Here are my top lessons that I have learned in the 9 months of crypto trading, investing and mining. It has been a wild ride and it was exhilarating experience. I have learned and also profited from it.
I hope it helps you get started and be wary of the mistakes I made so you can try to avoid them if you can. They are in no particular order. Please note that this is my own personal experience and may not apply to your trading or investment style.
This is by no means investment advice.
Trading Note to self - Read it again and again until it sticks in your head.
Do not trade more than what you can afford to loose !
Do not margin trade unless you absolutely know what you are doing.
Be careful with Stop Loss Limits and how you place them. Crypto can swing up to 50% at a time and your stop loss could stop you out only to bounce back up in a very short space of time.
Never panic sell as there is always going to be a bounce. Sell at the bounce if you must sell.
The most important thing is your entry. Never buy at the top. Where is the top ? When you see it!. Never buy immediately after first drop after a big gain. Wait for 2 or 3 more bounces. Want to be technical at this ? Learn Elliot Waves. Or use RSI / Parabolic SAR indicator. 5 / 15 Min time frames work best for identifying entry/exit points in the short term. For longer term opportunistic buys, buy good (meaning of good under Investing category) coins that are lying low or has been flat for some time. Do not buy in a FOMO (Fear of missing out) when charts are going exponential (straight up) especially in a 1/5 min chart. Another good method is using the 'Boss of Bitcoin method' using 7/77 moving average lines on a 243 min chart. None of the TA method nails it 100% but they do give a good guidance and improve your chances.
"Hang on for dear life (HODL) the COIN" is something you will hear a lot when market down turns. Well in my experience HODL sometimes it work out, sometimes it doesn't all depends on your time frame and coin you hold. In a boom market it works as a crypto will likely turn back up in time. However, given the amount of new crypto added, it may harder as money gets invested into more newer coins. Question is how long are you willing to wait. Or you prefer to cut losses and go to a winning coin and gain up. What I learned is that it is always easier to HODL when you bought it cheap or it has already appreciated above your capital. So bottom line, get a good entry price. If the coin is in your long term investment, then HODL it !
Cut losers and add to winners when the trade falls out of your plan for it.
Trade with no or less emotions. I will say this is hardest and comes with practice and after a couple of burns.
Keep an open mind. There is more than 1 tree in the forest - Don't get permanently stuck to specific ideologies or cryptos no matter how good the marketing / tech is. There is always something new on the horizon.
When a crypto is too hot (when everyone post rockets and moons) and everyone is expecting something to happen (sell before it happens or just after at the top unless this is your long term holding.) - Buy the rumour Sell the news.
Checkout any news before Selling or Buying. Fake twitter/Reddit rumors or news are constantly posted to sabotage or pump a coin. John Mcafee - You decide :)
Trade on big Exchanges where there is sufficient liquidity. Else stuck with coins with no buyers. My favourite Exchanges are Bittrex and Binance (Referral Code - https://www.binance.com/?ref=10033591) . I use Binance for most trading as they offer 50% discounts on trading fees (if you buy some of Binance coins (BNB) even though their fees are already lower than Bittrex fees besides offering a mobile app. Bittrex offers amongst the largest range of Cryptos available. Binance offer amongst the most popular ones.
“Diversification is protection against ignorance. It makes little sense if you know what you are doing.” - Warren Buffet. Diversify up to 5 coins at most or it will be hard to keep track and monitor.
Always base your trade profits in BTC (unless a new coin takes over dominance as base cyrpto currency) Do not base your profit on USDT unless you trade only with USDT and cashes out in USDT. Else you will loose your BTC and most likely loose in USD value too long term.
REMEMBER ALL THE LESSONS or THE ONES YOU LEARNED. Making mistakes is ok. Just learn from them and don't keep making them.
Investing
Do not invest more than what you can afford to loose !
For long term investments, buy the cheapest coins with good potential. Established coins in the top 10 may offer great value too but it is harder for them to go say 10x or 20x.
Good team, communication and marketing to community is just as important if not more important than the tech or whitepaper.
Invest in platforms rather than single product / solution coins as platform has more use cases.
Invest in platforms that are backed by research and academic review where possible as rigorous design and architecture planning will go a long way to ensure success of the platform and not requiring so many hard forks.
Be wary of so called Crypto or Bitcoin Investments. Many are outright scams or ponzis scheme. Some could argue that Bitcoin and cryptos are also Ponzi or we are in a bubble.
Are we in a bubble ? Yes but the bubble is not likely to blow up right now as this is just the beginning. Blockchain tech will change the world in a couple of years and many coins will NOT survive just like many companies during the Internet bubble. However, it does present an massive opportunity for those who invested early like it did during the Internet bubble. Those who get in late will get burned. Those who doesn't do anything will I guess be just fine and enjoy the products later in a few years like when Google/Facebook came along.
As in all investment, no risk no gain ! Scared money make no money !
Always base your investment profits in BTC (unless a new coin takes over dominance as base cyrpto currency) Do not base your profit on USDT unless you trade only with USDT and cashes out in USDT.
Security
Ensure you have 2FA (easiest would be Google Authentication app on Playstore / Appstore ) enabled on all Exchanges as well as your Email. Use a secure phone, tablet, laptop or desktop when trading or accessing your wallets. i.e. no cracked software or root. Have a backup of your 2FA codes or add to 2 devices for contingency. If you trade a lot and don't want to keep your cryptos in offline, then keep them on separate exchanges to minimize risk where possible.
- Store your long term holdings on hardware wallets (like Ledger Nano S or the likes) / offline paper wallets. Make sure you have backup hardware wallets or duplicated and stored offline paper wallets safely.
