I have been trading DOMO for a month now. I started last 18 September. My initial trade was disaster. Not so big, just a $12 loss overnight.
In my article Rediscovering My Trading Instinct, I did not share the reason for the awakening of my trading instinct. It was actually my experience with DOMO that triggered that buried character in me.
For more than three years, I stopped stock trading and just focused on growing my HP here on Hive. However, the DOMO experience challenged me to maximize the "emotional trauma" I had when I first entered the stock market.
This time, I will be more conservative, something I learned here on Hive, is the idea of micro strategy.
So far, this strategy works for me in trading cryptocurrency. I have several on my watch list and most of them are Ton tokens as a result of following the airdrop mania.
I am sticking between 5 to 10 USDT per trade. A $0.50 to $1.00 profit is enough a reward for me. There are nights that four of my "sell orders" were hit in the morning. I usually buy at night and once executed, I immediately post a sell order. A $2 gain is good. I do not spend much time in trading.
Three Trading Mistakes
Such a profitable trade happened during the low days of DOMO, ranging between $0.00005 to $0.00011. However, something changed in the price direction of the token last 11 October. It appears that the "pump and dump" scheme of the big players stopped and the token started to soar. I made my first mistake. I sold too early.
In contrast to its prior price movement, DOMO now seems to have entered a healthy price formation. However, I was suspicious that it could be a trap, and so I watched the price soar from 0.000011 to 0.00058. If my calculation is accurate, that's a 5,172.73% increase in just two days. In dollar terms, it would mean that a $5 trade would be worth $263.64 in two days. That's big!
For me, it's easier to profit during DOMO's low days than when it had a short bull run. The price was so volatile. I don't think I can ride such a wild horse at that time so I refrain from buying.
Before entering the trade, I need to understand the new price direction of the token. So, I made a parallel channel connecting two higher lows and one high that includes most of the prices. I used this channel as my trading guide. If the price hits near the floor, I enter and when the price bounces 10%, I exit. So far, so good. That's what I thought.
On October 16, using Fibonacci retracement, I thought the correction was done. I used 61.8% Fibo in entering. When it failed, I changed to 78.6%. But even this was not respected. DOMO broke the up trendline on the same day when it broke down the support. Usually, when that happens traders cut loss. However, my belief was strong that the pullback was temporary and that the price would bounce back to the channel. It never happened. I committed two more mistakes: I entered too early and I failed to cut my losses.
Nevertheless, the loss was not that big. Since it was just a micro-trade, I only lost $8 and it was just a paper loss. I still have three sell orders at 0.00027, 0.00029, and 0.00033. My net is still positive for I gained $25 since I started trading and I already used $10 in purchasing $HIVE.
The chart above is not the standard technical analysis. It is just my way of playing with my analysis. You can see there are at least four indicators: the trading channel, the two wrong entries, the two big circles indicating reward and risk, and the curve pointing to the accumulation stage, which could potentially give a trader a huge reward.
In identifying the prices included in the reward and risk circles, I used the Elliott Wave tool. If you count the number of waves included in the reward circle, you can see five of them. On the other hand, the correction wave is longer but still passed the A-B-C- count, and sellers seem to find the floor at 0.00006064.
With the above tools in mind, I will now change my strategy in trading this political meme token. If ever the buyers and sellers repeat the same pattern from 11 to 13 October, I think I will be ready this time and will not sell my holdings too early.
Posted Using InLeo Alpha
