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The Cryptocurrency Trading Bible Two: The Seven Deadly Sins of Technical Analysis
Traders Magazine Online News, October 25, 2017
So you read the original Cryptocurrency Trading Bible and you jumped head first into the great game?
How are you doing?
Be honest.
Are you making money or losing it?
There’s only one metric in trading. You either win or lose. It’s simple. There is right and wrong and it’s not hazy like real life.
Right is making money. Wrong is losing money.
If you’re losing money and you’re still telling yourself you’re good at trading you’re straight up lying to yourself.
You were up 100% but gave it all back four weeks later? Then you failed. Simple as that.
But don’t worry. I’ve been there. Everyone has. Nobody is immune.
These are hard lessons but there is only one way to learn them:
By making the mistakes yourself.
Nobody gets to skip steps. Mistakes are part of learning. You can read every trading book, meticulously paper trade in an Excel spreadsheet for a year and you’ll still jack it up with real money when your ass is on the line. Nothing matters until you put skin in the game and risk your own cash. Not until your blood is pulsing and your heart thundering and waves of fear sweep through you as you watch money vaporize on a horrible trade will you learn a damn thing.
It’s only by doing that we learn anything in life.
Reading books about trading, going to seminars, talking to friends, thinking about trading is not trading. Trading is trading. You have to risk your own hard won money to understand.
That’s because trading and life are a journey of self discovery.
It requires pealing away all that is false and fake. When you lose money it requires painful self analysis to figure out where you went wrong.
Did you get swept up in FOMO?
Did you HODL for too long?
Did you try to catch falling knives?
Did you buy the tip instead of the dip?
Was your stop loss too tight?
Lying to yourself is the first enemy of traders. Society rewards people for deluding themselves. It rewards them with community, a job, friendship and a card at Christmas from someone they don’t really know. But trading punishes deluded people by taking their money from them as fast as possible.
Each person sucks at something different. You’ll have to figure out where you suck on your own. Nobody can do it for you.
One of the lessons I had to learn was that I just wasn’t very good at technical analysis until recently.
Oh people thought I was pretty good. I could put together a pretty chart with the best of them and draw some fine looking lines on it. But in my heart of hearts I knew I wasn’t that good. Even worse, some of the traders I talk to thought I was pretty damn awesome at it and that compounded the lie I told myself. It made it much harder to spot. The dopamine hit of people liking you can distort your thinking in all kinds of terrible ways.
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