If May was bad for crypto markets, then June was completely horrible. We’ve seen USD drawdowns of around 35% in both our long term holdings and mining accounts, but have managed to hold some water, in BTC terms, with our active trading account. The real silver lining has been that we’ve been able to focus more on tech, continuing progress on our trade planning and management package, as well as starting a new project that involves our own ERC20 and 721 tokens. While the past few months have been painful, we’ve been working hard and aren’t rekt yet!
As a reminder, our operational goal is to accumulate more BTC, so our primary concern is not with USD price of our assets. We still track these numbers, and it is emotionally painful to watch this continued bear market drive assets into the dirt.
Our original plan, when we purchased our mining rig back in January, was that we would have reached return on investment by July, but that possibility is completely out the window at this point. We’ve continued to mine Haven Protocol (XHV) and Raven (RVN) almost exclusively the past two months, and both of these have taken hard hits. Since these two tokens make up a combined 80% of our holdings, our goal right now is to find another project to accumulate in order to diversify. We haven’t seen an other promising projects lately, but will continue to do our research. In the meantime, we use a profit-switching pool and cash out into privacy coins or Ethereum.
Last month was a bit mixed. We continue to refine our trade tracking and risk management tools, but our execution has been a bit wanting. Creating a trade plan is simple enough, but putting systems in place to track these trades and take the emotion out is proving more difficult. We’ll talk a bit more about later when we get to projects, but our main takeaways from this month is that we need some adjustments.
AuroraDAO (AURA) [Opened]
Exchange tokens have been one of the only winners in this bear market (see Binance coin!), so when we found out about IDEX’s staking token we had to get some IDEX is the most popular decentralized exchange (DEX) according to DappRadar, and this seemed like a good trade. Unfortunately, DEXs lack many of the features that centralized exchanges do, including conditional orders, and this has caused us to hold AURA past our stop loss price. To clarify, normally when we open a position on an exchange like Bittrex, we immediately place a conditional sell order at our stop price. This way we can walk away from the screen and have high confidence that our downside risk will be limited. On IDEX, however, the only order types available are limit and market orders, so maintaining a stop is a matter of checking the price or setting an alert and manually selling once the stop is breached. In practice, though, this remains very difficult. All kinds of emotional factors come into play, and I must admit that once our stop price was breached, not only did I not exit my position, I DOUBLED DOWN. This is horrible on many levels. Not only have I allowed myself to break my cardinal rule — to limit losses on any single trade to 2% of my trading capital — I now have a second position in the same token and have ruined all the hard work I’ve done over the past few months.
I now have a few options: close both positions and cut my losses; close the first position and hope that the second doesn’t stop out as well; or hodl, and move this bag from my trading portfolio to my long-term wallet and hope that my hypothesis on exchange tokens plays out over the next few months.
Cardano (ADA) [Closed]
Our entry here was perfect, we raised our stop to protect our capital, but watched a potential 10% gain fall for a measly 3% return. Once our trade management bot is operational we will implement an automated trailing stop system to prevent this kind happening.
Consensus Token (SEN) [Opened]
I’ve become very interested in AI and machine learning lately, and so we decided to take a stab at Consensus. This is another IDEX token, but so far it hasn’t breached the stop price. This is one token that probably deserves a longer time horizon than a swing trade, but for now we’ll watch and see.
Ethereum (ETH) [Closed]
We were waiting several weeks for ETH to pick up our limit buy, and it barely picked it up. We were able to keep a close eye on this one and raised our stop several times over the following two weeks before getting washed out for a small 5% pickup shortly after our trading month ended.
0x (ZRX) [Closed]
I’m not even posting a chart of this one, which took about 3 days to hit its stop and close out, erasing most of the gains from the ADA trade.
Bitcoin bear markets seem to be a good time to forget the hype and focus on the tech. We’ve got two major projects that we are working on .
The first is a trade manager application written in Python. We’ve been spending a lot of time working on the design and implementation. While we’re not ready to debut it yet, we can say that it is able to duplicate most of the functionality of the Google sheets that we’ve been using for our trade diary. Right now the app can calculate stop losses based of off the entry price and total capital to be deployed in a trade. Price data is being pulled from CoinMarketCap, but it is our intention to have it manage trades directly on Bittrex, Binance, IDEX, and other popular exchanges. We’ve completed the trade plan class and are working on the behavior and calculations for open and closed trades, and then need to wrap all that functionality in the actual trade agent portion. Functionality is being limited to a command line program for the time being and will eventually be ported to a web front end.
The second project is a new token project that we will use to fund non-profit projects using a decentralized autonomous organization (DAO.) The token sale will fund the developer and general fund, and token holders will be able to propose and vote on projects to fund. We’re also planning a Crypto All-Stars DAPP clone to raise money for the fund as well. We are currently in the process of writing a whitepaper and recruiting team members.
If you are interested in finding out more about either of these projects, please reach out to us on Twitter @SEVAITS_Crypto, or at mbwade at SEVAITS dot com.