Trading plan for Dec 2020 - April 2021
Updated
I have been trading for 4 years now, and have been through bull markets and bear markets.
I've learnt a lot about the markets, but I've learnt even more about myself.
Trading will give you incredible self-knowledge, because it tests your emotional relationship with uncertainty.
You have complete creative freedom in an environment where riches and ruins are both in ample supply.
This is why "Trading in the Zone" by Mark Douglas is my bible in this space. You trade against your reflection.
My trading journey looks like this:
2017 - naivety. Permabull, listening to sparkly influencers because they reflected my boundless optimism
2018 - anger, denial, bargaining. Realising that the market doesn't care about your goals or narratives
2019 - questioning. If the markets are chaos, and TA is a bit of a comfort blanket, what CAN I control or influence?
2020 - baby steps towards detachment. I approach 50% of trades with position sizing and risk management
I believe I'm halfway towards being a capable trader at this stage.
+ A good percentage of my setups and analysis bear fruit
+ I don't get emotionally involved with any assets
+ I force myself to consider the best, worst, and 'middle case' scenarios, and WRITE THEM DOWN in advance
Now, when I get rekt, rather than blaming cryptogoober4561 on Twitter, I can look back at my notes and see that I took on the risk and I'm responsible for the outcome. I can see the pattern of failures.
When I win - it's all documented, so my brain can seek out and identify similar opportunities in the markets.
What I DON'T do is just "ape in" on things... that's a lack of confidence in yourself, disguised as "trusting the randomness of the markets".
So what's the missing 50%?
+ I am very impatient, by nature. I get extremely bored by slow-moving setups. I crave dopamine hits
+ I don't believe in myself enough. I put more trust in the opinions and ideas of someone, anyone else
+ I trade for reasons other than making money. I trade because I have a massive chip on my shoulder
Can you see yourself in any of these flaws? These are very common trading mistakes and they impact many traders (if you trade crypto, it's very likely that 3rd one is your biggest disadvantage).
So what's the path forward?
"Discipline equals freedom" - Jocko Willink
Discipline is the only way to debilitate your inner opponent, get out your own way, and win long-term.
I believe that discipline and commitment is the missing ingredient.
So my plan for Dec 2020 - April 2021 is pretty simple:
+ Add funds month on month, with disposable income only. Stop trying to time the market
+ Keep an eye on trends - but stop trying to snipe tops and bottoms
+ Maintain a watchlist of a few assets and a few info sources in macro-crypto, stocks and DeFi
+ Enter into positions on good setups
+ Sell at pre-agreed levels - 30%, 100%, 200%
+ Protect capital by - keeping position sizes small, only risking 1 x position on 1x idea, and using stops
+ Using micro positions on Uniswap where risk management is a myth
Best case, I build up a portfolio that ultimately rides a bull trend.
Worst case, a fair number of my positions dwindle, but I only used funds that would have gone towards beer, clothes I didn't need, gadgets I don't use.
Middle case - and most LIKELY - I make a modest profit, lose out on some big wins and losses (due to set sell points), but ultimately become a disciplined trader OVER TIME
That's the plan.
In terms of WHAT I am trading:
+ Stocks - ETFs and sector leaders. I want to benefit from macro trends
+ Crypto - BTC, ETH and a few smaller positions in promising newcomers with strong narratives
+ DeFi - DEFIPERP asset on FTX, and micro-positions in DeFi assets with an active team + hype
In all cases, I'm looking for chart history, bottoms, or significant dips to support levels.
In terms of how I will distribute capital:
30% Stocks
30% Crypto
10% DeFi
30% Cash
I am going to run this system consistently until April 2021, and then re-assess.
In this time, we may see a crypto rise and crash, stock market boom and bust, but the system will remain the same.
The goal is to become a disciplined trader - and to finally get out of my own way and commit to a system.
Thank you for reading! :)
I've learnt a lot about the markets, but I've learnt even more about myself.
Trading will give you incredible self-knowledge, because it tests your emotional relationship with uncertainty.
