When I first read about Bitcoin back in 2013 or '14 I was totally convinced that a virtual currency is the biggest scam of all time. Hadn’t I been so narrow minded I could be a millionaire by now. Not long ago I realized that this 'thing' - the whole Crypto World - is still in a very early stage and anyone who drops in is an early adopter. We have decades ahead of us and no one is late - for now.
Recently Bitcoin and altcoins have gone mainstream and there are a lot of newcomers in the scene. Many of these people have no trading experiences or even suck at dealing with money. Many of these people want to get rich fast or want to secure their future in the long term. All of this can be applied to me as well. I have many disadvantages and I don't hide them, so why should you bother reading further? My first reason is: I am very determined. My home country's government basically stole the people's pension funds a couple years ago, so I cannot count on that. I lost my job a couple months ago and starting my own business is a big pain in the ass. I'm running out of money and assets and I'll have my wedding in two weeks. I'm restarting my life from nearly zero income. I can't afford to make many more mistakes. So, I am very-very determined. My second reason is: I made probably all he mistakes a rookie can make. I know what I wrote two sentences before about mistakes but jumping into something new means that there is a learning curve and mistakes cannot be avoided. I want to share them with all the other newbie fellas so that you can make smarter decisions. I won't tell you the specs of trading but I can tell you what informations you need to know and how to behave in this community. So let's start.
Starting out in the Crypto World
So how does one start out with something completely unfamiliar? You can do your own research and start collecting all the data about cryptos which would be very time consuming. But I figured that taking a course on cryptos would be the fastest approach. I've purchased the online course of Suppoman on Udemy, as far as I know he is quite known in the crypto community. There are probably other courses from other influencers but I didn’t look further as I managed to get a basic knowledge about cryptos and trading with them in his course. For some people Suppoman’s style may be very annoying - my soon-to-be-wife hates him - but I really like his enthusiasm, you can tell he is a strong believer in cryptos. His course gave me a solid knowledge platform that I could build on. (Note: I’m not an advocate of Suppoman and I don’t get anything in return for recommending his course. This is just my personal opinion. You may take it or leave it.)
Lesson #1: Broaden your knowledge, find influencers, check their Youtube channels and online courses.
Educate yourself
Even though I finished an online course I still wasn’t entirely sure what Bitcoin is, how it is made or what the concept behind the currency is. Do you know what’s behind the money that you keep in your wallet and bank account? If you don’t then I suggest to look that up first because it is crucial in understanding what the difference between ‘real’ (even ‘real money’ isn’t REAL) and crypto currencies are. Then you will have to understand what Bitcoin and alternative coins are, how they work and how they are being created in the first place. You must understand at least the technical basics even if you are not a tech-savvy person. This is a must!
Lesson #2: Understand the basics of Cryptos. Here’s a video that will help you in that.
Don’t jump into the shallow water head first
I didn’t even finish the online course but I was so pumped up - beware, Suppomans enthusiasm is sticky - that I bought my first tiny fraction of a Bitcoin and made some trades with some altcoins whose name sounded good or were mentioned a lot by other people. This was on the 10th of July, one day before the first crypto bloodbath in this month. That was a very-very bad decision on many levels: I had very little money to trade with so I should have been more cautious. I made only emotional decisions and no rational ones. When I realized my bad decisions I got the FUD (Fear, Uncertainty, Doubt) and started selling at a loss, this way my low amount of money got even lower. Then I got the FOMO (Fear Of Missing Out) and started to jump in on several good sounding coin-bandwagons in various exchanges with a small gain and more losses. The first two weeks were a nightmare in Cryptoland but I’ve learned new lessons.
Lesson #3: Do not trade with more money that you can afford to lose.
Lesson #4: Be rational, don’t act based on your emotions. Be like a rock. (Humans are emotion based beings and so are most of our decisions. There is no place for that while trading.)
Know how to read the market
During the first two weeks it became clear that I cannot read the charts correctly. As I stated before the online course gave me a solid platform but I didn’t built on it, I thought it was enough. The Crypto market is very different from a stock exchange. Cryptos are a lot more volatile, you could gain a lot of coins one day and loose all of it the next day. So I started to dig deeper into Technical Analysis. TA is crucial. By analyzing the market history you will be able to predict what the future may hold. You may still run into a dip or rise at the wrong point but your chances of making good trading decisions will be higher. If you happen to spend too much time on TA and you can’t buy/sell at a price you initially wanted, be patient. In the long run it pays off. I recommend signing up on Coinigy where you can use a big variety of tools and you can start to analyze the shit out of your coins. Also I would recommend to read a couple articles and watch Youtube videos on analysis. Here are my two picks for starters:
Bitcoin Trading channel of Coinigy Bitcoin
This article by Wolf of Poloniex
Lesson #5: Learn Technical Analysis! Apply your knowledge before any trade!
