leverage trading method and psychology

[forestx]

OK I decided to try my hand again at leverage trading
The plan was to watch the market and when I see it making a move in one direction go in with high leverage for a small move with no stop loss
This went well 1st week and was up 30% but then went down hill fast

The issue I have is not so much bad calls but getting scared
I will go in with 10-20x leverage and see my money drop like a stone be down 20% and exit only to see it climb back up and hit the TP or climb higher
This has happened three times now.

One issue I have other than getting scared is to do with time restraints I am trying to find a trade quickly and not giving it enough time also aping in and usual sh*t
I am trying to come up with a strategy that works as close to 100% as possible and have found one on BTC/USDT with an average of 95% success rate. Other pairs are also high 80s to mid 90s
I have stopped trading for a bit and am doing more tests and paper trading

Is there a way to make this work or do others mainly trade with leverage how do you handle stop loss and take profit

[Oshosondy]

Indicators can fail, which makes it not possible. Going for 10 to 20x leverage is high. You need stop loss for it. And that should only be used for scalping.

If you do not want to use stop lose, it is still risk. Assuming you like to go on 5x leverage which would be he highest that would be good for this. You can start trading with 1x and be happy with the very little gain if it continues to work. If you are losing and the indications are indicating your direction would soon be favoured, then you can just go 2x. If it fails, then go for 5x which should be the highest leverage you should use.

As you increase the leverage, the price you opened position will draw closer to the recent price of the coin you are using to trade. And this strategy can go beyond scalping to day trading if your first analysis failed.

I have used several altcoins to trade before, altcoins can turn an expert trader to a poor trader. I will advice you to use bitcoin.

[forestx]

well the plan was to increase leverage from 10x -50x the strategy I have back tested has a 93- 96% success rate on the 1 minute chart at 50x leverage but that 4% will liquidate you
The plan was one quick scalp a day a move of 1/2% which would gain me 5-10% on my account

I think the theory is sound just need to work on the execution 

[Maus0728]

The issue I have is not so much bad calls but getting scared
I will go in with 10-20x leverage and see my money drop like a stone be down 20% and exit only to see it climb back up and hit the TP or climb higher

One issue I have other than getting scared is to do with time restraints I am trying to find a trade quickly and not giving it enough time also aping in and usual sh*t

It could mean many things. It could be a poor position sizing, or it could also mean that you are trading your PnL and not your technicals, or maybe a plain emotional hurdle called FOMO.

When I say poor position sizing, you are maybe entering a trade that's too large keeping your eyes glued on your PnL because you are just simply uncomfortable seeing your money getting rekt. Trading your PnL and not your technical on the other hand means that you exit based on the +/- percentage you see and not on your charts or the data points you have created.

Both of these issues are related to mindset or your psychological behaviour and the best solution you could come up with is experience and discipline.

[mk4]

The thing with strategies as simple as you've described is that it's highly likely that a lot of people have tried the same strategy but failed. It's simply just so easily broken due to the fact that a single decent sell order can easily liquidate you immediately.

^I wish you the best of luck though.

[whoopz]

Set your take profit and stop loss, then let the market hit your plan. This will control your emotions.

[jackg]

the strategy I have back tested has a 93- 96% success rate on the 1 minute chart at 50x leverage

How many backtested trades did you do to get to that figure?
Some things work well for a week and then just stop working.

but that 4% will liquidate you

Are you sure it's 4%? There's no extra buffer the exchange adds at that leverage (it'll be unique to each exchange afaik).

The plan was one quick scalp a day a move of 1/2% which would gain me 5-10% on my account

I think the theory is sound just need to work on the execution 

It might work if you have good execution and other things (like plans to stop for the day if nothing interesting happens).

There are ways of detecting certain moves that'll probably work in these strategies more than they won't - the issue is going to be to stop when something stops working and going back to backtesting.


The execution should have a stop loss though, it pulling back in the direction beyond your tp three times doesn't mean anything if you've liquidated three times in the process of doing that or one liquidation will empty your account.

[bocyaj]

Sometimes the stop loss and take profits will work in good way.But sometimes,it make you to think about later.Because the less profit after the huge price rise will make you to think like that.But the huge loss only save from this method.Sometimes people won’t accept the huge profit option was skipped only from the loss of opportunity.While considering the huge loss,they only worry of the loss of opportunities of huge profit.

