SCALING IN. . . .

Just this shorty to outline scaling in technique.

When markets go into a liquidation, they tend to go much farther than anticipated.

Further, liquidation is very difficult to judge.

My personal tendency is to purchase too early and sell too late. The former is not nearly so bad as the latter. In fact, on the long side I find it is better to have adversity so long as you are confident of the fundamental and technical picture. More often than not a long trade that is immediately successful crumbles into dust. So when it happens, I usually trim half cause it probably won’t work out.

This is not so with a short trade. A bear market tends to drop quickly with little or no recovery, while a bull market tends to rise, back fill, and then rise again. . . . until the bear kicks in. . . drops and then just keeps on dropping.

It is important to be much more demanding going short than going long.

Well, I identified a decent buying opportunity, but the market was in obvious liquidation. Now we already had two other liquidation phases and the TD timing indicator said it was time to buy. But one of the big problems with the TD is that trading on a 12 hour or 1 day can mean a 500 to 1,000 point difference from the beginning of a candle to the end of a candle. Plus, the TD is dynamic, not static so it can give you false signals within the candle. Therefore, I do not trade the TD indicator all by itself. It is simply a use useful tool once everything else lines up.

Anyway, when I saw what was happening I sent 5 BTC to Bitmex, because I planned to scale in all the way down to 2,800. It turned out I didn’t need it (and I already sent it back) because the market turned well before my equity approached 2 BTC, but I scaled in ready to scale in more all the way down with plenty of ammunition.

This is what I mean when I say keep your powder dry!

Incidentally, 85% of the time I am a market maker. However, there are exceptions. Especially during liquidation rkts.

When I say fire only when you see the white of their eyes!. . . this means look for large rkts. . . I mean rkts in the million plus category. . . this is a good time to use a market order . . . or better a limit order above the market (this like a market order but you avoid getting a bad fill on a volatile spike). . . but also keep in mind the market is often congested and impossible or at least very difficult to place new orders. . . and another thing. . . when you buy these rkts you get paid as a market maker . . . not a market taker.

GOATS EAT RKTS! Thank you for your support!

Anyway, the market is lower, my equity measured in BTC increased . . . and I remain a happy camper. . . treading water . . . hoping to catch the next big wave.

As far as short ETH long BTC I covered way too early all the way down under .026 to .02517 only to watch it crash to .02401. But it is always wise to leave something on the table for the next guy. I re-entered 200 shorts at an average of .02735 on the way up (which is only half of what I had on originally), suffered a bit of adversity I was not concerned about and now will be a scale buyer all the way down. . . . every 10 points down beginning at .02721 . . . you can see it working here. Not looking for was much this time.

Example of Real Time Scale in Buying

Here is the notational of scale-in buying.

Example of real time notational scale in buying

Here is my current position.

Current Position

Again, I have no idea where this market is going, but I will be a selling above last week’s high (this is not a prediction). The next important day is how we close the week. Still bearish, but two week high will be moving down . . . so we can break it and confirm reversal . . . or fizzle . . . and resume the downtrend.

No one knows. . . least of all this Ugly Old Goat.

Hope this helps.

Ugly

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store