The Art of Losing Money!

in LeoFinance2 years ago

Expecting more sarcasm from me here are we?! Sorry to disappoint you, but this is in fact a pretty serious post...lacking my typical sarcasm!

Let's take a look at the chart below.


This is the textbook way of losing money. You sell low expecting a fall in price, instead the price rallies. Or, you buy high expecting a price move up and the price crashes and you sell low. The chart above is the 4-hourly HIVE/USDT chart from bittrex and the trade pointed out is a real trade. In fact, it is my own trade! But where's the art here you may ask..? Bear with me for a while!

A few weeks back, dada messaged on our discord that he just lost north of $4000 in a single trade. That is a massive amount of money. A few hours later dada messaged us again that he recovered the money back and explained us how he did it. But how he did it was not the most important part of the message he sent. The thing that hit me hard and still stuck with me is when dada said, "Nobody takes my money and lives to tell the tale."

That swagger right there, that confidence is what I wanted to emulate with my trading much money I make is secondary. As kenny Rogers said, "You never count your money when you're sitting at the table. There will be time enough for counting when the dealing's done!"

Alright, back to my trade!

Do note that when I use the term "SHORT" here, it's not in the traditional shorting I talk about as I am not borrowing any asset to trade. But I'll use the term short to reflect the concept of shorting a trade to make it easier for me to write.

It is no new information that I scalp HIVE regularly and my entire trading volume was generated from the profits of HIVE scalping. I started out with 2000 HIVE and had slowly reduced it to scalping with 1000 HIVE only and removing from the remaining 1000 to a separate account for just holding.

A few days back, the entire market was in a bearish mood and I had no liquid USDT left to buy the juicy dips. I waited for at least one of my positions to rally and let me liquidate the position to enter some other trades. I waited and waited and nothing happened. I was getting a little frustrated. Out of frustration, I made an impulsive decision.

HIVE was just starting to recover from its dip down to 17 cents and was hovering around 22 cents. With the state of the market being still generally on a downtrend, I shorted 1000 HIVE at 22 cents. Yep, you heard me right. 22 cents!

I was expecting to buy back at 18-19 cents and keep repeating to generate some liquidity to enter other positions. But as it always happens, I am the best indicator of a price rally. When I sell, shit starts to smoke weed and go high! And rally HIVE did! So there I was sitting with $220, and prepared to say goodbye to my 1000 hive as I could not see it returning to where I sold, not anytime soon.

But then the voice in my head kept reminding me, No one take my money and lives to tell the tale!

I went ahead and made more impulsive decisions to try and cancel cancel out my first impulsive loss! I took the remaining 2000 hive that I was saving....every last bit of it and placed sell orders starting from 33 cents all the way up to 38 cents.


My first batch of sell and buys hit pretty smoothly...withing 3-4 hours.

But the whole process wasn't nearly as simple as it looks like on the above image. It involved a lot of calculations in my head and a LOT more patience to set the sell and buy orders to not only recover my position but also to come out of a shit trade with significant profit. This was very important for me to show myself I can do it!

@zayedsakib, now you know why I couldn't buy back when ever the price dipped to 30 cents, 29 cents, 28 cents and so on! Now you know why I was so stubborn on my target!

Patience paid off and my target filled this morning! The dealing's done, now we count the money!

I started off with 3000 HIVE (1000 that I sold off at 22 cents + 2000 from my egg's nest).

And right now I have 2600 HIVE + $220.

  • 3000 HIVE - 2600 HIVE = $220
  • i.e. 400 HIVE = $220

So turns out I sold 400 HIVE at a price of 55 cents huh! I'll take that deal every day of the week!

Every chart in the entire cryptoverse will tell you that HIVE never touched 55 cents in months, so I could not have sold any hive at that price. But the fact is, I DID.

And that ladies and gentlemen, is the Art of Losing Money!

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Posted Using LeoFinance Beta


You know doc, I have traded most of my adult life (no all my adult life and some of my teenage!), and now I don't really think about how I trade, and why I enter a position, when, how I exit. It has sort of become muscle memory. I only think, when I see something interesting happening. A good trade, or a bad trade. I pay attention to the aesthetics of the move :) But, now that I read your trading posts, the passion you put in it, it is honestly very uplifting to me. First, I want to thank you for that. There are millions of trading related articles I have read over the last 28 years. I am not saying yours are towards the best in terms of new material (as there is rarely new material in trading), but yours is cetainly towards the top in terms of passion and grit! I can literally see you grinding your teeth! That means a lot to me!

Ok, that's the background. I will start the reply with a quote: from Paul Tudor Jones

Every day I assume every position I have is wrong.
There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market.
You adapt, evolve, compete, or die.
Trading is very competitive and you have to be able to handle getting your butt kicked.

If you read these words from one of the most successful hedge fund manager of the world, you will see the analogy with sports, soccer! In trading, first you lose, then you learn how not to lose, and then, and only then, can you get on the road to generating a consistent income.

Let me mention a simple account size management process, this is widely used by many traders all over the world. It is a tried and tested method.

I will use your Hive trading account size.