[adaseb]

I am going to tell you right now that there is no indicator out there that is correct 95% of the time or even 80% of the time. There just isn’t.

You most likely back tested a small time period or your conditions weren’t based on real world conditions with slippage and actually getting a fill at your price.

[Oshosondy]

well the plan was to increase leverage from 10x -50x the strategy I have back tested has a 93- 96% success rate on the 1 minute chart at 50x leverage but that 4% will liquidate you

Increasing your leverage from 10x to 50x will make the liquidation price very closer, it can be used by expert traders, but using it can lead to liquidation at any time. Use money that you can gamble with for it. There are possibilities that success is possible, but also the means many traders funds are getting liquidated.

Taking for example, bitcoin at $20000. Using 50x leverage.
Liquidation price for long position would be $19600
Liquidation price for short sition would $20400
Not yet including the trading fee.

I have traded like this before, but I consider it very high risk and liquidation is possible at anytime.

[Scripture]

I am going to tell you right now that there is no indicator out there that is correct 95% of the time or even 80% of the time. There just isn’t.

You most likely back tested a small time period or your conditions weren’t based on real world conditions with slippage and actually getting a fill at your price.

TA works but not all the time, the market can go on a different trade against your analysis so it's true, it's not a 100% correct all the time and that's why you need to adjust accordingly and have a good strategy to minimize your loss, probably a stop loss can be a big help. Leverage trading is not easy, and increasing the leverage doesn't guarantee any profit, think if you can handle the risk before you proceed, there's a little margin on that and you might get liquidated easily.

[logfiles]

The fear and restraint you described are the emotions they always talk about, and they can pretty much mess up your trading strategy if you don't take care of them.. Trading on high leverage without any stop loss  is like suicide.
Foremost, no trader gets it 100% after several trades. At one point, there's going to be that one bad trade. You don't want to make 15 successful trades and some good profit only to lose all the margin to liquidation on the 16th bad trade.

i think stop loss, TP and risk reward ratio should matter a lot and maybe an improved win rate of above 50%.

[Fatunad]

One issue I have other than getting scared is to do with time restraints I am trying to find a trade quickly and not giving it enough time also aping in and usual sh*t
I am trying to come up with a strategy that works as close to 100% as possible and have found one on BTC/USDT with an average of 95% success rate. Other pairs are also high 80s to mid 90s
I have stopped trading for a bit and am doing more tests and paper trading

Is there a way to make this work or do others mainly trade with leverage how do you handle stop loss and take profit

The problem is not fear or timing. It is only your self-comfort and self-deception. The problem is the absolute lack of risk management and a perfectly polished strategy. At the moment, your trading is no better than slots in one-armed bandit. You will never come up with anything with such risks, because it is almost impossible to use it in long-term trading. Well, you can trade with such risks for a couple of days or weeks, and then what? And then the inevitable drain of the deposit and losses. This is a 100% guaranteed final for all margin traders using 2 or 3 digit leverage.

The fact that you use tests and paper trading is good. I myself once went through this. This approach is very helpful in identifying certain patterns in your trading and focusing around them. I can say for sure that sooner or later you will come to the conclusion that trading with x1.5 - x1.8 leverage will be more or less comfortable. The sooner you come to realize this, the more time and money you will save.

You wouldnt really realize these things if you wont able to experience for yourself and whenever you do touch those leverage then sooner or later you would be finding out whether it would really be just fine for you to
handle up such risk or not.Its true that this isnt particularly talking about fear or timing.You would able to find out on what are the things will mainly affect you along the way.
Its not really that suggestable on dealing up with higher leverage if your capability or knowledge/skills arent enough on handling such trading method or field.

[ShowOff]

Fear is one of the reasons for the failure of the strategies you develop. Trading is something that is very risky especially when you don't have enough spare funds to make ends meet. I don't know what to say when you want to get a proper answer on how to trade with laverge and deal with SL & TP. This must be hard to explain because everyone is so worried about the risks.

High leverage for high risk too, but it also allows you to get high returns. Take the middle way, do it with small funds and for the amount you can afford to lose, it will give you a sense of security, especially when expectations do not match reality.

