Don't take heavy positions in illiquid coins · LangLang Trading Principle
In coins with thin order books and low volume, slippage on entry and exit eats most of the profit, and with a heavy position you can push the price down yourself and be unable to get out. A high-level breakout plus a heavy position plus poor liquidity is the most dangerous combination.
In LangLang's words
You really can't take too heavy a position in coins with poor liquidity
The order book is too thin; slippage on entry and exit alone eats your profit
A high-level breakout plus a heavy position plus poor liquidity — stacked together, that's trouble
How the course teaches it
BIT LangLang · 2024-05-11 — CEL vs. TRB: Whether to Buy the Minor Pullback or Wait for the Breakout Depends on the Bigger Structure
2024-05-11 · Video 14:04
A large box breakout can be chased but needs a structural stop
LangLang mentioned that around 0.4 is the box high; after the first touch there was a pullback, a false breakout that was reclaimed and then converged, and the subsequent breakout was a short-term long opportunity with good time, cycle and degree. He chased long around 0.43 that day, on the grounds of the breakout structure and the reclaim after the false breakout; but because the position was too large and slippage too big, he could not withstand the volatility and "could not hold it."
BIT LangLang · 2024-05-11 — CEL vs. TRB: Whether to Buy the Minor Pullback or Wait for the Breakout Depends on the Bigger Structure
2024-05-11 · Video 30:20
Review and reflection on churning and slippage
LangLang mentioned that at his size, CEL loses about 3 points on entry and another 3 points on exit, about 6 points round trip; with leverage, about 30% of capital is eroded. He admitted that recently he has been "churning too much, with poor logic and poor execution" and is adjusting his opening state. On a thin order book, "if you hit right, the profit is discounted; if you hit wrong, you take a huge loss," which is not worthwhile for his capital size.
BIT LangLang · 2024-05-04 — Trading a BTC Range Break: Enter After the Failed Retest, Scale Out at Supports, Filter by Liquidity
2024-05-04 · Video 21:36
Order book capacity determines whether a position can be executed
LangLang uses an order size of about 190,000 USD with 5x leverage to illustrate the liquidity problem: if a size of about 179K were put into CEL, a single order might sweep the order book to about 0.238, causing about 3% impact, and about 6% slippage going in and out, making the trade unfeasible. He mentions that many small coins must first rise about 10% just to possibly cover the impact cost, so with his capital size, he can basically only trade larger-capacity instruments such as BTC and ETH.
BIT LangLang · 2023-12-30 — Separate Logic, Entry and Outcome: Classifying Losing Trades on TRB, SATS, ETH and ORDI and Sizing from the Stop
2023-12-30 · Video 3:50
Why manipulated coins are hard to profit from
At the start of the review, LangLang mentioned that some manipulated coins, even if they can rise many times over, are hard to profit from because they lack market consensus and repeatable patterns. He believes that a large magnitude does not equal high tradability; if the price action is controlled by a few funds, ordinary traders find it hard to find stable entry and exit bases and are prone to repeated stop-outs during violent fluctuations.
BIT LangLang · 2023-12-30 — Bullish but Not Aggressive at Highs: BTC's Range, ETH's Relative Strength and Low-Leverage Planned Trading
2023-12-30 · Video 18:09
Do fewer fancy moves and set it and forget it
BIT LangLang mentioned not to frequently do options hedging, hedging, locking positions, rolling positions, and other "fancy moves"; the more actions, the easier it is to get confused, and survivor cases cannot prove the method is sustainable. Before buying, one should determine take-profit and stop-loss; after buying, "set it and forget it," wait for market feedback, and do not constantly add actions because it is strong today and weak tomorrow.
BIT LangLang · 2023-11-25 — Pick the Coin Before the Entry: Comparing Leadership, Structural Maturity and Not-Yet-Launched Setups
2023-11-25 · Video 50:36
Five dimensions for horizontal comparison of candidate coins
When comparing candidate coins, BIT LangLang does not rank by a single indicator but looks at five layers of conditions: stronger market position, more mature higher-timeframe structure, not yet started and close to structural stop-loss, greater upward space and explosive power, and better trading executability. SOL is called the leader from beginning to end, present in every wave, with large volume and a good trend; FITFI is evaluated as the most beautiful daily structure in the market at the time, with clear pressure levels, to be treated directly as a breakout. NMR's clear advantage is that APE and others have already moved while it has not; EGLD can also be watched near the starting structure because it has not yet broken out.
BIT LangLang · 2023-11-11 — Why Not to Chase Breakouts at Highs: Trend, Room, Divergence Count and Liquidity-Aware Sizing
2023-11-11 · Video 30:13
Bottom-Fishing on the Crash Night and the BNT Heavy-Position Lesson
When BIT LangLang reviewed bottom-fishing on the crash night, he admitted that he knew it was counter-trend and only wanted a short rebound, but encountered continuous selling in one bottom-fishing trade and lost money; after SOL also stopped out at the same time, his mindset became further unbalanced. During the market crash, he first had the expectation that BTC would rebound after a pin bar; at the moment BTC stabilized, BNT was the strongest rebounding altcoin at the time, so it was identified as a relatively strong coin.
Weekly reviews where it applied
No published weekly review has had a market where this principle applied yet.
LangLang's Trading Principles · The Rules His Course Keeps Coming Back To