BITCOIN
As can be seen above, Bitcoin has started to decline greatly; therefore, it now make perfect sense to exit my original ORDI trade as the price action has returned back to my initial entry level, only this time with a declining bias:
ORDI
Learning Points
- Ideally, I should have switched my trading position to go short when Bitcoin’s lagging span on the 4 hour timeframe looked ready to break the diagonal trendline. I was, however, behind schedule in the respect that I needed to complete my weekly planning before being able to focus, fully, on any possible trading opportunities. And, I wrongly believed that there would be a false breakdown that would see the price start to rally again. So the moral of the story: always, always, always listen to the price action. Get rid of any pre-conceived notions or ideas about what the price action is going to actually do. Rather, when in a trade, forever be prepared to switch position instantly when necessary.
- My reading of the charts is becoming more and more accurate over time: in this particular trade, I was able to see correctly that if the price action closed below the Kumo Cloud on the 1 hour timeframe with a typical “falling of a cliff” pattern (when the price action has had a steady and controlled price rise, then starts to decline) then it was advisable to close the relevant short positions.
- During this trade, I further practiced adding additional capital to the trade, and removing it without hesitation, as soon as the market confirmed that the initial entry position was wrong.
Next Action
- Update new trading spreadsheet with break-even ORDI trade as soon as possible.
- Continue to monitor the price action of BTC and ORDI everyday.
- Forever be prepared to switch trading position when in an active trade.
- Continue to monitor your psychological state closely to get rid of any pre-conceived ideas about which way the market should move (trade what the market shows you).
