Yes, you heard it right. I'm not going to tell you a success story of how to navigate in the world of crypto currency. In stead I'm going to tell you a story about a newb who just joined the game last week and made lots of mistakes from the getgo. To let you benefit fom my blunders or a least give you a bit of a chuckle.
Hello all. My name is Richard and I just started trading about a week ago. How come? How did I suddenly discover this new world? Sure, I had heard of Bitcoins before. But I never really bothered to look into the subject. Just another fad that would die out eventually. For years I just turned a deaf ear every time bitcoin crossed my path. But last Thursday, I got hooked after all. During lunch, I was talking to a good colleague of mine. We talked about mortgages and saving money to make the downpayments, and how it takes so darn long to even put a dent in it. And then the subject was raised. My colleague started telling me about the world of altcoins and how easy it was to start trading. Just make an account on Poloniex, buy some bitcoins from a provider and let them be sent to the wallet address of your account. Easy peasy. He even told me a story of some friend who made more then 500k in half a year this way.
Obviously, I was intreagued. Was it really that easy? Was this one of those lifehacks that people where always talking about? I'm usually not one to follow the masses. I have no Facebook account, and only used Twitter to follow players from my favourite football club. So it would not really be like me, to dive into this new world I knew virtually nothing about. But as a child, stocks and currency trading always intreagued me. In the Netherlands, we have something called Teletext. It comes with TV channels and gives you a bunch of information about progamming, the news, the weather, sports results and so on. But there's also a spot for financials. My interest in the subject was rekindled and decided to just give it a go. To see what all the fuss was about. Just 100 euro's I would spend though, it had to remain fun, not become a source of stress and anguish.
The first mistake I made, was to not be patient. I did not check the historic price of bitcoin before I stepped in. Which resulted in me buying my bitcoins at the price of around 2750 dollars a coin. One look at the candle chart of bitcoin will tell you that this was exactly the wrong time, as it is now down to about 2250. But i didn't stop there. I was so excited to jump in, that I totally forgot to do my research first. Get to know the market, the charts, the way media and the internet influence the behaviour of the stocks. So what do you think my first buy was? Exactly, a hype coin. Don't get me wrong, Digibyte seems to have a solid business plan and in the future they might be able to reach a desent price level. But the news of the Citibank conference blew it way out of proportion. And silly me stepped in, right when the hype was at its peak. Eventually resulting in a loss of 550 satoshi per coin. So.... Not a great start.
So what now? I just made a rookie mistake. That cannot happen again! I must prevent this! I must step into the hype earlier, when it's still on the way up. Hey, wait a minute, that Bitshares stock is rising petty fast. This is my chance, I'm in now! Buy in at 9400 satoshi.. go go go.. and then it stagnated. Just my luck. But hey, my colleague told me that patience is a big part of the game, so I decided to just see where the ride would take me. And what do you know, it started rising again. And it kept rising, all the way to 17.500 satoshi. Then it started to drop again. I was not going to wait to see my profit melt like snow before my eyes, so I stepped out at 16.600 satoshi. A profit of 70 dollars. I had made back the money I lost on Digibyte, and then some.
But hey, wait! The stock had dropped to 15.500 but started to climb rapidly again. Let's jump back on the train, this baby is going all the way to the moon! So there I went, getting back in at 16.000 satoshi. Only to find that a few hours later, the stock had dropped back to about 14.000 satoshi. FOMO had kicked my ass. So I decided to be patient again. But the stock did not come up again. In stead, it fell back to 10.500 satoshi. Luckily for me a Chinese pump and dump brought the price back up, and I decided to cut my losses at 13.225 satoshi, which proved to be a fairly good decision. I had lost a significant amount of my earlier winnings, but eventually still managed to make a profit of about 3600 satoshi, from the point where I stepped in initially. But I was back at square one again, back at the amount I started with. Not more, not less.
All the exitement and frustration had cost me a lot of energy, and I decided to take a day of from the market. I just held bitcoins and spent the day studying on youtube and a lot of fora. That's how I found Steemit and some good educational channels. At the end of the day, this was last monday, I checked Poloniex before going to bed just to see how things had gone. I was amazed to find that the Chinese pumped and dumped Bitshares for the second day in a row. Wait a minute, are they doing this daily!? I need to profit from that! So I waited for the stock to come down post dump, and went ahead and bought in at 13.400 satoshi. And of course, you're already guessing it, there was no pump and dump on tuesday. Neither on wednesday. So that brings me to the present, where I am desperately hoping for it to one day come back above the 13.4k mark again. And like the devil is playing with it, just as I am writing this, it has.. I just got out at about 13.200 satoshi. With my luck, I stepped out too soon, but at least I kept my loss at a minimum and am yet again almost back at the amount I started off with. So I lost just a little, but gained (relatively) a lot of knowlegde and experience. Let's just call it learning money.
So to sum up, my lessons learned:
Only buy new bitcoins with dollars or euro's, when it's stock is at a low point. It's a fairly stable coin, so when it's in a slump, it will eventually come back up again.
Don't just jump in, read up. Know your coin, what it represents, whom its competitors are.
Don't buy in to hype, at least, not a day before the actual event. Cause when the event is finally there, that's usually the starting point for a big dump.
Set a goal for yourself and step out of the stock when you reached it. Don't try to milk a rapid rise for all it's worth, your greed will get the best of you and you'll end up hitting yourself in the head.
When you missed a big part of a rapid rise, don't get in hoping it's not done rising yet. Be like Elsa from Frozen and let it go. There will be other opportunities. If you get in to late, chances are you'll end up like me, wishing and praying for the stock to get back up to the price you stepped in on for days.
So learn from me or laugh at me. I'm just thankfull for this experience and wanted to share it with you guys. Maybe it'll be helpfull for other starters out there, to not step in the pitfalls of winging it. Read up, spend some time and effort and discuss with others. It will increase you're chances of being succesfull in this fast, wacky but incredible fun world of crypto currency trading. Don't miss out, and don't be afraid. Be aware of hype, FOMO and feardumps and you'll do just fine. Please let me know if you liked my first post in the comment section below and want to see more of these from me in the future :-)
Picture sources:
http://cryptomining-blog.com
https://uquid.com
https://ak9.picdn.net/shutterstock
https://pbs.twimg.com/media
http://allcoinsnews.com/wp-content
https://balletofwords.files.wordpress.com
http://www.rlretraining.com/wp-content