The following is a timeline of actions on a trade I took and how I minimized loss upon finding bad news. The days of this event happened July 27th to July 28th 2017.
This isn’t advice on how to trade nor am I a certified trading professional. Please understand the risks associated when trading cryptocurrency.
10:14 PM: Alert triggered QRL coin has dropped more than 10%
Crypto Market Scanner shows sharp drop of 10% for QRL coin. Analyzing chart shows coin has hovered around 17500 to 19000 for the day. The drop was very sharp, so you have to act fast to get in around this range since this is a low volume coin. A buy order at 14100 was placed.
10:38 PM: Buy order fulfilled at 14100
Intending to sell between 16500 to 17500 for around 20% profit.
11:10 PM: QRL kept dropping past 10000, bounced up, and I bought more at 12000
The second drop was fast for a low volume coin and because the price drop was fast no buy orders of 10s and 11s were placed. However, a bounce happened back to 13, so at this point there was time to research any bad news on QRL coin, but I didn’t find anything in major news articles that threw any red flags. I proceeded to place a buy order around 12000 which order fulfilled shortly.
11:30: Price dropped below 7000 which is now more than a 60% drop within 1 hour. Reddit post explains drop
At this point, there is something wrong when price has dropped more than 60% in one hour. I decided not to buy anymore and figure out what’s going on before my next action. After researching a little deeper through social media platforms, I found a reddit post (shown below) was responsible for driving the price down.
The same message can be found in twitter and bitcoin forums, but this information wasn't in any major news article.
Midnight 07/28: Decision time
After finding out about this bad news, I made the decision to get out of this trade FAST, but I wanted to minimize loss instead of making a fast sell. Back when I worked in the telecom field as an engineer, during unexpected circumstances such as server issues or major overloads we had to work throughout the night sometimes as much as 24 hours. As a professional, this would be very similar to the situation where you have to work overtime to put out a fire. I could have placed some sell orders and went straight to bed, but it was best to work through these trades at level 2 trading in order to minimize the loss. So I felt it was prudent to try to get these sells out on every bounce which needed to be monitored in real time to get out at the right time.
Midnight to 12 PM: Sell order completed, 100% out of the position, Minimized loss to 3.2%
All orders completed on each bounce. I couldn’t get a full order out on one bounce so I had to settle for partials throughout the night. I was hoping to sell at around 14000 to possibly break even, but reviewing the orders on Bittrex it seemed really ambitious to reach that high. My main priority was to SELL ON EVERY BOUNCE. After the final sell, I took a total loss of 3.2%. If instead I sold all my position at 11000 where most of the trading activity happened, I would have taken a big 15% loss.
Also, I did get sleep between 4 AM and 10 AM 😊
I would like to give a special thanks to Luc for teaching crypto trading. He explains how to minimize losses in his blogs and videos at https://steemit.com/@quickfingersluc.
Scanner tool is provided by nervisrek. He can be followed at https://steemit.com/@nervisrek. Thank you for such a valuable tool.
Let me know what you think and if there was anything I could do better, or maybe I acted to hastily saying this is a bad trade. All feedback is welcome as I’m still learning lots trading in cryptoland!
Thanks for visiting my blog and HAPPY TRADING.
Rob
Hi,
Its funny, we lived almost the same night !
After discovering about the reason of the crack, I also tried to get out of there ASAP.
I am lucky, I did 1,64 % out of it in the end.
Byt the way, I like your blog, I will follow you from now on :)
Appreciate the follow. Yea, I still remember that night.....when you are in 3 buys like you, gotta figure out how to get the hell out without taking a huge loss. you did well
Also looks like QRL made it back to base after 3 weeks despite the controversial news.
Appreciate the blog. I have been working at this for 2 months now and up around 50% which isn't too bad but not nearly where I want my skills to be. I consider myself reasonably intelligent but for whatever reason I simply CANNOT understand how to read volume and am still confused about what level 2 is. I am in the slack and was told to stare at it for 30 minutes then walk away and come back and stare at it again. I want to ask for a video but feel like everyone gets it but me. Can you explain it? maybe in another post?
Honestly it comes with experience. Believe it or not, my trading strategy keeps evolving and has changed quite a bit since I wrote this article. Here is my most recent post about selling by evaluating some level 2 data
https://steemit.com/trading/@oneluckyflip/oneluckyflip-s-crypto-trading-tips-and-tricks-placing-sell-order-on-a-low-volume-coin
Just keep trading and your success and mistakes will form you.
Also, 50% is GOOD so you are doing something right.
Damnnnnn.....reading this kinda gave me the chills lol....a 60% drop is nothing to scoff at. Now, the channel that price was making between 17500 and 19500 looked really good! I would've definitely taken this trade as well. I have to say that your exit strategy was challenging (I probably would've chosen sleep over mitigating my loss potential lol), but awesome. Inspecting trades on Level 2 really has it's benefits...I'll keep this in mind for the future. Thanks for sharing Rob!
Sleep is nice and probably wasn't worth the late night.....I just hate losing.
Wow, yeah that was dangerous. Luc probably would have hilariously posted it up showing how he made money on the trade.
I guess you had a pullback after your first buy that you probably should've sold on.
Also another thing Luc does is double down on his investment the lower it goes... which suggests that his first investment is never very big.
It seems like we're both in the same boat, experience wise. Hopefully we'll get some awesome trades in!
I'm loving your articles! I found you in the comments on luc's steemit. Glad you got out of this one basically unscathed. I'm in a similar (yet not so severe) situation with ETC and NBT, I'd love to get your opinion on these trades if you have the time :). ETC has fallen much further than I expected, and Iit's now obvious I jumped the gun and bought too early. NBT I've come to discover is unpredictable because it is frequently manipulated by whales.
On both occasions I should have sold earlier for smaller returns as opposed to hoping for 25%+. I'm sure they'll eventually be in profit again though.
Thanks again for your content, happy trading!
Forgive the structure as I'm answering from the phone as I've been out of town,
A. I would have not took that buy.
B. The clear base is 56, 10-15% lower than this would be a good start to buy
2 For nbt, this is a little harder and one I still struggle with
You could put a base at 41 but the safer base is 38 obv. Again 10-15% below the base is a good start, but try to go a little further back in chart history to see how some of previous drops happened.
Now if bounces not working in your favor, you could hold on and wait but understand you're risking further drops. I prefer to not hold on and sell some on every bounce after 3 days not getting the results I desire even if it's for a loss. In the future, I'll blog about some losing trades I had with mistakes I made
For future trades, try to sell on every bounce instead of waiting for the one big return...you don't have to sell all, you could always hold on to some pieces in case those big gains happen. Like in etc, you could have sold some at 64-65s. Better to complete a lot of quick 10-15% trades then hoping and waiting for the occasional 25-30%. Also Psychologically, this will work in your favor to feed the reward of completing lots of good trade. This will come with experience.
Hope this helps, and good luck.
I'll be back with more trades of the day once It return home next week.
Thank you for the in depth reply. I really appreciate it. I've recently re-watched all of Luc's videos and done some reflection and I came to similar conclusions, namely: I haven't been drawing my bases correctly.
I like your method of selling on the bounce, I will definitely be implementing this.
I'm very much looking forward to more content from you, and will upvote as much as possible :)