[palle11]

OK I decided to try my hand again at leverage trading
The plan was to watch the market and when I see it making a move in one direction go in with high leverage for a small move with no stop loss

Don't always trade like this because you saw an opportunity and you want to through caution into the wind, this will reult into a huge lose. You might be escaping it but you can't escape it all the time since you doing a wrong type of trading. Trading with stop loss is more reasonable and reassuring than to gamble in trade. If you meet a bad trade, the losses are more severe that what you gain.

[Hamphser]

OK I decided to try my hand again at leverage trading
The plan was to watch the market and when I see it making a move in one direction go in with high leverage for a small move with no stop loss

Don't always trade like this because you saw an opportunity and you want to through caution into the wind, this will reult into a huge lose. You might be escaping it but you can't escape it all the time since you doing a wrong type of trading. Trading with stop loss is more reasonable and reassuring than to gamble in trade. If you meet a bad trade, the losses are more severe that what you gain.

Most of the time when noobs or newbies do see other leverage trading results which does end up on big profits specially on social medias then they do really get easily hyped up and believe that they could do it also.

This is where mistakes do really start and on the time that they had been wrecked out by the market then this is  where realization do happen.Leverage or futures trading is never been simple.

Make yourself that good with spot trading before you do consider on touching up this area because this do really require that knowledge and skills that you do acquire through lots of trading.

[taufik123]

Most of the time when noobs or newbies do see other leverage trading results which does end up on big profits specially on social medias then they do really get easily hyped up and believe that they could do it also.

This is where mistakes do really start and on the time that they had been wrecked out by the market then this is  where realization do happen.Leverage or futures trading is never been simple.

Make yourself that good with spot trading before you do consider on touching up this area because this do really require that knowledge and skills that you do acquire through lots of trading.

Noobs may at first try leveraged trading and they are lucky to get some profits. Without them realizing it is just the beginning and without having any knowledge of leverage trading and good chart reading, it is impossible to read the market well.

Futures trading is never that simple, there will be many complex issues and other things to think about. let alone use leverage unwisely by using high leverage and hope everything goes according to their plan. Even as a professional the use of high leverage will be very high risk.

There is never a strategy that works 100%, I'm sure of it, because every strategy has weaknesses. but it's easy for the OP to say his strategy will work on average 95% to 100%, is he a professional trader?

[wxa7115]

well the plan was to increase leverage from 10x -50x the strategy I have back tested has a 93- 96% success rate on the 1 minute chart at 50x leverage but that 4% will liquidate you
The plan was one quick scalp a day a move of 1/2% which would gain me 5-10% on my account

I think the theory is sound just need to work on the execution 

You have the answer that you're looking for right in front of you but you refuse to see it, not long ago it was common in the forum to see scammers selling scripts for dice which they claimed won 99% of the time, but what they do not told you was that when the script lost they lost everything.

You are not really getting any closer to become a successful trader, as long as the possibility of losing all of your capital is not zero then sooner or later you will lose it all, so you need to change the way you approach this problem and instead of concentrating yourself in your accuracy you need to concentrate yourself on not going bankrupt.

[Xampeuu]

if we use leveraged trading, it would be better to use a small leverage, so that this can process our psychology so that it is well organized. with small leverage without us giving a stop loss then there will be a stop out automatically, and this is very good for practicing our analytical sharpness. even though the OP managed to use high leverage, but in his heart of course he can't enjoy trading, because there is always a sense of worry, not to mention if there will be an overlot, of course it will be very dangerous

[Poker Player]

There’s no way to do a consistent profit using high leverage even though theres a clear market trend because theres always price swing on crypto equivalent to the volatility of the trend.

This

The thing with strategies as simple as you've described is that it's highly likely that a lot of people have tried the same strategy but failed.

I don't know why people insist on these strategies. Surely it is because they follow youtubers who give them "strategies" like this to get rich quickly, but they do not tell them that the faster the "strategy" is used, the higher the risk of bankruptcy increases, until it approaches 100% as you increase the leverage and use it longer.

Keep in mind that in trading you are competing against high frequency algorithms run by Hedge Funds, who have a lot of capital to move the market and who are emotionally neutral, they only make mathematical decisions.

In all the time I have been in the forums and interested in economics and finance, I have not yet seen anyone show evidence of winning consistently in the medium term (not even long term) with these systems.