My bitcoin trade is not going according to plan. As we head into the weekend, BTCC opened within a hair of my stop loss trigger. You can find my original trade post here.
The chart below illustrates how razor close I am to bailing out of this trade. To be sure, I am tempted to move the stop level lower. However, my experience taught me to avoid this temptation. Confirmation bias, or the need to find some reason to avoid realizing I’m wrong is a true risk of ruin. Avoid at all costs.
Indeed, psychological biases are the leading cause of why most traders go broke. I do not plan on going broke, nor should you.
Conclusion
In the end, remember that Bitcoin is a risky asset and not a safe haven. At the moment, there is a ton of bullish hype around Bitcoin given the crisis in Ukraine. Ironically, both sides are using crypto for two different reasons: 1) a feasible way for Russian to skirt sanctions and 2) a frictionless way for Ukraine to finance their resistance. So far, over $50 billion USD worth of crypto has been donated to Ukraine.
In the long run, alternative payment systems like crypto will run parallel to the traditional banking system. This is why I remain bullish crypto long-term. But, I realize that sound risk management comes before profits.
I’m sticking with my BTCC risk paramaters:
- Entry price – $8.90
- Stop loss – $8.20
- Take profit – $10.00
Trade your own view and mind your risk.
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