Hey everyone, I spent some time in the slack chatroom today, because its a great place to find the news fast and today with that morning drop in BTC, I wanted to see what news everyone heard. After the drop and a few daytrade opportunities, we were all discussing many subjects around China's plans and what might happen next.
I realize not everyone following my blog has access to the slack chatroom yet.
But, I was thinking I would share this thread I started, because I feel its a subject that might help others to think like a trader.
(I removed the names of the members involved in the discussion)
quickfingersluc [Today at 1:28 PM]
in #general
Thinking like a trader: I had this convesation with my wife last night. Because after making yesterdays video she was like: "hey your running out of bitcoin? But don't you think its going to be worth 100x some day? Why would you sell so much of your BTC?" She was not thinking like a trader.. I see things differently..Heres the thing, a trader grows his account.. You cannot be only thinking in BTC (or Fiat for that matter)... Even if i run out of BTC, im not out of BTC.. Let me explain:
quickfingersluc
Lets say you had 1 BTC when it was worth $2000 fiat, and you did nothing.. well today you still only have a 1 BTC balance and its now worth $4,300 Fiat.. So lets say you sell your BTC for $4,300 USTD.. well what do you have? Your account is still worth 1 BTC (or $4,300) its the same.. In trading we can rebuy with one click, so the balances are always interchaingeable .. so your not really out of BTC.. Traders see the pair, all you are trying to do is grow your account size...But i know, It's hard to get that simple idea straight in your head sometimes.. As an example, yesterday I was selling at 4,400 ..4,500, and then 4,700 (lets call it converting into fiat instead of selling) and today I converted Fiat back into 6 bitcoin (with a nibble) at $4,000 ish and then I sold 2 BTC at 4,350 ish (a few minutes later).. So whats my balance?? well lets just say its higher, whether you calculate that in BTC or Fiat, its much much higher than yesterday.. And what would have been my balance if i did nothing? Lower..
Just because you sell BTC doesnt mean your out of BTC, in order to trade you have to buy and sell. If you only hold, then you only grow when BTC goes up, and you cannot compound your money which Albert Einstein called the eighth wonder of the world...
Albert Einstein
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
Friend1
hey man, one day I'll get there, today, with all the market going down, I cancel all my planned orders and now I see that I could profit from all of those orders, It's hard to pass the psychological aspect of trading with the whole market crumbling down, coinigy not responding. I just stop trading.
Friend2
weird, i never experienced that, the reason why i didn't buy is because i ddint want to buy into a panic above a base
quickfingersluc
You get paid as a trader, for participating.. thats the job.. so in the example above, i only nibbled, because I was daytrading.. not position trading.. the last base is still 3900
Friend2
yeah i actually sold at a small loss today cuz when the rumor hit i thought it would panic below and get stuck at base
friend2
i guess it was quite foolish
quickfingersluc
90% of traders lose money.. your enemy is always emotions (fear and greed) but the chart never lies
Friend1
I had really small buy orders on lots of coins, I had place those orders on places that I thought the price would bounce and give me a small profit, like Luc said just to participate, but when the rumor came and the damn coinigy started to get buggy, I cancel all those orders.
Friend2
even if i lose a trade i almost always end a day on green thanks to your method
Friend2
in the last panic i butchered most trades and still walked away with biggest profit ever yet
Friend2
cause its so easy to take profits
quickfingersluc
It will all get easier in time.. it takes practice to keep a clear head and just read your charts..
quickfingersluc
How many of you consider the volume... When the crowd reacts, and there is emotions running wild, there is added volume.. How ould you have done if you only bought decent drops where there was a volume spike? https://imgur.com/jNpNxpA
Ok, so I just copied and pasted this discussion because I thought it might help others to develop a trader mentality.
Luc