Mining
Don't be over optimistic in ROI. 6-9 months ROI is a more realistic ROI. When you base it on 2-4 months, it is typically because the price of the coin is peaking at the time. When price is peaking, everyone jumps in and difficulty increases or profit taking occurs in price.
GPUs like Nvidia 1070 offer much more flexibility and performance as it is good for more mining algorithms compared to AMD RX cards.
Dedicated or specialist ASIC miners typically can only mine 1 algorithm but maybe require less maintenance or monitoring. They still need monitoring and maintenance due to hang, faulty parts and ceaning. They can be hot and noisy make your home uncomfortable unless you position them strategically and exhaust hot air. GPU card miners typically are less noisy as their fans are designed to be quieter than ASIC miners. Ensure you have adequate air flow or air conditioning and use high quality wiring.
Electricity cost will cost you around 10-15% of your revenue in general.
You will need to also decide if you are technical enough to manage. Mining can be very profitable after the ROI period. But you also need to consider if you will make more if you just invested/ traded with the money instead of buying mining equipment.
Mining or Proof of Work (PoW) is gradually going to Proof of Stake (PoS) as it is more energy efficient. It may be sometime before we fully move away given the investments people have put into mining equipment as big investors will even fork (create a new version) a coin just to extend the life of their mining investments to allow mining to continue on an alternative coin. This may work in a boom market but I expect it to decline in the longer term as PoS gains popularity. On the other hand, it may be possible to make PoW more efficient if not more useful but may take some time for devs to figure them out.
Buying & Selling Crypto Or Converting to Fiat
If you are looking to buy your first Bitcoin/ETH or crypto, you may consider these options and best feature in my opinion. Once you have them my suggestion is to move them to a proper Crypto exchange. Do note that any exchange that allows direct exchange with fiat normally charges more. So don't be surprise the cost of coin to be higher than that of those crypto only exchanges like Bittrex/Binance. Nevertheless, the buy/sell price is also higher, so as long as you enter and exit using the similar exchange, you should not loose too much for spreads/slippage.
Fast deposit or withdraw using Credit card to purchase BTC, BCH, ETH etc.
https://cex.io/r/0/up102342677/0/
Peer to Peer Escrow Service
https://remitano.com/my?ref=fyl
Malaysian local Bank Deposit & Withdrawal - 3rd Jan 2018 still suspended awaiting update from authorities.
https://www.luno.com/invite/SPXPA
Reserve a Monaco Card (Visa Debit Card so that you can use crypto to load the credit card when it is made available)
https://get.mona.co/IVWT/XRvW1ymo4H
Crypto Exchanges
Exchange but main feature is fast deposit or withdraw using Credit card to purchase BTC, BCH, ETH etc.
https://cex.io/r/0/up102342677/0/
Binance - Has most of the most popular coins. Very large exchange and extremely high liquidity. If you are on Binance by a little BNB coin as they currently give 50% off exchange fees when you pay in BNB. BNB coin has appreciated as Binance kept growing. This has web / pc / mobile interfaces https://www.binance.com/?ref=10033591
Bittrex - Has most crypto coins and one of the biggest exchanges. Fixed 0.25% Trading Fee. Only Web interface
Kucoins - Growing exchange and following Binance concept. KCS coin.
Cryptopia - Really nice and easy to use from NZ. Pretty good coin pairs too.
https://www.cryptopia.co.nz/Register?referrer=feiyau
Decentralized Exchange
This is the future but currently they only provide basic feature compared to traditional exchanges but they are meant for you to not store your crypto on the exchanges.
Etherdelta - Decentralized exchange. Slow but got some of the newer coins as they don't have string listing and don't charge fees. Note it is more complicated if you are new to Crypto. Use Metamask wallet through Chrome Browser extension. Make sure don't deposit all ETH into Etherdelta and always have enough ETH left in wallet to perform any transactions since all need ETH as gas. Once you made your purchase, withdraw.
Bancor Network - Decentralized exchange. Much easier to use but less control about your buy or sell price. Use Metamask wallet through Chrome Browser extension. Make sure always have enough ETH left in wallet to perform any transactions since all need ETH as gas. Once you buy the tokens are in your Metamask wallet. Cool.
Some people I follow and learn from
Charles Hoskinson - https://twitter.com/IOHK_Charles?s=09
Andreas M. Antonopoulos -https://twitter.com/aantonop?s=09
Haejin Elliot Waves guru - https://twitter.com/Haejin_Crypto
Boss of Bitcoin - https://www.youtube.com/channel/UC-f5nPBEDyUBZz_jOPBwAfQ
Datadash - https://www.youtube.com/channel/UCCatR7nWbYrkVXdxXb4cGXw
Boxmining - https://www.youtube.com/channel/UCxODjeUwZHk3p-7TU-IsDOA
Cryptobud - https://www.youtube.com/channel/UCAEktd4wejD_N4aPyDPD3zw
Ivan on Tech - https://www.youtube.com/user/LiljeqvistIvan
Projects/Coins I am currently invested
ICON - ICX
NEO - NEO
Cardano - ADA
COBINHOOD - COB Upcoming Zero fees exchange
KIN/TRX - KIN/TRX Pure speculation
Do feel free to leave comments or questions and I will be happy to respond.
If you are looking for an exchange to start with, I would recommend Binance/Bittrex and would really appreciate your support by registering using this referral link https://www.binance.com/?ref=10033591 if you would like to open a Binance account.
Last and most importantly as I was recently reminded, dont forget your family life. Crypto is a 24x7 business and it never stops for anyone. So it can suck your life away if you are not careful.
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