Expectations in check

If you compare the average performance of all major hedge funds from 1994 to 2018 you will find them under performing the S&P by more than 2 percent. These funds cut volatility risk compared to the index by about half. You still can get hit hard on your money annually. This depends in what direction the market trades and what your hedge fund of choice is trading in. In other words you can loose all your money. You also have the choice of “pooled funds” or “fund of funds”. Those are investments where you place your money distributed to a group of hedge funds. With fees of around 1 percent management fee for the hedge fund and the same for the “fund of funds” and an additional up to 20 percent performance fee in in the hedge fund and up to 10 percent for the “fund of funds” you can end up with a 32 percent fee structure. Making money this way does also not look to rosy. This is supposed to be the low risk conservative route. Expectations in check.

I our case we are trading a volatile market, the crypto space. This does not mean individual trade performance has to be staggering just because there is a lot of hype within such a market niche. Don’t follow greed just because in the crypto space other participants expect you doubling your investment or even more in a single trade. It is consistency that you should be after.

Bitcoin Daily Chart, Time To Enter:

BTCUSDT daily chart as of February 20th, 2020

On the 20th of February we entered the market of bitcoin with a reload to our established holdings. Dotted orange horizontal lines represent prior entry price levels where we still have partial position sizes exposed to the market. So called runners (more in our online glossary). We established the entry zone (green horizontal band) to be of supply and demand support. this edge was based on fractals, VWAP and fib retracement from a horizontal support perspective. That was in line with our directional support zones of simple MA support. It was an aggressive reload zone since the market had already progressed to its 5th leg up (white lines). Directional markets and extremely low risk entry zones are defined in our system approach to be more aggressively participated in.

Beside bitcoin we took positions in DASH, ETH, XMR, ZEC and LTC. All entries were posted in real time in our Telegram channel.

Litecoin Daily Chart, Low Risk Entry And Immediate Profits:

LTCUSDT daily chart as of February 22nd, 2020

The chart above of Litecoin (LTC) shows entry and exit points. We aggressively took partial profits quickly to get risk to zero and play with the markets money instead.(see our quad exit strategy) When counter signals were on the horizon we fully exited the position. Our three target exits were profiting 4.26%, 6.40% and 11.74%. All this within three days.

Bitcoin Daily Chart, Runner Stopped Out, Expectations In Check:

BTCUSDT daily chart as of February 24th, 2020

While we exited the LTC position entirely, we kept a runner on the BTC position. It provides for the option that a small portion runs further just like the runners from the orange dotted line entry levels. Doing this in a trend environment over and over and over again might seem like a boring endeavor, but… disciplined trading like this on a consistent basis results in a smooth equity curve.

This time though, the runner got stopped out at the break even entry level on the 24th of February.

Bitcoin Daily Chart, Another opportunity:

BTCUSDT daily chart as of February 26th, 2020

With the completion of a 5th leg up, it was smart to cash in Litecoin in its entirety. Shortly after the Bitcoin market depreciated nearly 18 percent from its recent highs. This again provides possible opportunity. We look to participate in the markets again, should we see bottom building near the price regions of $8650 or $8350.

Expectations in check

Market participants are in this game for many reason not just for our basic human need for security (= making money). This need goes alongside with the need for variety just as well (= i.e. gambling). More fortunes have been lost than made and if pulling the trigger gives you any kind of rush or satisfaction on an emotional basis, more likely than not, you’re in this game for the wrong reasons. One shouldn’t follow suit of what crowd behavior suggests and the average expectations might be. Positioning oneself outside the norm with ones expectations and setting them to a prosper outcome instead, has a much higher likelihood to provide the desired trading outcome. Consistent returns!

We aim at this point to reload on low risk retracement opportunities. Due to the recent more dominantly news driven market resulting into an increase of volatility, we have reduced our position size per trade by 40 percent. We are confident that this “surgical trading approach” is lower risk than hedge fund investments. If you conservatively manage risk and expose your money expecting performance percentages like we just had on LTC you might look like a hedge fund player but you still blow the average index performance per annum out of the water by far. We will continue to share our execution timing as well as charts live in our telegram channel.

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All published information represents the opinion and analysis of Mr Korbinian Koller & his partners, based on data available to him, at the time of writing. Mr. Koller’s opinions are his own and are not a recommendation or an offer to buy or sell securities. Mr. Koller is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations. As trading and investing in any financial markets may involve serious risk of loss, Mr. Koller recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

Although a qualified and experienced stock market analyst, Korbinian Koller is not a Registered Securities Advisor. Therefore Mr. Koller’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction. Past results are not necessarily indicative of future results. The passing on and reproduction of this report, analysis or information within the membership area is only legal with a written permission of the author.

Important Trading Risks and Earnings Disclaimers - Terms of Use

RISK DISCLAIMER: All forms of trading carry a high level of risk so you should only speculate with money you can afford to lose. You can lose more than your initial deposit and stake. Please ensure your chosen method matches your investment objectives, familiarize yourself with the risks involved and if necessary seek independent advice.

U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Trading financial instruments of any kind including options, futures and securities have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options, futures and stock markets. Don't trade with money you can't afford to lose.

NFA and CTFC Required Disclaimers: Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of experience and risk appetite. Do not invest money you cannot afford to lose.

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CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAN ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

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