Trading Journal #3 - January 11th, 2022

Active Trader's Perspective on Trading and Markets

If you regularly pay attention to the crypto market, you may have noticed a significant increase in prices from the bottom. Many traders are wondering if this is the true bottom or just a temporary bear market rally.

The reality is that no one can accurately predict the market. Debating whether or not we have reached the bottom holds little value. Instead, it is important to focus on how to take advantage of short-term market regimes.

As a trader, your job is not to predict where the next bottom is. Your job is to manage risk and make educated bets on the market. Amateurs tend to think in absolutes, while professionals think in terms of probabilities.

Market sentiment

The graph illustrates the proportion of cryptocurrencies trading above their 200-day simple moving average. A 200-day moving average provides a long-term perspective on the market. The significant increase in the percentage of coins above this threshold suggests sustained strength across the entire cryptocurrency market, not just Bitcoin.

In the past 30 days, APT has been the top performer among leading coins in the market. I have been actively trading this coin, starting at a low of $6 and following the short-term trend. While it is uncertain if the upward trend will continue, there is potential for further gains. My strategy is to continue buying as long as the trend does not reverse, and to set a stop loss to limit potential losses. It is important to focus on long-term success and not get too caught up in individual trades.

Performance

I have been capitalizing on the current trend of small alternative coins spiking and outperforming Bitcoin. The chart above compares my performance to that of BTC, but it should be noted that it is not entirely accurate as it only reflects my closed positions and not my current holdings.

My trading strategy focuses on identifying breakouts and managing risk effectively. While the market can be highly volatile, it is possible to profit from it with the right skills. In 2022, I refrained from trading for the majority of the year due to market downturns. However, I plan to improve my short selling strategy in the upcoming year to capitalize on bearish market conditions.

As a trader, it is important to always be developing one's skills and staying competitive in the ever-evolving world of trading. If a trader does not grow and seek to improve, he will be left behind. It's a never-ending process of self-development and growth.