I've tried keeping a short position for months before, which could've made me some cash in the past, but I always seem to close it after making a little profit.
There was this coin, Rave, that shot up from $0.02 to $28 not too long ago, but now it's crashed down to $0.6 in just two days. I went long on it at $25, it hit $28, but I didn’t sell. Then it started dropping yesterday, and I ended up selling at $19. I thought about holding it longer, but I messed up because I had already made a little profit.
I know the coin's gonna tank, but I still couldn't manage to make the most of it.
Is anyone else experiencing this?
The trading position type is Short, so it means the position should be kept in very short time. With Long position, you can let your trading position opens a longer time.
With Short position, available time for letting it opens safely is very short, and if any leverage trader lets their Short Trading Position opens a long time, liquidation will come and they will lose most of collateral for that Short Position.
When I heard of rave hype I know for a fact that it will go down anytime soon as the rest of major holding like 90% are concentrated with only few users and probably group. They are totally manipulating it without a doubt. Now when Zachxbt posted a bounty and call of binance thats when everything fall off drastically.
I never held a short position for so long maybe the longest was a week when I am using a noncustodial dex but I only did that for major coins like btc eth and sol.
Future position was never meant to be held for a long time, if you held $rave short position from the peak you would be getting massive funding rate that you need to pay and it was about -2% funding rate per hour x your leverage of your margin you need to pay to maintain your position.
Although to be fair the profit may outweigh the funding rate. $rave is a trap created by cabal to liquidate people who opened future position. It's good that you are still making money but I would never open a short position for a long time, especially months.
The only thing that gave me anxiety holding short position for a long time is always funding rate. If this thing didn't exist I would've shorted every altcoin with low margin enough to maintain thousand percent negative gain until tide changed.
Yes, that's called greed
That has happened to me many times before and it has happened in the last few days. I open long position for BNB and in a day, I see my profit but I still let the position open.
But suddenly, I have an urgent situation where I need to go out of my home and focus on it and I forget about my position and when I came home and checked my position, it was gone with my balance.
Lucky me, I don't use too much money to open long position.
I used to be like that, but now I never do it unless it meets my entry criteria; otherwise, I completely avoid that trade.
It only happens to those who don't follow any strict rules and conditions, or maybe you don't have these two. Based on your statement above, you are guessing when you say you know it will crash, but on what basis?
I have changed a lot, which is why I have strict rules; if it meets my conditions, I will open a trade without hesitation.
The problem sometimes is a lack of encouragement and fear of losing, so we end up missing those trades.
Your psychology is not yet strong enough to hold trades for a very long time to get all profit, hence the reason I think you are quick to take profit.
I think it is a good thing that you can spot short positions on the charts, especially the ones with huge profit potentials; you just need to work on your psychology.
I might have a different opinion here. Future positions can be opened for longer duration if proper strategies are in place. You would need a strong background research and ability to understand the markets before you can open a futures position. A small portion of your capital can be invested in futures where you can use minimum leverage to open long-term positions.
Even 5x leverage here is a lot and can give good returns for mid to long term if proper direction position is opened. I have tried this in the past and have had profits multiple times. Averaging the entry as well gets much easier in long term futures positions.
Funding rate can never be ignored but it's not always we have to worry about the funding rate. Sometimes, profits are pretty massive if compared to the funding rates, so this does not really harm your long-term holdings.
This has happened to me, quite a familiar experience when it comes to trading in hype coins, the fluctuations are quite high and yes that is the impact of trading in coins that have a very hot market, sometimes we always expect more so we forget about the opposite potential and even when our minds remind us of it we ignore it.
It's quite crazy for the ups and downs, I only buy spots at $12 to $18 after that I'm done, that too with small money because in this bearish market with uncertain situations I don't dare to start with big money and with excessive confidence in a coin.
I even put a Short position at $35 but the price didn't touch that and yes I thought maybe it's not my fortune right now, but just imagine if my position was taken at $35 and now $0.6 with a margin of $100 and leverage of 20x the profit is enough to eat one month.
This will happen to just anybody trading any type of coin in any type of market. It could be a long trade, it could be short trade. Both of this trade doesnt actually matter, what is important in this type of cases is the traders psychology. Psychology or emotions are one thing that is very hard to curtail, even for an experienced trader like you it kicks in most especially if what are trading is actually not your regular pair, you will be in panic all through the trade.
The short position is just like the long position in trades and its not that exceptional just that I personally think that there are more short positions available in the market due to most Altcoins that are usually heading down. I think most people actually do know that a certain pair will dump and this indicates shorting of the market but the traders most are skeptical about where to set their limit and avoid been taken out before the dump and this is where the emotions kick in
This is emotion playing out, and you need to fight it ASAP.
Yes, it happens to me but I've improved significantly in fighting it. This is our human nature playing out against us, and the faster we realize it, the better. Otherwise, we will be missing good opportunities.
