18.01.2023
Today‘s review is about a play I got liquidated on, which I am not too proud of! There are no excuses, I did not respect my risk management and got punished. I don‘t like to write this, but I am doing this for transparency!
The only good part about this is that the $ loss was still small. I am not playing big, as I do not have the funds to do so at the moment. I also did not lose all, as I only use about a third of the funds I have in the the trading account for margin. So I am still fine, but this is no excuse at all!!
Let‘s get into the trade/s!
I started trading MAGIC/USDT as it was moving higher along BTC, which did not really stop at that day 13th of Jan. and dragged MAGIC with it. The cryptocurrency MAGIC is also way more iliquid to Bitcoin or Ethereum for example, so it takes a lot less capital to make explosive moves.
The 13th is represented by the biggest green candle. I was trading it short from an average of $0.69ish looking for a big drawdown. This crypto got beaten down before and I was looking for something similar. Bad though, that Bitcoin was still holding strong.
The blue line is almost at my average price level. I also traded it around when I was about to go to sleep. Holding overnight might be fine when trading stocks, but if you trade crypto, which obviously trades 24/7 you need to count that into your (mine) risk management.
As you can see it ripped all the way to $0.84ish during my night time. I did not put in a stop loss, which ultimately should have been somewhere around $0.75ish or even better, I should have closed the position as I was already down.
These dump trading decisions, as I know I was doing a mistake, led to the following trading statement, in which I got liquidated.
I know this is bad and I should have known better, but with writing this I want to make it public so it feels bad to me. Writing this is definitely not easy, but I made a mistake and I am the only one responsible for it. So I take that L.
Thanks for reading and have a good start or end to your day!
Niklas
This is not financial advice, it is for educational purposes only!
