In recent weeks I have focused on trading around just one main position in my portfolio, Fantom. I am quite new to the world of crypto, and well, trading full stop, having had far more experience in the stock market. I was researching trading methods and decided that I liked the idea of trading around a position, all I had to do was find a coin to do it for. I settled on Fantom for two reasons: I liked the project and there was a massive amount of volume. This was about all the analysis that went into it, and my indicators have been mainly my own 'gut'. It may be an arrogant view, but compared to the stock market I believed that crypto was a world of far less rationality and far more emotion so finely tuned senses could allow you to go quite well.
I have traded Fantom countless times, and it has treated my quite well. Without it, my portfolio would definitely be in the red, but with it my gains have been far better with less volatility as I also abide by the barbell portfolio structure. To those who have followed Fantom, they would know that in the recent month there has been a massive price surge, more than tripling from its low, and this is where the tragedy begins. Before the massive runup, there was a slight rally where the price moved to $0.8 and I sold at 1 cent off the top. The price than decreased sharply and on the way down I bought on three separate occasions, placing my final 1 cent off the bottom. Unfortunately, from this bottom came the massive rally, and I sold at 80 cents thinking I was an absolute financial genius. Needless to say when I saw the price rise above $1 not long after my smug attitude was thoroughly depleted. I decided that missing one opportunity wasn't reason to not take my chances on another, so I swallowed my pride and bought at $1.1, however my poor style continued and I sold at $1.26. The price is currently around $2, arriving there less than a month from the 60 cent bottom. Needless to say, I have learnt some lessons...
Lessons
The first lesson that I am sure you all have learnt is to not sell your winners as quickly as I did. I could have gotten far better returns with less cost if I had simply held. This is something I don't even think about twice in the stock market yet in crypto trading, any profit is a good one, a fallacious mindset. There certainly is a larger courage requirement but the payoff is also there. On the other hand, getting out of losing positions quickly is something that I need to do better too. There sure is room for improvement everywhere.
My second lesson is that there is certainly fundamental reasons behind price movements, and the mob doesn't control every price movement. Fantom announced a partnership that I wasn't aware of, and this costed me dearly, as it never occurred that a fundamental change in the asset could lead to a change so rapidly. Yes, there may have been elements of FOMO in some stages of the rally, but there certainly would have been plenty of rationality. Rather ironic I must say that the one thinking there isn't rationality in the market missed out due to the rationality.
I hope that these lessons can help others, although I am sure many would have been aware of these mistakes before or even committed them personally. Let me know in the comment sections so we can console each other.
James Clarke