Week 31, Trade 31 : LONG $ETH & LIMIT EXITS
📈 Week 31, Lesson 31
"The most important rule of trading is to play great defense, not great offense." – Paul Tudor Jones
We are into Week 31 of the Fifty Two Trades in Fifty Two Weeks. Thank you for reading.
“The 52” deep dives into one trade every week, targeting traders with zero or little trading experience. But I hope that my pro trader friends find this as useful. For details on why I am doing this and who is this for, please read the About section on top, which I will update from time to time.
Most trades that we take will be medium (3-4 weeks) to long term in nature. We might do some swing trading here and there if opportunity presents, but always with proper risk management. After all, our purpose is to make money, not lose sleep over it.
You can track our trades and progress live here at this Link
Over 10 years in banking and now 12+ years dealing with nuances of crypto, I have learned some very hard lessons. I intend to share them transparently as we go. More importantly, please keep the comments and feedback coming, so I know we are on the right track together.
📊 Portfolio Update - Open Trades
We continue to navigate the market cautiously, balancing between risk and reward. Stay tuned for more updates as we adjust our positions based on market conditions.We’ll continue to monitor the open positions closely and adjust as needed to navigate the range-bound market effectively. Stay connected on Telegram for real-time updates and insights.
If you have any questions, ideas, or feedback, please feel free to DM me on Substack or Twitter, Let's continue to navigate the market together!
POWER OF RISK MANAGEMENT THROUGH POSITION SIZING
Even the best trading strategy can fail without proper position sizing. Knowing how much capital to allocate to each trade is crucial for managing risk and protecting your account from catastrophic losses. Many traders blow up their accounts not because they had a bad strategy but because they risked too much on a single trade.
A common rule is the 1-2% rule - never risk more than 1-2% of your trading account on a single trade. For example, if you have a $10,000 account, risking 1% means your potential loss is capped at $100. This way, even a string of losing trades won’t wipe you out, giving you time to recover when your edge plays out over the long run.
How to Calculate Position Size:
Determine Risk Per Trade: Decide how much of your capital you’re willing to lose (e.g., 1%).
Set a Stop-Loss: Identify a logical price level where your trade is invalidated (based on support, resistance, or volatility).
For example, if you risk $100 and your stop-loss is $2, your position size would be 50 shares.
Why Position Sizing is Essential:
Prevents Large Drawdowns: Even with multiple losing trades, your account stays intact.
Reduces Emotional Trading: Knowing your risk is controlled helps you stay calm and stick to your strategy.
Promotes Long-Term Survival: Trading is a probabilities game - position sizing keeps you in the game long enough for your edge to work.
Position sizing isn’t about avoiding losses: It’s about controlling losses so your winners can outpace them. Protect your capital first - profits come later.
🌎 Quick Macro & Crypto TL;DR
THE GOOD:
Macro Tailwinds: Global liquidity is expanding and yields are reversing, paving the way for eventual Fed rate cuts and long-term gains.
THE BAD:
Market Pressure: U.S. stocks are suffering amid persistent tariff uncertainty and weak economic data, undermining investor confidence.
Fiscal Tightening Pain: Aggressive spending cuts (DOGE’s budget slashes) and potential job losses are likely to dampen consumer spending and earnings.
THE WORSE:
Trade Tensions Escalate: Imminent tariffs on Canada, Mexico, and China risk deep supply chain disruptions and higher costs, worsening economic headwinds.
For more regular insights into macro and crypto trends, subscribe to our weekly newsletter: 5-Minute Macro and Crypto Weekly.
📈 Week 31, Trade 31 : LONG $ETH & LIMIT EXITS
In line with our strategic framework outlined in last week’s newsletter, we have successfully executed our Ethereum limit order as part of our targeted market positioning. The recent release of the CPI data has infused the market with a glimmer of bullish sentiment, reinforcing our view of an upward trend that is likely to persist until the upcoming FOMC meeting later this month.
Strategic Execution and Market Outlook
Our disciplined approach allowed us to secure favorable entry points with the Ethereum limit order, aligning our trade decisions with both short-term market dynamics and our long-term strategic vision. While the current momentum is encouraging, we anticipate that after this upward movement, the market might experience a short-term pullback. This potential dip will create an ideal opportunity to reaccumulate positions, allowing us to capture gains made at higher prices and reposition for further upside.
Key Considerations and Future Strategy
Bullish Market Sentiment: The latest CPI figures have bolstered confidence among investors, indicating sustained growth potential until the FOMC meeting.
Reaccumulation Strategy: In anticipation of a market correction following the rally, our plan is to strategically re-enter positions at lower price points, optimizing our portfolio for future gains.
For those interested in a deeper dive into our analysis and strategic positioning, please refer to our detailed update in last week’s newsletter:
We continue to monitor economic indicators and policy developments to ensure that our strategy remains agile and responsive to market shifts. Below is a comprehensive breakdown of the executed trade:
1. Long $ETH:
Executed Entries:
Limit Order 1: Purchased at $1,903
Limit Order 2: Purchased at $1,802
Rationale: The anticipated pullback in $ETH occurred, triggering our limit orders and allowing us to establish a position at a favorable average entry point.
2. SELL & RE-ACCUMULATE $SOL, $BTC, $HYPE:
This was mentioned in last week’s newsletter, just refreshing everyone’s memory here:
💡 CONCLUSION
Our market strategy continues to unfold as planned, with our Ethereum entries successfully executed at $1,903 and $1,802, capitalizing on the recent pullback. The release of the CPI data has reinforced bullish sentiment, setting the stage for further gains leading up to the FOMC meeting. However, we remain cautious of a potential market correction post-rally, which will provide us with another opportunity to reaccumulate key assets like SOL, BTC, and HYPE at lower price points.
By taking profits at strategic resistance levels and re-entering on dips, we optimize our exposure while maintaining a disciplined risk-reward approach. As always, we will continue to assess macroeconomic trends and market conditions to adjust our strategy accordingly.
Stay tuned for further updates, and remember—NFA (Not Financial Advice), always DYOR (Do Your Own Research) before making investment decisions! You can track all our trades here.
Now go grab a coffee and please DM for any questions. Keep in mind, this is NFA and DYOR.
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