Position trading often called short position for several months requires a different approach than day trading because of the high stakes involved and it could be profitable in the bearish market but as said already, the psychology of this strategy has got to be developed so as not to be a constant victim of loss.
It's good to have such an experience and seek out better trading strategies mostly as it concerns altcoins that can dump at any time.
I don't know how trailing stop loss can help, but it can save you some stress and help lock in profit as price drops, but it's good to be focused in the long run to understand better how the market moves.
Did you use the perpetual or the future derivative? Is it bitcoin or what altcoins? Or trading in the spot market? I guess it is the spot market because of the averaging that use used but that is also possible on derivative markets.
Most people will prefer the spot market for this.
All I know is that if it is altcoins, traders should be very careful but long term profit is guaranteed if good coins are selected after s very long bear market.
Holding short positions for long time can be really risky as you never know when the bulls will get stronger and turn the market direction. If you have short position open for more than a month, you will need to spend a good amount of time in watching the markets everyday just to make sure you are still able to make profits or cut short losses. I have had a short position open for almost a month, and I was able to close it in profit, but I was always anxious until I finally closed the position. I remember, it was difficult for me to sleep at nights without thinking about the position.
Similar situation has happened with me, and I am sure a lot of other traders might too have faced this kind of situation. I guess somewhere, greed came in between where you wanted to make more profits by holding the position but you didn't think about the downfall. These kinds of things do happen and will only make you stronger so there's nothing to worry about unless until you have learned something.
I guess your leverage would be too low, so that's how you made a small profit, because if you shorted at $25 and it went to $19, that's a good profit you should have made but there is one more thing, maybe you are being greedy? Can you mention how much you made, if that's not a personal question? Because I think we traders are always greedy and it is never enough profit for us, as we will always wish to make more. Actually, there is a big reason for that as well.
The market is very uncertain and making a profit consistently is not possible for anyone so whenever we gets an opportunity like this we try to use it to the whole and when we don't get enough profit we say something like what you said. But there is nothing wrong in that.
It has happened to me several times but I have tried to book the profit as soon as possible. The rave token pumped very high in a week I guess, and it should have made a lot of profit but I heard investors lost the opportunity
I can honestly relate to this. The only time I tried holding a short position was on GRASS around $2.4. If I had just stayed patient, I could have made some really good money. But my mind was not strong enough, especially since it was during a bull run, so I closed too early. The annoying part is that the very next week, the coin started dropping hard, and till today it kept falling all the way down to around $0.2. That whole thing just showed me that sometimes it is not about knowing the direction, but having the patience and discipline to hold your position.
I did it with Luna perpetual swaps. I open a position on Bybit back then which I even forgot about and during what I believe was the Luna crash, the position made some sweet profits and I even got my position closed by the Auto Deleverage Liquidation mechanism because I was one of the "most profitable trader" vs a huge number of positions that ran bankrupt due to the dump.
I got a notification through my email and that's when it hit me that there was a position I hadn't closed for months
I have this feeling of "Do I need to long this coin?". "What if it goes down in an instant?" I have this questions in my mind so the ending is that, I didn't touch the coin when it went up to 12$ to 18$ to around 28$ before it dropped to below a dollar in just a few hours.
TBH, the fact that I didn't touch the token alone is a big win for me already because if as it goes up, I'm already thinking of shorting it at 12$ because anytime it can go down, and luckily I didn't because I could've lost my money on the process. When it plummeted to the ground, I'm sleeping during that time, but looking at the chart, it showed a double-bottom structure on the 1H chart which shows that the buyers are losing momentum already, and it turns out that it's true.
You failed because you entered at the wrong time, and if you will ask me, it's fine. RAVE during that time is heavily manipulated so you don't know when it will go down or will it go up even more. I don't know if this kind of thing happened to me in the past year or so because when I see a token that's considered "manipulated" I immediately stay away from it.
I have experienced this before and maintaining a short position for months while holding a loss, when we get a small profit, we decide to exit the trade relatively quickly. This shows a different level because we are ready to withstand losses but can't wait for profits and that's something that is quite difficult for us to avoid even though I myself am confused by the method we often practice. This also happens in daily trading because people are able to withstand losses, but when we get a small profit, we actually close the trade influenced by emotions.
If asked what will happen next then I personally say it will be difficult for us to be disciplined and it will be difficult for us to stick with the trading strategy we are following so that in the end we will change the strategy for certain reasons. This is what I experienced because psychologically we are actually able to survive in the midst of losses but are too quick to exit the trade when we get a small profit.
The moment you realize that coin has increased from $0.20 to $28, you should stop being greedy and take whatever profit you got. We all know that altcoins are very vulnerable to pump and dump movements in a short time. Personally, since that october last year Im still avoiding leverage trading in this bear market, at least until October because both long and short positions have been getting me rekt due to unpredictable price movements.
Ive experienced something similar with another coin and now I avoid chasing coins that have already pumped. Its better to use TA and position ourselves before the pump happen.