Lesson #6: Patience is a virtue.
How to decide what coins to buy? How to decide on a strategy?
Let’s assume you know everything you could gather about coins, you can read and analyze the charts you have set up a wallet with some Bitcoins or Ethereum and you want to start trading. But what? How does one decide what to invest in? To answer these questions you will have to decide on your trading strategy. If you want to make daily trading then you should invest in coins that are good for short term trades. If you don’t want to spend much time with trading, then you should buy into coins that are promising for the long term, that means months or even years. I know that sounds easy but how does one know which altcoins are good for the short term and/or long term? For that my fellow newbie friends you will have to make the most boring thing: RESEARCH.
Researching coins is a big pain in the ass because there are thousands of them! Do not consider buying into a coin which has no White paper! Check out the coins' background, the dev team, who are the people behind it, what did they do beforehand, check out the companies supporting that coin if there are any. But most importantly check out what purpose and functionalities the coin has. Many altcoins have been developed specifically to address concerns raised over the future and long-term viability of Bitcoin. Be sure to check out the technical background of altcoins. Personally I think that the best strategy for trading is to invest in a few long term coins and do daily trades with a few other strong coins. This is not written in stone, but you still have to decide on a strategy, otherwise you will get lost in the vastness of coins. A strategy helps to maintain focus. I recommend reading through the site Crypto Currency Facts.
Lesson #7: Do your own research!
Lesson #8: A trading strategy helps to maintain focus
What if you have no time for research? How do you find out which coins to invest in?
This is the part where the community comes in. There are lots of crypto-communities and influencers on Facebook, Youtube, Twitter and Bitcontalk who discuss coins all the time. The amount of information pouring in is HUGE! Sometimes it is very hard to decide who’s opinion to listen to. You know the proverbial saying about opinions and a-holes, right? Everybody’s got one… Find the people who have the most experience in trading with coins, follow and listen to them carefully and narrow down your list and create a strong portfolio. But in the end before you make your decisions you still should do your own research to match them with the various opinions. I made some losses because I listened to someone in a thread, but blaming someone else for my loss is just rubbish. Also beware of scammers and scamcoins (Read up on ChainCoin.) Remember: in the end it is your choice, your decision and no one else’s. The one person to blame or praise is YOU!
Lesson #9: Invest only in coins in which YOU believe in!
Be careful about what you post in a community
Most communities gather around a specific coin or person. Every community has its own rules which are not always clear at first. Be sure to check that out and if you can’t find it, get in touch with the groups' admin and ask your questions before doing anything wrong. Asking is never a bad thing but if you start posting shit that is considered as spam, you’ll get banned in minutes. If you are lucky, you get a warning, then you have a chance to retract whatever you did and ask for apology. I almost got myself kicked from a Facebook group because I posted an affiliate link, ‘masked’ as a generic inquiry. Honestly, I would have deserved to be banned but I got a warning so I made an apology, the post was alredy gone. This was a lesson learned.
Lesson #10: Communities are strong. Be humble and respectful.
What if the unthinkable happens and you loose all your coins?
If you loose all your coins because of a market crash or a hack… well the only person to blame is yourself again. This may sound a bit strong but think about it: you are dealing with a currency that has value. It is your money in an open market and you are responsible for it’s safety, the tools are available for it. Crashes happen all the time and people are stealing things of value. It’s always been like that. August 1st is approaching and people are freaked out what is going to happen because of Segwit2x. There are many opinions circulating about this issue but I cannot add mine as I’m still new here and I’m just waiting for it to happen. I’m not going to be around the internet for a week, I will miss the show entirely. First of all: grab your towel and don’t panic. You can prevent a big loss if you make the necessary precautions. When a crash is approaching it is a safe choice to get your coins off exchanges and store them in a wallet on your phone, PC or a secure online wallet service. Also it is wise to back up all keys of all your wallets in at least two places, one of them stored in a separate place with no internet connection (paper, usb drive). To avoid stealing by hacking simply set up two factor authentication on your accounts. All of them! Logging into your accounts will take longer, but your coins will be safer and a lot harder to hack. I recommend reading this article below:
How to secure yourself with 2FA authentication and how to reset google auth on a new phone?
Update: I alsore commend this article about the best wallets:
Which is the best Cryptocurrency wallet of 2017
Lesson #11: Don’t panic. Panic always leads to bad decisions.
Lesson #12: Back up your wallet keys. Set up Two Factor Authentication (2FA).
This is it. These are my advices for beginners after 3 weeks in Cryptoland. There are probably many more things I missed but I think for newcomers these are the basic issues to get familiar with. Be smart. Smarter than I was in the beginning.
This is my first post on steemit and I would appreciate any upvotes, shares and follows if you find it useful. Any suggestions and lessons are welcome in the comments. Cheers!