How To Trade Cryptocurrencies?

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How do I start trading cryptocurrencies? How to make the first trade? I believe those are one of the most asked questions in the past two years. First of all, it is considered very speculative to trade cryptocurrencies. It is very volatile and that is the main reason why many traders are jumping in on board with crypto trading. If you follow your strategy and discipline yourself, you’re bound to have good profits. Here is a list of a few advices how to start planning your strategy, what to focus on, and, eventually, become more disciplined. 

Don’t follow the hype

As we experienced previously most of the massively hyped projects in crypto are now down almost 98% since their peak prices. These type of investments are mostly based on the hype that the community generates. Be smart. The saying “buy the rumor sell the news” is there for a reason.

Top Losers from ATH. Source: onchainfx.com

Take small profits, don’t be greedy

It’s much better to take small profits like +2% or even +1% in the long term. Don’t be greedy, trade cryptocurrencies with ease, and don’t expect your investments to rise more than +10% to +50%. It will most likely never happen again in crypto. For daily stock traders, there is a “1% risk rule”. This keeps your capital losses to a minimum and avoids harsh market conditions. You can achieve this by using targets and stop-loss orders. The provisional idea is that if you take a 1% profit on every trade you make after a year you can grow your capital by +365%. Think long term, not short.

Follow your gut/heart

Most of the times, you kind of feel when the market is starting to switch directions. Again – don’t be greedy and do what you think is best for you. If you have a feeling, based on your experience and knowledge – follow it. It is better to take profits on +1% – +2%, than rather loosing -10%, or even everything on your trades or investments. Most beginner traders have this feeling that I won’t get this chance anymore, so I have to use it 100%. That is false. The market is constantly evolving and more projects and institutions are coming in, so don’t worry about your single trade.

Cash out everything to fiat

While some experts say that Bitcoin mass-adoption is a 50-year long-term plan, it is highly unlikely that the broader society will switch to only Bitcoin or even cryptocurrencies in general. At the moment, and for a couple of years from now on, fiat will be the main form of money and as they say “a bird in hand is better than two in the bush”. I’ve heard stories from many investors, that they cashed out everything to fiat when the bull-run started to emerge. They took all the profits when Bitcoin was at $9000 – $10,000. Of course, they could’ve profited more, but how do you think – are they regretting something at this point?

Educate yourself constantly

There is nothing more valuable than education. It won’t do any harm to you or your investments, only good. You have to stay up to date. Learn about cryptocurrency trading. Learn more about the industry that you have invested in, and know every little detail. It will grow your confidence in regards to your trades or investments.

Do Your Own Research

This binds with the first advice – don’t follow the hype. You have to research the assets you are willing to invest in by only yourself. At this time, when social marketing and the internet, in general, is constantly evolving, you have to understand, that nobody will share valuable information for free.

Further, this also applies to your gut and nerves. You will feel constant anxiety in those cases when you follow a different opinion rather than yours. On the other side, when you build your investments only based on your own knowledge, you will feel more safe, and secure about your decisions. Trade your cryptocurrencies with knowledge!

Never invest money that you can’t afford to lose

There are countless stories of people investing their life savings, mortgaging properties, applying for loans, and in general, investing more money that they can afford. These actions are at very high risk, and almost never pays off. Again – it is better for everyone around you if you trade cryptocurrencies with only the amount that you can afford to lose. Even if that is only $10, you will feel more calm and balanced. Because at the end of the day – these are investments, which are meant to improve your life, not destroy it. Crypto investing is unique in its base – you can invest small amounts in almost every kind of a project. Crypto investments of as little as $7 dollars can gain you multiple thousands in return. And it is definitely better to lose $7 dollars rather than $700.

“Be happy about what you have, not what you could’ve had!”

However, this is not financial advice. I don’t have a financial degree. This summary is only based on my and my friends experience. Do your own research and don’t base your opinion on somebody else. And most importantly – educate yourself! 

Photo by rawpixel.com from Pexels

WARNING! Don’t even think about crypto investments until you read this!

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I remember it like it was only yesterday when all the coins and tokens were booming and you could get massive gains in every crypto asset you invested. It was the crypto investments bull run of 2017. It all looked so easy and it almost felt like this could go on forever. But it was just a big bluff since I and my friends weren’t with a financial background, and only got into cryptocurrencies in May 2017.

The first crypto investments – Bitcoin and altcoins.

Me and my friends started talking about cryptocurrencies in early May 2017. My ex-girlfriend had been talking about this thing called Bitcoin and I started reciting it to my friends. The more I talked about it, the more I understood it in the sense of a great investment opportunity. It was the time when Bitcoin was around $1,200. I told them that it is a new form of money, only fully decentralized, with no one able to shut it down or take full control of it. That it is a great opportunity to invest because ever since it is created, it has seen only a rising pattern (at least that’s what I thought back then).

