Things I wish I knew when I started Crypto Trading

Crypto Trading. It brings with it some of the highest highs when you ride a rocket to the moon and the lowest lows when you watch your portfolio bleed.

What I’d like to provide to you today, are some things I wish I had known when I first got started, to hopefully shed some light about the trading world and maybe, just maybe, save you from some of the things I learned the hard way.

What kind of trader are you?

What the hell am I doing?

This is a question of self-reflection. You need to honestly look within yourself and determine what kind of trader you want to be. A lot of people fantasize about the Hollywood day-traders and the huge scores they make. Honestly, Day-trading is extremely stressful, and you can find yourself losing your money fast if you do not have time to babysit the market and especially if you do not know what you are doing.

There are three different types of traders:

· Day Trader (you make a daily trade or more),

· Swing Trader (you make a trade every 2–7 days, sometimes longer if that is what the trend requires).

· Investor (buys the dips, holds long term).

All three types are valid ways to make money but require different strategies. You may find yourself as a blend of these.

Personally, I fall into the Swing Trader and Investor category.

It is ok to not make a trade daily. Sometimes the best trade is one not made. Over trading is one of the most common mistakes of new traders. Let the trade come to you and know what you are getting yourself into. If you cannot answer why you made that trade, you are literally gambling.

  1. Market Psychology is extremely powerful.

Technical Analysis (TA) is a powerful tool that can help you make educated decisions, but know right away, it is not a crystal ball.

Aw Yeah. $DOGE is heading to the moon.

I’d like to point out that FUD (Fear, Uncertainty, Doubt) and FOMO (Fear Of Missing Out) are extremely powerful and even the most textbook chart can be broken causing a Black Swan event. Always practice risk management and utilize stop losses.

Understand too what an echo chamber is. If you drop yourself into a coin’s official Telegram channel or are speaking to the guy named “(insert coin here) Whale” they have a personal stake in wanting that coin to go up. I was burned when I first started trading by this when I would hear vast numbers of people in a group for a coin saying “This coin is going to $1 USD!” When you see enough people yelling it, it reinforces it in your mind and you start to believe it. FOMO starts to kick in. With that, learn how to calculate a coin’s price. It isn’t that hard. Which leads into:

  1. How to calculate a coin’s price.

So DigitByte ($DGB), is the coin I mentioned before that I was burned on. I was told it would be “$1 USD by the end of the year!” I did not know how coin’s prices were calculated, or how market caps worked and blindly threw my money in at the top of its market cycle. I paid dearly for this.

Look at the price in the above screenshot. This is calculated by the over all market cap ($563,193,234) divided by the circulating supply (9,739,480,205 DGB). This comes out to the price we see above. You can find all of the coin market caps here.

This means, for $DGB to be $1 USD, you would need a $9,739,480,205 USD market cap for that to happen. Is that realistic for your coin of choice? Ensure you fully understand the potential of the coin you are involved with and set realistic expectations.

  1. Beware of Twitter, your best friend and worst enemy.

I mean come on, it’s the internet.

Twitter can be a wonderful source of information as well as a terrible one. Keep in mind, 99.9% of people who are posting charts on twitter have already placed their positions, made their buys, and are now attempting to influence the market into the direction they desire. That guy who showed you (insert coin here) is going to moonshot? They’ve already bought in and if they’re in a group, informed them too.

Question everything. What indicators did that person use to come to that conclusion? Don’t know what that particular indicator is? Ask. Then look it up. Research it. Type that topic in Google followed with “Investopedia”. That’s what I do still even today. I won’t attempt to teach you TA because there are many people who have already prepared those lessons better than I could. See CryptoCred’s free crypto lessons here to get started on the right path.

Do your own research. (DYOR) That guy who just told you the market is going to the moon; do you even know who they are? How long have they been trading? Most twitter traders are a cartoon avatar. You have no clue who they are. Can you look your friends in the face and say, “I bought this coin because a Doge in a Navy Uniform said so.”? The number of followers someone has does not equal level of credibility or experience.


great mate