combination (out of a total of 6) below the 1% profit, and most of the time only 30-40% of my available funds in an individual trade, I was still able to end up with almost 4% profit/gain of my entire available funds. Not bad at all, I would think!

What did I do to manage the Risks? 

The first days I was quite clueless in what I was doing, and I took quite a bit of risks. I had a position open for almost 40 hours (trade#3), without checking the progress in the mean time; With luck this trade combination made profit. On 13th March, I continued to take quite a bit of risks in trading in Namecoin/NMC; This currency had a super high volatility with only a view contracts being bought/sold per minute, increasing the risks that I could not sell my position when I wanted for the price that I wanted. But as you can see, NMC resulted in the most profit of all trades done so far (note: in my previous post, I made an error in calculating the profit for trade#9, I reported a profit of more than 13%, but in reality this was 2,915% as shown in table above).

Since 14th March I decided to take less risks, to trade in high volume currencies only; Ethereum, Dash and Monero, with Ethereum and Dash having by far the most trade volume.

In list below I try to summarise how I try to manage the risks in trading. Note that I'm still learning and not always sure what risks I take, and how to classify the things I do in terms of risk level.

• I trade in high volume currencies only: high trading volume gives high velocity and allows to sell at all time my open positions; I look for multiple contracts being traded per second.
• I look for high activity and volatility: at various times a day a specific currency can have high volatility and activity in trading, whilst at other times almost nothing happens in number of trades. I generally trade at times of high activity, like last night in Ethereum and Dash (see trade#16-#20 in above table).
• I go in when I believe the downward trend will be broken shortly: It is even better to buy when the trend is upwards, but when I wait for the upward trend to become real, I noticed I have little margin to the point where the currency comes down again. I must say, I still do not look at all the information my trading platform presents on the trading screens, which means that I miss out on information to decide the 'perfect' moments to buy and sell.
• I buy extra when a currency goes down in value right after I bought it: While the currency is going down further I try to predict the bottom and buy at that level. I usually buy the same amount of Bitcoin value so that the breakeven price is half the difference of the 1st purchase and the 2nd purchase. In a couple of situations I even bought a 3rd time, since the currency went so far down, even after the 2nd purchase, that I didn't expect the currency to go up in relative short time to the value at initial purchase. So far I was successful in this approach, and never had to stay in position for too long to at least make some profit.
• I'm not greedy; I'm very ok with little profits; I rather execute more trade combinations with low profits, than only a few trade combinations with high profits: I actually think this way of trading is important to de-risks the trades, to prevent making high losses. Yes, sometimes I miss out on another 10% additional profit I could make in a matter of minutes, but I think I need to look at more variables to be able to predict better a continuation of upwards trends.
• I'm constantly watch the price development when in a trade: I hardly do other activities; Trends can change very quickly, within seconds!
• I'm in one trade at the time
• I close my positions when I leave my laptop for more than a couple of minutes
• Data that I primarily use to determine trends (all presented in one screen by the trading platform I use):
  • Actual price of the currency: this is generally updated every second.
  • Candlestick charts of last 6, 12 24, 48 hours; Candlesticks are summarising the currency value for a specific periode of time; It gives information on open/close and the low/high values for the selected time period; I use a 5 minute view, the smallest time periode available by the trading platform I use.
  • Outstanding contract: Mainly relative number between buy and sell contract; When there or many more outstanding Buy over Sell contracts, I use this as indication the price may go up; The other way around, this indicates to me the price may go down (this is for sure not always the case, hence I think I need to look at other variables as well; I'm not even sure if this actually can give some real information, but so far it did me more good then bad)
  • Number of contracts bought/sold per second: In a table all contracts bought/sold are listed and I just look if last seconds a lot of contracts are bought/sold. This table also gives more details behind the candlesticks, and can sometimes be useful to look at when deciding to buy or sell since the candlesticks are not necessarily updated every second.
  • Chatbox: other short term traders may advise, may tell you what they are doing, may notify when activities are increasing etc. Be aware of FAKE information, since either others are trying you to get into same currencies and position they are in, or they just want to be funny or maybe even harm others.

Disclaimer

None of the information given in this post is to be regarded as an advise to you; It is just informing you how I manage trading, and what I do to come to the results I present to you in this post. It is meant for informative purposes only. By no means I pretent to be a specialist, and by no means I give you advise to followup on whatever I have written in this post.

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I'm ( and I hope also some other Steemians) are very much interested in your successes, your opinions, your methods.

So, let us know what you think of my approach; Let us know what your approach is; Let us know what your favoriete trading method is. 

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"My Transition To Enlightenment" series: Previous articles

My Transition To Enlightenment: How To Trade?

My Transition To Enlightenment: First Hours Of Crypto Trading

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