It seems like I was very persuasive and they really understood my arguments, because the next time I saw my friends, they had already registered in this thing called “Poloniex”. At that time, as I already mentioned, neither of my friends had any economic or financial background. I didn’t even know that there are such things as exchanges, hence Poloniex.

The first trades

So we put our heads together and started looking at all the assets, charts, prices. Everything seemed like out of this world, and needless to say, we didn’t understand anything. My friends bought a little portion of Steem (STEEM), Ripple (XRP), Stratis (STRAT), Litecoin (LTC), Siacoin (SC), Folding Coin (FLDC) (I know, right?) and Dash (DASH). Why we invested in those particular assets, I have no clue. It just seemed like the way to do. My friend, who found out about Poloniex kind of lead me into this. However, when we sat down, and he showed me how everything works, and at first I bought into Ripple. But I kind of didn’t believe Poloniex, I switched to Bittrex. Later that paid off.

Trading history of my friends first trades

The first profits

As you can see in the picture, my friend quickly got to know how trading works. So very early in the game, he picked the first “fruit” in the form of crypto profits. At that time the total market cap was around $80 billion and Bitcoin’s price was a little over $2,2k. Of course, we had no idea that it was forming onto the biggest bull run in crypto history.

However, I kind of didn’t believe altcoins at first. Mostly because I didn’t have such high profits as my friend. Since I knew a lot about Bitcoin (a lot at that time, enough to understand that it was the first cryptocurrency), I invested in Bitcoin.

Of course, when I later saw how my friend was making even more money from altcoins, I started investing in them as well. Little by little, we got to know the secrets behind crypto trading. We found coinmarketcap.com, and similar websites where we could at least read about what we were investing in. We began buying more and more coins, based on what those companies were promising to their investors.

Investing in Initial Coin Offerings (ICOs)

Since I didn’t have much luck in trading altcoins, I stopped doing that and sort of was educating myself about cryptocurrencies. I watched my friends investing in them daily, we talked about their crypto investments and later on, I researched them. In some I believed, in some not as much, but basically, I was accumulating more Bitcoins.

Later our discussions changed as they started talking about this thing called ICOs. They said that it is so easy to gain x10 profits and even more. You just have to use MyEtherWallet, buy some Ethereum and look for most popular ICOs. It all sounded too easy. However, they got huge profits out of these crypto investments. But those profits were crypto-wise, not fiat-wise. Later on, they had invested in more than 20 ICOs and the flat where they resided almost started to look like a full-time office. To me, it all looked so sketchy. I just sat behind and observed their success.

The biggest Bull Run in crypto history

After a couple of months, in late 2017, they were almost like professional crypto investors. They used all the opportunities that crypto handed over to them. They signed up for countless Airdrops, used Steemit to accumulate more crypto and with profits gained from steemit they invested in more crypto projects and ICOs. At that time, day by day crypto assets were rising at unbelievable measures and it seemed like you could invest in almost everything. They went from a couple of thousands to a couple of tens of thousands. I remember my friends 28th birthday when he said that now he has up to $28k in profits. We talked about what he could do with that kind of money and how his life could change, but eventually, he didn’t cash out. Now it seems like the biggest mistake, but as we say – you only learn from your own mistakes.

From $0 to $40,000

My other friend, on the other hand, didn’t have any funds to invest with, so he used Steemit to raise his capital. Now looking at what he did, it almost seems unbelievable, because he went from $0 to approximately $40,000. You could say that they got really lucky with the projects that they chose. Of course, they also invested in a few scam projects and lost their money, but that is not even comparable to what they had gained. At one point they profited more than $1k a day, so they came up with a plan: $100,000 challenge.

Considering the number of profits, it is needless to say that we, people with no financial or economic background, talked a lot about how we would spend this money and basically, we were shocked but very satisfied at the same time with our ongoings. All the provisional ideas, what if, and when that will boom to this amount was an everyday part of the discussion.
They invested very early is projects like Antshares (now NEO), Bitquence (now Ethos), Dent, and Substratum. $20 turned into $2,000. To me, they seemed like absolute crypto-guru’s.

Me on the other hand, I hadn’t invested in any ICOs at that time, because all the “MyEtherWallet”, “Gas”, “decimals”, and overall – “sending my money to some kind of a project which promised a revolution in the world” seemed a little bit odd.

