I’ve been trading 5x DLCs for a while, and Tencent has probably given me one of my biggest lessons so far.

I entered Tencent 5x Long around 0.057. The position moved against me quite badly, and today I decided to DCA again at around 0.035. Not long after that, it dropped further to 0.034 😅

So this story doesn’t have a happy ending yet. I’m still in the trade.

And that’s exactly why it has taught me a lot about DLCs.

DCA on a leveraged product is very different from averaging down on a normal stock. A DLC resets its leverage daily, so when the underlying keeps moving against you, the combination of leverage, volatility and daily compounding can hurt much faster than expected.

My view on Tencent hasn’t changed yet, which is why I was willing to add. But I also know that having conviction doesn’t automatically mean my timing is correct. If the underlying keeps falling, 5x leverage will punish that mistake very quickly.

That experience is also why the new Gold & Silver DLCs caught my attention.

Gold and silver can move sharply around interest-rate expectations, USD movements, inflation and geopolitical events. Having both Long and Short DLCs gives traders a way to trade those moves in either direction.

But after Tencent, I definitely wouldn’t look at a 5x Gold DLC simply as “gold is bullish, so buy and hold.”

For me, the setup matters more now. I would rather wait for momentum and direction to become clearer, keep the position manageable, and be much more careful about averaging down. Silver probably requires even more discipline because its volatility can be much higher.

One lesson I’m learning the hard way:

Being right about the eventual direction is not enough with leverage. You also need to survive the journey there.

My Tencent trade is still testing that lesson right now. 😂

Interested to see whether Gold & Silver DLCs will be my next trade — hopefully with better timing this time. #DLC #Gold #Silver #SGX @Captain's Watch