You've read it correctly! This post is about how you should NOT trade in cryptocurrency exchange.
Whether you are trading from Bittrex, Poloniex or any other Exchanges, this post will help you become a smarter and more disciplined trader in the Cryptocurrency market.
To give a short background, I jumped into the Ethereum rocket earlier this year at $40. I was able to purchase almost 80+ Ether with less than $5,000, which now is worth around $24,000. Are you wondering if I still have 80+ Ether? We'll get to that...
The first mistake I made was trading from digital wallet. (Dont judge me.. I had no idea what bitcoin was before I bought my first Ethereum). I've made pretty decent trades where I was able to increase my Ether by almost 10%-20% in the month of April and May (But who didnt right?). But the first lesson is that there is big price difference from the digital wallet and cryptocurrency exchange! Go ahead and compare the prices at www.gdax.com and www.coinbase.com (Gdax is an exchange owned by coinbase). So for the month of April and May while I still gained around 10-20% gain, I could have made even more by accumulating that small % difference in the price, if I had moved to an exchange earlier.
The second mistake, I will try to put this as a rule. Trade proportionally to your knowledge of the market to your capital. Which means, even if you have 100 ether, don't use the entire 100 ether to make 1 trade. So if you are new to cryptocurrency and Ethereum market, while you do your research, invest less than 10% of your current holding to trade to make profit. Leave the rest in your wallet to be safe. Even if you lose the 10% in trading, the gain from the rest of your capital will cover your loss. Eventually...
Pointer... be patient my friend...
The third mistake, is not controlling your emotions and this is the most difficult. There are many "opportunities" or in other words "threats" that could impact your capital. While good traders can make substantial profit in high fluctuation situations, it can be completely opposite for beginner traders. The prices might fluctuate so fast that your orders will never get placed or placed incorrectly. Repetition of this event will result in Anger, Anxiety, and Impatience. When you feel these emotions, its time to stop and retract all your capital. More often than not, trading with these emotions will have devastating impact to your cryptocurrency trading and capital.
Bonus... this is small bonus until my next post... Do not buy if you do not know. Do not buy coins that you don't know.
So if you read through these mistakes which I personally went through to learn cryptocurrency trading, you guys probably figured out what happened to my 80+ Ether.
But I will tell you anyways. From the second mistake, I saw my 80+ ether drop to 60 Ether in 1 single trade. That was worth $3000 at that time, but if I held, it is now worth almost $6000. This was the biggest loss, but I've had few other lessons that were pretty expensive..
Thank you guys for reading this post. If you guys have any questions in detail, don't hesitate to reach out! Happy Trading!