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23.12.2022
Today’s trading review is a small recap about the trade/trades I did on Cream Finance. After I had a big loss on FitFi, this helped me make a good chunk of the losses back. It was definitely a longer trade (in terms of time span) than I normally do, but I was really certain that this would work out.
You can take a look at my recent trade idea on Solana (link to Solana article), where you would be in profit right now if you decided to take that one.
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So for context, Cream Finance had 2 big spikes, the first one going all the way up to $25, where I did not partake as I was not at my desk at that time. It then held around the $10 area and did not seem to break down and eventually broke to the upside, where it topped in the $18ish area at the beginning of December. You can see a chart of Cream Finance below with the big wicks into the $18ish area on the 30th of November and 1st of December.
I started to get into the trade looking for a Short, this I was certain of, as we are still in a bear market and times of uncertain world economies. I was sure that Cream Finance would eventually fade down to single digit price levels. The hard thing with these kinds of trades is to get the timing right, as you think you can go in at any time as it will fade nonetheless.
This can lead to big losses, an example of such a trade can be read in my trading review about the cryptocurrency FitFi (LINK FOR FITFI ARTICLE), where I was too confident and ended up paying for it. This time I wanted to be more patient, wait for the big spikes to finish and get in on the trade later when the backside is happening. Below you can see a hourly chart of Cream Finance so you have an idea of the price action.
In the middle there is a really big hourly candle where the price went ballistic from about $11 and topped out at almost $19. I made a trade here with small size, but did not want to get in too big, as price action can get really wild in short amounts of time.
I shorted with small size in the $17 to $18 area, which I closed right away when it dropped to $14ish area. A statement of the trade is below. I opened Short positions at multiple price points and also closed them at different ones, so that it is not always bang on with the statement. Below is a statement of one of my first trades on it.
As Cream Finance went for another round and I was a lot more patient this time, as I did not want to blow up. I started shorting in the $16 with a small position and ended on the way down whenever it tried to spike but failed to get going. So in the end I had a $14.60 average and my best cover was in the $10.80s area, at around which price level Cream Finance found support weeks earlier. You can see that if you take the recent low on the hourly chart and look to the left. Below is my biggest % gain on CREAM.
I tried to go Long CREAM a few times to hedge for potential bigger spikes and offset some cost. This did not really work well, but it was with 1/5 or 1/6 of the Short trade side and the stop was really tight so that was not a bad deal to the PnL. The statement below shows a Long attempt.
Even though it took some time for the trade to play out, I am happy with this. In addition it was way less stressful than watching the “main” action where you can possibly blow up in 5 minutes or less.
When I trade cryptocurrencies, I try to go in with small size at first and add fast if I am right and have a little cushion.
I hope that this inside might help someone and I am happy to provide it. Leave a comment if this story helped you in any way or if you liked it.
If you did not like it, then I am happy to read comments on what I could improve on.
Have a great day and happy Christmas to everyone who celebrates!
Niklas
This is not financial advice, it is for educational purposes only!
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