Start with 1000 hive (or any multiplier). Your initial goal is to run the account up to 2.5 times your starting capital, or 2500 hive. When you reach this goal, Withdraw your starting capital 1000 hive, plus a profit of 250 hive. So you have withdrawn 1250 hive. Leaving you with 1250 hive. This is now your capital (treat it as capital, nobody takes your money!) Now your goal is to run the account up to 2.5 times again, to 3125 hive. Once you get there, do the same process again. Take half out. Reset. Repeat.

The time it takes to do this isn’t critical. You aren’t focused on achieving your target in a week or a month or a quarter. You’re simply following your plan and taking your setups. What this does is something two fold, first, you stop counting money!, second, you can never go belly up, as after the first rinse and repeat (and you are expert at this for your studies), you don't have any systemic risk.

Good luck, Doc.

I too could see it:3 we know doc a little too well😅

That strategy might actually do me some good! Might work as a reverse catalyst and stop me from making impulse driven trades.

Hehehe :v :v

I am actually going to start implementing this strategy. It would have been much simpler if we only traded Hive, but we also need to divert some of the profits to different trades. But as dada said, the time doesn't matter ;)

but yours is certainly towards the top in terms of passion and grit!

Thank you so much dada! You guys know me all too well! When I enjoy something, I do it with all the passion I can muster. Once the passion is no longer there, I know it's over.

Going to the quote from Paul Tudor Jones

Trading is very competitive and you have to be able to handle getting your butt kicked.

This is gold hehehe! A lot of the times new traders tend to quit after losing on a few trades initially and I would have too if you didn't keep constantly reminding us it's fine! In fact, I have LOL! I started doing a few small trades back in 2017 bull market and obviously they all went horribly wrong an I gave up xD xD But I'm glad I restarted and this time with proper conviction!

The account size management is something I need to start doing right NOW! I had grown my account considerably and then I get cocky and lose a decent chunk of it --__--

Some people only learn through their own experiences. But at least they learn.
Good luck for the future

Absolutely! Learning through experience is the best form of learning! That is organic learning, tried and tested and the knowledge stays with you for a lifetime!

I sold a good sizable chunk when it pumped from 11-18. Then bought back at 16- sold at 36 when it rose to 38. Then bought back at 30 and sold at 38 on the second rally! And bought back at 28-29:) im not going to showboat my profits, as like a moron i used much of it to fund my idiotic shits!:3 now i have an amount where 1 cent move at either direction makes my pnl move 25$s:3 all in one and a half months patience!😅 so yeah.. As youve guessed, im an avid follower of yours:3

বেচে থাক বৎ্স hehehe!

But now you're done spending on your idiotic shit! It's time to accumulate ;)

Also, don't use your entire HIVE portfolio in a single trade keep some for recovering from mistakes....because if you are an avid follower of mine, you will make mistakes xD xD

A weird question: Cab you name dada? the person/big brother you are referring to.
I also did some scalping but with other tokens as I don't hold hive on exchanges. With one of my trade the ame thing happened and I ended up buying hive and putting in utopis lol... no I don't have any Uniswap :D

no I don't have any Uniswap

LMAO That's the first thing I was actually gonna ask you xD xD Utopis is a great project long term, I was speaking with chrono today and he plans to add more divs as developments continue to progress on HIVE.

Can you name dada?

Hehe that is the mystery isn't it! I'll give you a hint, it's pretty easy to figure out if you hang around in the BDC discord once in a while or if you read the BDCommunity's weekly magazine Turni ;) Let me know if you figure it out btw, only one person has figured it out so far :D

Thanks i will try.

I keep most of mine powered up. Saving it for when it really good up there. I haven't really learned to trade yet, so just leaving it. Lol

That's not a bad strategy either! You can keep growing the stake with with curation, much much safer than trading!

I know the feels...

don't trade to aggressively. The next stop for Hive should be at 70-80 cents.

Yeah I usually don't trade aggressively, but this time I kinda had to :D

I looked at your analysis. So you're going for the 2 small jump followed by a large jump pattern...? It does seem very plausible, we will need volume though. The volume has sharply declined since the very recent spike.

But regardless, the sudden spikes followed by a sharp correction is something I like a lot as that gives a nice margin for profit!

that line I drew in is a very rough idea how things could pay out. I mainly wanted to point to Hive's large spikes and that when another one occurs it will probably not go over the resistance drawn in the chart.

well it must of be a great post cause you have a lot of upvotes. being said. point taken.

Cheers :)

Man... I did not understand a single word of that. This is why I never buy or sell Hive to make a profit....

Ha Ha! I can totally comprehend what you're saying :D I too used to understand zero of these stuff a couple years back...tried, lost money and quit xD xD

And then came back..... read the instructions somewhere and made a fortune.

Not sure if I'd call that a fortune yet, but yes...A decent start I must admit 😄

True story!

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Check out the last post from @hivebuzz:

Feedback from the March 1st Hive Power Up Day

And that ladies and gentlemen, is the Art of Losing Money!

Your art made me silent! Whatever the other coins are doing, we can make things work out from our own HIVE, You are the example of that.

Precious one brother!

Exactly Minhaj, HIVE is a trader's blessing! :D

Art of money