The past two months have been a mixed bag for my personal trading portfolio. In USD value, it’s portfolio is exactly where it was on May 20, despite an overall swing of over 40% from top to bottom. Measured in BTC, our bags have gained 12.5 percent over the past two months, despite making very few trades.
On April 20 we entered a new position in 0x Protocol (ZRX), a coin that we are extremely bullish on due to our core beliefs around decentralized exchanges. Our position size was calculated on our strict adherence to the Two Percent Rule, which limits our capital risk. This rule gives us an initial stop loss value and we can scale down our position size to lower our stop price, hopefully preventing us from getting washed out on small dips. We calculated our exit price simply by a 30% gain, and entered our position with 1/3 of our intended capital. We scaled in thirds over the next few days, and were able to cover our entry in an amazing 10 days. Having preserved our initial investment, the profits were sent to cold storage along with the rest of our accumulated ZRX.
Our plan was probably overly aggressive – we missed out on another 70% gain over the following week, but we took profit and have free tokens that we will let ride for long term. Plus the price has retraced back to our exit price, so we may reassess and enter another position.
The privacy coin sector is another place where we are extremely bullish, and Monero is currently king. Unfortunately, we made a number of mistakes with both our setup and execution on this trade that have put us in a bad spot. First off, we seem to have bought in near a local top. Our stop has yet to be triggered, but that’s about the only good news we’ve got on this one. Hindsight is 20/20, but it looks like we have a much better setup for our trade today then we did when we opened it in mid April. The overall price is down 20% since entry.
It gets worse though. When we originally tracked our trade plan, we used one-third of the entire capital amount that we wanted to deploy, but forgot to cut the 2% risk into thirds as well, and effectively have 6% capital at risk on one trade. We should have been stopped out at .028 BTC, but here we are at .0245. This is a big mistake and one of the main reasons that we are working on a trade plan application that will manage execution for us. More on that in a later post.
We made a small long on Siacoin (SC) on May 4 based off a pattern setup. As such, we had a very tight stop, in case of pattern failure, which was hit the following day. Only two tenths of a percentage total capital loss.
We’ve also been monitoring setups on Binance Coin (BNB), Cardano (ADA), and Ethereum (ETH), during this time period, but did not take any positions.