A letter from a loser

This is one of my journal entries. I wrote it to myself. But I thought it would be useful to any beginner. Sorry if there is any mistake because English is my second language.

Thank you

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The journey so far

I started trading on 19th of June 2021 by purchasing 23.14 USDT.

The first trade

I purchased SHIB on the spot market. Just after the purchase, the price started rising. Yeah it seemed profitable, then it suddenly started failing down. Finally I sold it at a lower price with a loss. This teaches me a great lesson but I didn't see it that day. Now I see it.

It is not how much you earn. It is how much you still have from it.

Margin trades

After sometime I switched to margin trade. It was a roller coaster. I had both bigger gains and bigger losses. But the losses were greater than profits. My total account was liquidated several times. This teaches me another lesson but I didn't see it. Actually, even though I knew it I kept ignoring it.

Don't put all eggs in one basket

I had to put money in again for a few times because my account balance was almost null.

Futures

This is the biggest roller coaster. The gains were so bigger than gains on margin trade and there was no difference on losses. The liquidation was normal here. I lost all my money here a few times. It took only a few minutes to liquidate my account once.

The latest one was happened yesterday, more accurately today. I entered into a long position. This trade was backed up with my emotions-hoping the price will rice continuesly. When I woke up today, the whole account was liquidated. This wasn't the first time. But yes, it should be the last time. This teaches me another good lesson.

Don't depend on emotions. The loss is painful than the happiness of profits.

After that, I converted my BNB balance worth of ~ $ 2 to USDT via x10 isolated margin. And transferred the whole balance to SOLUSDT isolated margin pair and bought Solana with x5 margin at $ 113 per unit. Now the price is $ 119 which is good.

Now, I'm here without trading, as I have no money there.

I think this is the best time to do things right. It is time to make a plan and most importantly, stick to that plan. I should develop a good trading strategy.

Let's jump in.

My plan

• Why this matters ? Because I have failed. But it is ok. Now I have learned some great lessons in the hard way.

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Rule 1 : Try to minimize the risk. Never lose than 3%.

When it comes to futures, I shouldn't let to losses exceed 3% of the margin. Therefore I should always use a stop loss.

And another thing is that never hold a loosing trade. The current loss is 5% ? Exit the current position. The current loss is 10%? You hope that it will be back on profits ? Exit the current position. The loss it 50% and you hope or/and wait for at least it will recover up to 25% loss? Exit the current position. These decisions are hard but now I know that I should do it, specially, when I am risking all my money.

Rule 2: Don't put all money in one trade.

I should keep a limit of putting money in a trade.

Personally, I adjust this rule like below for margin and future trades

If,

the balance < $25 - doesn't matter

the balance > $25 - $10

the balance > $50 - $15

the balance > $75 - $20

the balance > $100 - $25

the balance > $150 - $30

the balance > $200 - $40

the balance > $250 - $50

the balance > $300 - $60

the balance > $500 - $100

the balance > $1000 - $125

the balance > $1500 - $150

the balance > $2500 - $200

the balance > $3000 - $210

the balance > $5000 - $300

the balance > $1000 - $500

I know this is insane. But I'm a risk taker. It should be up to anyone's personal taste.

Rule 3: Don't rely on emotions

It works sometimes. But I lost all my money because of this. I have to be patient. And never trade without analyzing.

Rule 4: Learn more and use that knowledge

I am following a degree in Finance in a major university in our country. And this is my final year. I have taken a course on technical analysis. I have read a lot about crypto currencies. I have learned computer science, programming, statistics, Linux, phycology - I'm not saying that I'm pretty good at all of these areas but I have a some kind of an understanding.

But the problem is that I couldn't control my emotions. I just 'hope' the trade will be in my favor, ignoring all the analyses.

And it is better to keep up to date. I use Twitter for this purpose.

And most importantly I should keep educating myself continuesly. I am currently reading a book on technical analysis. And it helps understanding those concepts better.

Rule 5: Don't overtrade, take breaks

I day trade sometimes. After having a good profit, I continue trading, then all the bad things happen. Many times, I lose all the gains I earned.

This happens most of the time, so it is better to keep a limit of trading per day if you are day trading.

And this is the time to take a break. I am going to stay out of trading for sometime.

I will start trading keeping these rules in mind. But after taking sometime.

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Good luck everyone!