Trading – Experimentation & Realization

The Expected “Unexpected” Dump

The past 48 hours have been chaotic in regard to financial markets, as a whole. We have experienced yet another heavy correction for BTC and the broader Crypto market. Fortunately, I have been trading lower time frames of late, and so have been spared any significant damage. I have been trading the 15-minute time frame a lot lately, as well as a few other lower time frames.

Quick trades with tight stops spared me what could have been a rather costly experience. The market has been rather difficult to read over the past few months, and as a result, I have been focusing on very short-term trades. If the tide suddenly turns, stops trigger, and bloodshed is avoided. Lately, it seems like any shoe could drop, at any time.

This current market is not a market you want to find yourself on the wrong side of. And so, along with trading lower time frames, I have begun experimenting with scalping. Generally, I have always been more of a swing trader, and often on the “longer” side of things. I have always enjoyed building and hedging positions with a much longer time horizon than a day or two.

However, as mentioned, I am finding this particular trading approach a little tricky at the moment. I initially began trying out strategies on the 5-minute time frame. However, after testing a few ideas, it just didn’t “gel”. The profitability just wasn’t quite there. However, using the 5-minute in conjunction with the 30-minute seems to be hitting the spot.

Never Abandon Risk Management

Something a trader should never do is abandon risk management for the sake of profit. Even though one might be utilizing an alternative strategy, there should also be an alternative set of “rules” to adhere to. Effective trading comes down to sticking to your predefined strategy and rule set.

You will be surprised how many people will read this, agree in their mind, but don’t exercise any form of risk management. Choosing simply to “buy” and then “sell” later on at a higher value. Unfortunately, that’s nowhere near good enough, if you are looking to extract gains from this market or any market.

Going to battle without a weapon can be equated to choosing to trade without a predefined rule book, it’s suicide! I have been hammering away at different strategies over the past two days or so because I know how important it is. I think I only had about three hours of sleep last night.

Once I get “onto something”, I often exhaust myself until I find what I am looking for. I have not spent enough time running this new technique. However, at this stage, it appears to be rather profitable. I will only truly know within a week or two. Sometimes “momentary” price action fits your strategy like a glove, only to later buck you like a rodeo bull!

Final Thoughts

Weekend price action usually tends to be rather “flat” to say the least. So, it’s probably not the best time to be testing strategies. Anyway, I guess I am being eased into it, which helps I guess. It’s important to note that different market conditions require different approaches. As a trader, one should always have multiple “tools” in their arsenal. All the best, catch you next time!

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