Everyone learns better by doing, it's just a fact. You can watch as many videos on trading as you want, for as many years as you want, and still not know what you are doing when you go to get into a trade entry.
And I am talking about myself, if you didn't catch on to this, haha. These posts are like my own little trade journal that happens to be on a blockchain for others to learn from as well!
The last couple of days has been rough in the markets as we have just been trading in a range, at least during the times that I have been able to trade. I am thinking I need to start staying up more at night and trading because that is when the real action seems to happen. Pacific Time Zone in the US sucks for trading, haha.
Trade Entries Are Key
No matter what time frame, the biggest thing to master is your trade entries. These are seriously make or break. You also have to adjust your entries based on your trading style. Are you an aggressive market participant, or passive?
If you are an aggressive participant, which I am much of the time because I like to scalp trade momentum runs, you are buying or selling into the market, which causes market movement. Being aggressive can ensure that you are entering the trade, but you need to also take into account that your trades are going to cost more, and you may get some slippage, which is the difference in price when you are buying market orders. This can mess with your entry and cause you to have to make up more ground, including the higher commissions from the exchange.
If you are a passive participant, you are placing limit orders where you are basically waiting on the price to come to you and fill your order. These orders are cheaper on fees when they are filled, but not guaranteed to be filled. So if you are sure on a trade, you need to make sure you are putting your limit order in an area where you know it will be filled, if not, you are likely to miss the trade all together.
So there are pros and cons on both sides of the field. People can also play it both ways. They can have some larger limit orders set for say a longer swing trade, then also use market orders to jump in and out on some scalp trades while the swing trade is waiting to play out.
Trade entries play a huge role in how much you are going to be making on a trade, if you make anything at all. When playing choppy markets, you have to be especially careful because things can move quickly in one direction or the other and can get you in some hot water real quick.
My Attempt At Scalp Trading Choppy Markets
I have been trying to play the quick up and down swings on the 1-5 minute charts. Basically just trying to scalp every dollar I can out of the market, but getting myself chopped up in the process. I am realizing that I am also not working with enough capital yet to be able to make anything on those little choppy movements. The one reason you need to be playing with more capital when you are trying to scalp trade choppy markets is that you are going for smaller percentage moves for quick profit.
Making trades like this can get expensive when you are using market orders to get in and out of the market quickly. I really love the idea of scalp trading as it appeals to my ADHD, lol, but when I am not playing with enough capital, you get eaten up by exchange fees.
Paying Exchange Fees and Market Tuition
So when you are trading on any exchange, you get hit with a commission fee from that exchange. These fees, most times, are charged on both the buy and sell orders. So you are getting hit with an exchange commission every time you get in and out of a trade, especially on leverage trading platforms like I am using.
Anyway, although the exchange has cheap fees, they still add up, and when you are getting in and out as much as I was, that added up quick. But hey, that's the cost of a market education! I look at every loss as paying tuition to the market. So instead of losing money, I am having to pay for a lesson that I am having to learn.
Be careful out there in these crazy markets. They can really get you chopped up when things are in consolidation mode. I know I wrote in my last article that it is easier to be a bull even in bearish times, but... that can get dangerous when the overall trend is super bearish, so be safe. The idea still applies though that for some it is easier to wait for bounces and scalp the bullish bounces, but in this kind of market we are currently in, it's best to find the trend of the day, and ride the whale waves. It's just safer than trying to go against.
Stay safe out there everyone!
Be Cool, Be Real, and alwasy Abide!
Nothing said is financial advise.
This is for educational and recreational purposes only!
Stay safe in these volatile markets and don’t get rekt!
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