You have complete creative freedom in an environment where riches and ruins are both in ample supply.
This is why "Trading in the Zone" by Mark Douglas is my bible in this space. You trade against your reflection.
My trading journey looks like this:
2017 - naivety. Permabull, listening to sparkly influencers because they reflected my boundless optimism
2018 - anger, denial, bargaining. Realising that the market doesn't care about your goals or narratives
2019 - questioning. If the markets are chaos, and TA is a bit of a comfort blanket, what CAN I control or influence?
2020 - baby steps towards detachment. I approach 50% of trades with position sizing and risk management
I believe I'm halfway towards being a capable trader at this stage.
+ A good percentage of my setups and analysis bear fruit
+ I don't get emotionally involved with any assets
+ I force myself to consider the best, worst, and 'middle case' scenarios, and WRITE THEM DOWN in advance
Now, when I get rekt, rather than blaming cryptogoober4561 on Twitter, I can look back at my notes and see that I took on the risk and I'm responsible for the outcome. I can see the pattern of failures.
When I win - it's all documented, so my brain can seek out and identify similar opportunities in the markets.
What I DON'T do is just "ape in" on things... that's a lack of confidence in yourself, disguised as "trusting the randomness of the markets".
So what's the missing 50%?
+ I am very impatient, by nature. I get extremely bored by slow-moving setups. I crave dopamine hits
+ I don't believe in myself enough. I put more trust in the opinions and ideas of someone, anyone else
+ I trade for reasons other than making money. I trade because I have a massive chip on my shoulder
Can you see yourself in any of these flaws? These are very common trading mistakes and they impact many traders (if you trade crypto, it's very likely that 3rd one is your biggest disadvantage).
So what's the path forward?
"Discipline equals freedom" - Jocko Willink
Discipline is the only way to debilitate your inner opponent, get out your own way, and win long-term.
I believe that discipline and commitment is the missing ingredient.
So my plan for Dec 2020 - April 2021 is pretty simple:
+ Add funds month on month, with disposable income only. Stop trying to time the market
+ Keep an eye on trends - but stop trying to snipe tops and bottoms
+ Maintain a watchlist of a few assets and a few info sources in macro-crypto, stocks and DeFi
+ Enter into positions on good setups
+ Sell at pre-agreed levels - 30%, 100%, 200%
+ Protect capital by - keeping position sizes small, only risking 1 x position on 1x idea, and using stops
+ Using micro positions on Uniswap where risk management is a myth
Best case, I build up a portfolio that ultimately rides a bull trend.
Worst case, a fair number of my positions dwindle, but I only used funds that would have gone towards beer, clothes I didn't need, gadgets I don't use.
Middle case - and most LIKELY - I make a modest profit, lose out on some big wins and losses (due to set sell points), but ultimately become a disciplined trader OVER TIME
That's the plan.
In terms of WHAT I am trading:
+ Stocks - ETFs and sector leaders. I want to benefit from macro trends
+ Crypto - BTC, ETH and a few smaller positions in promising newcomers with strong narratives
+ DeFi - DEFIPERP asset on FTX, and micro-positions in DeFi assets with an active team + hype
In all cases, I'm looking for chart history, bottoms, or significant dips to support levels.
In terms of how I will distribute capital:
30% Stocks
30% Crypto
10% DeFi
30% Cash
I am going to run this system consistently until April 2021, and then re-assess.
In this time, we may see a crypto rise and crash, stock market boom and bust, but the system will remain the same.
The goal is to become a disciplined trader - and to finally get out of my own way and commit to a system.
Thank you for reading! :)
Note
So far so good. Adding funds week on week, very disciplined position sizes, and less anxiety about missing the next big ponzi.Note
Getting the FOMO bug seeing BTC near ATH, but I'm sticking to the plan - one position per week. It's quite good as it forces you to be more disciplined and really decide what to get into.Right now looking at central exchange DeFis (DeFi 'majors') like YFI, DOT, LINK...
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