The Wolf Den #86 - Plan Your Losses, Trades And More
thewolfden.substack.com
This newsletter is sponsored by 2 amazing companies: VOYAGER and PHEMEX.I use Voyager for my spot trading and investing (and to compound interest) and I use Phemex for trading with leverage. Sign up to both with the links above and get some free Bitcoin. I really encourage you to check them both out - you know that I never endorse a product that I do not use!Make sure to use code SCOTT25 after you download the Voyager App to get $25 in free Bitcoin.Plan your losses.I cannot stress this point enough, and it is one that I have discussed a number of times on the newsletter and beyond.Trading is an exercise in emotional fortitude and mental strength. I have met a number of people who are incredibly talented analysts, able to identify trend reversals and big moves with a seeming sixth sense. Many of them admit that they are awful traders. Being able to identify a move and trade it properly are two very separate skills. When it comes time to trade, they become overemotional, like everyone else. They refuse to accept being wrong and move their stops, or they get greedy and refuse to take profit.The best laid plans of mice and men often go awry.Your plan is only as good as your execution. It is meaningless to have a plan if it can be thrown into the wind mid-trade.That's why we focus on the losses and not the gains. Over time, your willingness to plan for and accept losses will be the difference between being consistently profitable and busting out of the market.Have you ever bought a lottery ticket and sat around dreaming of all of the things you will do when you win? While this is a fun exercise, many investors and traders, particularly in crypto, view the market in the same manner. They buy a coin and think about the 100X that it is likely to pull. They start dreaming of quitting their job and buying a Lambo.For traders, the attitude described above is dangerous and unhealthy. I approach every single trade I make based on the assumption that I am wrong. Rather than planning for a win, I always plan for a loss. This serves me in a few ways. First, when you are planning to lose, it forces you to look for the best entry possible, one that is close to invalidation and justifies a tight stop loss. Second, when you plan to be wrong you trade defensively, looking to lose as little as possible. This helps to eliminate greed from your thinking and allows you to view the trade realistically. Remember - the first rule of trading is to protect your capital. “The best offense is a good defense.” Or better yet (from my friend Mr. Anderson)…"Defense wins Championships! Most are familiar w/ this phrase from just about every sport. However, it is also relative to Investing. We must protect our money first, ALWAYS. Amateurs think about how much $$$ they can make. Professionals think about how much $$$ they could lose."A general note - whenever I draw a line on a chart, it should be viewed as elastic and not static. It is more of a zone. So the areas around those lines are usually more accurate. Further, I try to use multiple techniques and indicators on various charts, so if you are learning TA, you should read through all of these to see how I blindly look at a chart.If you are a new member, please refer to Issue 10 (you can click on it here - https://www.getrevue.co/profile/TheWolfDen/issues/the-wolf-den-crypto-newsletter-issue-10-219754 and have it sent to you) for instructions on how to make my charts your own.IMPORTANT NOTE - I will only accept requests on Wednesdays, between 8 AM and 1 PM EST. That will make sure that they are your most pressing requests. Please mark it in your calendar and email me by responding to this email!CHARTS ARE AT THE BOTTOM OF THE NEWSLETTER!What’s In This Issue:Bollinger Bands - The BasicsInflation 101Banks Begging for More Crypto ClarityYam Yielders Beware!ETH Fees Are Sky HighGalaxy Digital Is Running Ads In NewspapersThe Wolf Of All Streets Podcast Ft. Ryan RadloffAltcoin ChartsMy Recommended Platforms And ToolsChart Requests
The Wolf Den #86 - Plan Your Losses, Trades And More
The Wolf Den #86 - Plan Your Losses, Trades…
The Wolf Den #86 - Plan Your Losses, Trades And More
This newsletter is sponsored by 2 amazing companies: VOYAGER and PHEMEX.I use Voyager for my spot trading and investing (and to compound interest) and I use Phemex for trading with leverage. Sign up to both with the links above and get some free Bitcoin. I really encourage you to check them both out - you know that I never endorse a product that I do not use!Make sure to use code SCOTT25 after you download the Voyager App to get $25 in free Bitcoin.Plan your losses.I cannot stress this point enough, and it is one that I have discussed a number of times on the newsletter and beyond.Trading is an exercise in emotional fortitude and mental strength. I have met a number of people who are incredibly talented analysts, able to identify trend reversals and big moves with a seeming sixth sense. Many of them admit that they are awful traders. Being able to identify a move and trade it properly are two very separate skills. When it comes time to trade, they become overemotional, like everyone else. They refuse to accept being wrong and move their stops, or they get greedy and refuse to take profit.The best laid plans of mice and men often go awry.Your plan is only as good as your execution. It is meaningless to have a plan if it can be thrown into the wind mid-trade.That's why we focus on the losses and not the gains. Over time, your willingness to plan for and accept losses will be the difference between being consistently profitable and busting out of the market.Have you ever bought a lottery ticket and sat around dreaming of all of the things you will do when you win? While this is a fun exercise, many investors and traders, particularly in crypto, view the market in the same manner. They buy a coin and think about the 100X that it is likely to pull. They start dreaming of quitting their job and buying a Lambo.For traders, the attitude described above is dangerous and unhealthy. I approach every single trade I make based on the assumption that I am wrong. Rather than planning for a win, I always plan for a loss. This serves me in a few ways. First, when you are planning to lose, it forces you to look for the best entry possible, one that is close to invalidation and justifies a tight stop loss. Second, when you plan to be wrong you trade defensively, looking to lose as little as possible. This helps to eliminate greed from your thinking and allows you to view the trade realistically. Remember - the first rule of trading is to protect your capital. “The best offense is a good defense.” Or better yet (from my friend Mr. Anderson)…"Defense wins Championships! Most are familiar w/ this phrase from just about every sport. However, it is also relative to Investing. We must protect our money first, ALWAYS. Amateurs think about how much $$$ they can make. Professionals think about how much $$$ they could lose."A general note - whenever I draw a line on a chart, it should be viewed as elastic and not static. It is more of a zone. So the areas around those lines are usually more accurate. Further, I try to use multiple techniques and indicators on various charts, so if you are learning TA, you should read through all of these to see how I blindly look at a chart.If you are a new member, please refer to Issue 10 (you can click on it here - https://www.getrevue.co/profile/TheWolfDen/issues/the-wolf-den-crypto-newsletter-issue-10-219754 and have it sent to you) for instructions on how to make my charts your own.IMPORTANT NOTE - I will only accept requests on Wednesdays, between 8 AM and 1 PM EST. That will make sure that they are your most pressing requests. Please mark it in your calendar and email me by responding to this email!CHARTS ARE AT THE BOTTOM OF THE NEWSLETTER!What’s In This Issue:Bollinger Bands - The BasicsInflation 101Banks Begging for More Crypto ClarityYam Yielders Beware!ETH Fees Are Sky HighGalaxy Digital Is Running Ads In NewspapersThe Wolf Of All Streets Podcast Ft. Ryan RadloffAltcoin ChartsMy Recommended Platforms And ToolsChart Requests