Yesterday was a long slog trying to trade my way into profit on the Stormgain demo-trading platform in an uncertain market. There were also some useful lessons to be learnt from yesterday’s experience.
Lesson 1: Suspended Trading?
For one thing, I placed a short trade when Bitcoin appeared to be in a steep decline, but then I noticed that the price had stopped fluctuating when I was still $30 in the red. Had Stormgain suspended Bitcoin trading on its platform for a while or was it some kind of technical glitch?
I don’t know but I was worried that once Bitcoin trading resumed the price might be in a very different place, quite possibly much less favourable to my position. I had already racked up a couple of losses, but nevertheless, I decided to close out the trade and take a $30 hit.
Lesson 2: Set Aside Enough Time To Complete Short-Term Trades
Another thing I had not thought about before is the need to set aside a good block of time in which to trade if you want to close out your trades within a few hours of setting them. Yesterday, I was called away from my computer with a couple of trades still open and not in my favour…
As midnight approached I was still $15 in the red having clawed back some of my losses on a couple of quick and dirty Bitcoin scalps as confidence returned to the market.
However, I had also traded long on CrytpoIndex10 and it had been sitting in the red, either a tantalizing few dollars off, or two or three hundred or so dollars off. I decided to call it a night and rather than close out the trade in negative territory, I left the trade open with the “auto increase” option checked.
Lesson 3: Risks and Benefits of the “Auto Increase” Feature
What I have learnt about the “auto increase” option is that while it is highly risky if the market continues to go in the wrong direction, the auto increase interventions come at the new low market prices (in the case of a long trade) and that they can quickly turn a ghastly looking deficit into a healthy profit if the price begins to recover.
But would the CryptoIndex10 recover or drop away while I slept? The nightmare scenario was that I’d wake up and find the markets had plunged again and that my $52000 demo-account had been wiped out! But I felt that the correction we’d seen was just that, a correction to a very bullish market, and that there was a good chance that the position would still be open in the morning, not too far in the red, or that it would have closed out at the $150 “take profit” point that I also set.
Okay, I admit it looked as if I was taking a high-risk gamble on the downside to gain a lowish profit on the upside. But that’s what I did.
When I checked my account first thing this morning I found that the trade was $129 in the money and so I closed it out, giving me a profit for today of $114!
Lesson 4: Control Your Trading Itch! Only Trade When Your Indicators Align
And that brings me to the final thing I hope I’ve learnt, which is not to trade just for the sake of trading, or because you have the trading itch. On the few occasions that I’ve checked the markets today I haven’t found anything that I want to take a punt on.
My Preferred Trading Indicators
Yesterday, I tried using the Japanese heiken ashi candlesticks with the Moving Average showing, and the RSI Indicator, with just a single line set at 50. I like the system, but it was difficult for me to time my trades properly. Today, I restored the MACD, with the settings on 8,21, 5, (as recommended by Prophet Market on his YouTube channel). I like this combination of metrics, and escpecially the MACD which really seems to help me make the decision NOT to trade when working in the 1-day to 1-minute time ranges.
Demo Trading Results So Far
Approximate Daily results:
- 3rd Jan +$112 (3 + / 0 – trades)
- 4th Jan +$2,681 (7 + / 2 – trades)
- 5th Jan -$15 (7 + / 6 – trades)
- 6th Jan +$114 (1 + / 0 – trades)
Exact total profit so far = $2,907.55
Come along for the ride as I try to learn how to trade my way to a profit!
If you are an experienced trader, any advice would be welcome. Let me know where I’m going wrong, or post some tips in the comments below.
Check out Stormgain at: https://fwd.cx/WmUzkey5BqVp
Disclaimer: I am not a financial advisor and this is certainly not financial advice. These are simply the musings of a rookie trader playing with pretend money…