“Money that comes easily disappears quickly”

Just recently I approached him to ask how he’s doing. It’s not like we don’t communicate since the bear market started, but the discussions about crypto have decreased to a minimum. Mostly it’s because the last drop in the sea for him was the hack of his Ether wallet. He lost most of his funds and investments. His biggest mistake was that he held all those assets in one wallet and was not cautious enough about the security. When I asked whether he plans to invest further in the future, he was positive. And that is understandable because the bear market kind of makes you think about your past decisions. I couldn’t leave without an interview, so I asked him to comment on what he would have done differently and a few words about his experience and future advice:

“Money that comes easily, disappears quickly. I have no idea what would have I done differently. It’s hard to say what would you do if you had another chance. I would have definitely cashed out. It’s like I thought that I will earn a lot of money, but you have to work hard for a lot of money and you have to understand what are you doing. You have to take profits. I didn’t have any education. The amount of money I had profited completely made me blind. We did almost anything that crypto offered, we tried this, then that, all in a row. I remember that time as some kind of euphoria, it didn’t seem like it would end at all. It seemed that real-world crypto adoption will happen instantaneously. To me, it felt like I needed to get as many coins as I could.”

Good or bad experience?

So I asked whether crypto did more good or bad to his life since he carried such a harsh story on his shoulders. He replied completely positively. No regrets is his motto of that day since he learned so much about many different industries, mostly economics, finance, money and things related to that.

“My main mistake was that I didn’t accumulate more Bitcoins. Every day I had that feeling that I needed to get more bitcoin, but I didn’t. I bought more and more altcoins. The fact that I didn’t cash out, basically means nothing, I needed to accumulate more bitcoin. Everybody told me and I read a lot that your portfolio is based on Bitcoin. So yeah, if I regret something then this is that. But the amount of knowledge I gained from crypto is unbelievable. I learned so much!”

It turns out that before he got hacked, he had more than 50 different assets. Now that’s hoarding!

Advice for the next bull run

Don’t follow the hype

As we experienced previously most of the massively hyped projects in crypto are now down almost 98% since their peak prices. These type of investments are mostly based on the hype that the community generates. Be smart. The saying “buy the rumor sell the news” is there for a reason.

The biggest losers from ATH. Source: onchainfx.com

Take small profits, don’t be greedy

It’s much better to take small profits like +2% or even +1% in the long term. Don’t be greedy, and don’t expect your investments to rise more than +10% to +50%. It will most likely never happen again in crypto. For daily stock traders, there is a “1% risk rule”. This keeps your capital losses to a minimum and avoids harsh market conditions. You can achieve this by using targets and stop-loss orders. The provisional idea is that if you take a 1% profit on every trade you make after a year you can grow your capital by +365%. Think long term, not short.

Follow your gut/heart

Most of the times, you kind of feel when the market is starting to switch directions. Again – don’t be greedy and do what you think is best for you. If you have a feeling, based on your experience and knowledge – follow it. It is better to take profits on +1% – +2%, than rather loosing -10%, or even everything on your trades or investments. Most beginner traders have this feeling that I won’t get this chance anymore, so I have to use it 100%. That is false. The market is constantly evolving and more projects and institutions are coming in, so don’t worry about your single trade.

Cash out everything to fiat

While some experts say that Bitcoin mass-adoption is a 50-year long-term plan, it is highly unlikely that the broader society will switch to only Bitcoin or even cryptocurrencies in general. At the moment, and for a couple of years from now on, fiat will be the main form of money and as they say “a bird in hand is better than two in the bush”. I’ve heard stories from many investors, that they cashed out everything to fiat when the bull-run started to emerge. They took all the profits when Bitcoin was at $9000 – $10,000. Of course, they could’ve profited more, but how do you think – are they regretting something at this point?

Educate yourself constantly

There is nothing more valuable than education. It won’t do no harm to you or your investments, only good. You have to stay up to date. Learn more about the industry that you have invested in, and know every little detail. It will grow your confidence in regards to your trades or investments.

Do your own research

This binds with the first advice – don’t follow the hype. You have to research the assets you are willing to invest in by only yourself. At this time, when social marketing and the internet, in general, is constantly evolving, you have to understand, that nobody will share valuable information for free.

Further, this also applies to your gut and nerves. You will feel constant anxiety in those cases when you follow a different opinion rather than yours. On the other side, when you build your investments only based on your own knowledge, you will feel more safe, and secure about your decisions.

Never invest money that you can’t afford to lose

There are countless stories of people investing their life savings, mortgaging properties, applying for loans, and in general, investing more money that they can afford. These actions are at very high risk, and almost never pays off. Again – it is better for everyone around you if you invest only the amount that you can afford to lose. Even if that is only $10, you will feel more calm and balanced. Because at the end of the day – these are investments, which are meant to improve your life, not destroy it. Crypto investing is unique in its base – you can invest small amounts in almost every kind of a project. As you saw in the pictures above – crypto investments of as little as $7 dollars can gain you multiple thousands in return. And it is definitely better to lose $7 dollars rather than $700.

“Be happy about what you have, not what you could’ve had!”

However, this is not financial advice. I don’t have a financial degree. This summary is only based on my and my friends experience. Do you own research and don’t base your opinion on somebody else. And most importantly – educate yourself! 

Photo by Chris Liverani on Unsplash