RE: The first of what will become many Q & A sessions for all the Steemians who wish to become more knowledgeable about cryptocurrency!

[alexanderrr]

Re:

1. Thank you for those links. I’ve been drinking from the fire hose that is Investopedia a bunch lately, and trying to retain what I can. But with so much information, sometimes I don’t know what I should be reading. I’ll give all of those articles a proper read-through very soon, but even at a quick glance they’re helping to clarify a lot.
2. “The rule of cryptocurrency is if you don’t control the private keys, you don’t own it” - I wish this were pasted all over every “Beginner’s Guide to Cryptocurrency” article out there, because I’ve never seen this put so simply. That said, I’ve been regarding exchanges - and everything else when it comes to crypto - with an assumption of risk/possibility of failure, and that extends to withdrawing currency. I’ve read that GDAX is insured (not sure what the specifics of this are, though), and so I’ve been learning on there, but still… I’m going to look into BitShares more, if only to be aware of that option. Otherwise, my thinking has been that if I am at some point holding a sizable amount of coins, then I’ll go the hardware route, or simply do what I need to do so that my coins are safe as can be. As far as just playing around with smaller amounts, I’m still going to establish some best practices for myself so that I’m not keeping coins in riskier places unnecessarily.
3. What you’ve said here is consistent with what I’ve been thinking, or at least have been wondering about. That is, if my overall opinion is that, for example, BTC is going to go up long term, then I can simply treat it like I might treat USD (as in, not worry too much about its immediate value) and trade away, and try to increase my position in BTC, or whatever currency/currencies.

I’ve been telling myself that if I’m going to actively trade in any volume, I need to make “Calm and Patience” my mantra. Luckily, I don’t think I’m inclined to panic sell or panic buy, because I try to keep a macro view on things. If anything, if I see something crashing, I perk up, wondering if people are being irrational. I’m much more interested in gaining some insight on why things happen as opposed to what I should do immediately because “oh no what’s happening?!” Haha. So with that, what I want to become better at is informing myself about different coins, their proposed use cases, the teams behind them, the community behind them, etc. I’m obviously not some trading wiz, so it seems to me that establishing an informed position on a coin before trading it is a good start. This way I can err on the side of “be fearful when others are greedy, and be greedy when others are fearful.”
Unfortunately I’m not so great when it comes to the mathematical side of things, but of course it’s a big part of investing, trading, and just economics, so I’m trying to improve where I can. It is frustrating, because I wish I knew enough to take advantage of the markets, but, you know, gotta do what you can.
If it makes any sense, I almost consider the money I’ve put into crypto as already gone. I don’t mean that I intend to lose it, or that I have a negative attitude. I just make sure that I can 100% afford to say goodbye to what I’ve put in upfront, so that from there, any return is a nice little win, and I can go about trades with no stress. I’m playing with very small amounts/peanuts for now.

Sorry to have been longwinded here - I just wanted to give a proper response to the advice you’ve offered. And with that, thank you for the help! I’m going to go back to quietly learning this stuff, but hopefully if you do another one of these posts I’ll have a couple of good questions at the ready.

p.s. Thanks for the heads up on Poloniex!

Comments

[ashaman]

I’ve been telling myself that if I’m going to actively trade in any volume, I need to make “Calm and Patience” my mantra. Luckily, I don’t think I’m inclined to panic sell or panic buy, because I try to keep a macro view on things.

The importance of this is absolutely immense, I'm not sure how I can stress it enough. You're already off to a better start than most who first first try their hand at trading with crypto - better off than I was, I had to learn those things the hard way. If you're familiar with the fundamentals, you can remind yourself that they are unchanged despite short term fluctuations.

1. While you're at it, read up on trendlines and common chart patterns. Also, stochRSI on 4h should be one of your best friends.
2. I've read that one so many times - in various cryptocurrency communities on reddit. I am shocked at the implication that you haven't heard that particular mantra before.
3. You have a good head on your shoulders. Personally, I'm not nearly as long on BTC 4 years ago. It has a first mover advantage, but has spent the last two years pissing it away. It has a powerful network effect, but not so powerful it cannot be displaced. MySpace also had a first mover advantage and network effect. When is the last time you've heard it mentioned, or actually used it? Bitcoin is showing that the proof of work consensus mechanism can can be make a chain too big and unwieldy to upgrade itself, even when the need is dire. Bitcoin maximalists will say that this is a good thing, because the consensus rules should be extraordinarily difficult to alter - time will tell. I think stakeholder voting is far more agile when it comes to implementing critical upgrades in the event that utility is being eroded.

Hairless monkeys (homo sapiens) are largely irrational. Markets dominated by human traders will be as well. Even trading bots designed by us will reflect that quality - at least until we create a true AI.
For someone new to this, you are possibly going about this in exactly all the right ways. I am rather shocked to hear such a levelheaded strategy from someone who doesn't have experience in stock/commodity/forex markets. Pay attention to chart patterns (including the order of different color candles on past moves. Lower-than 1h candles can be indicative of very short term moves, but I wouldn't try to work those unless the spread is very small - a rarity in these markets). And remember, TA is not infallible. and becomes less reliable the further into the future you make projections. Thinks like unexpected significant news will usually trump it.

[alexanderrr]

I’m really glad to hear you don’t think I’m flying off the handle with my approach so far. I mean, like I said, I’m playing with peanuts, but still, losing any money (barring maybe $2 in fees while starting to learn and place orders, this I may be guilty of) isn’t good. When it comes to concepts, I have a pretty easy time staying balanced - I just perpetually assume I know nothing. When it comes to actions, well, I’m more afraid I’m going to make some stupid, anxious, simple math mistake when placing an order more than I fear I’m going panic my way into a bad position.

1. I feel like I have some good homework to do. ‘Stochastic’ is one of those words that excites me, because I’d otherwise assume that’s territory only for mathematicians (or, well, traders, quants, data scientists, etc.), but I like sticking my head into things I feel like I have no business sticking my head into, haha.
2. As I do bits of beginner’s reading, sometimes I feel like either a) people are bad at explaining things/teaching (understandable - not an easy thing to do), or b) people are just trying to fuel the hype, and get more people to jump in, make impulse decisions, and make the markets even more emotionally driven.
3. I hesitate to give any take on this, because I still know next to nothing, but the general vibe I’ve been getting is that BTC has been taking their position for granted. At least, I come at it from a very average/ignorant level, which is to say that I think, “here’s this cryptocurrency that’s managed to get into the minds and mouths of people outside of the very technical, very intimidating world it was born of; here’s this coin that’s seen some mainstream adoption; but instead of carefully fanning the very delicate flame that is public awareness and sorting out the underlying issues with some grace, they’re just…bickering. Bickering aggressively in plain view.” I know it’s not nearly that simple (hence the ‘ignorant’ take), but it just seems like BTC hasn’t exactly been playing their cards optimally, all things considered.

I know I can only do so much, but I do intend to learn and (hopefully) assimilate things in a useful way. So it’s encouraging to hear you think I’m going about (or at least thinking about) all of this in a levelheaded way. And I’m very grateful, because you’ve given me some actionable advice as far as what to be cognisant of and what to look further into. Really appreciate it.

[judym]

Thanks so much to you both for the awesome comments and thread here. So much to learn and so many exceptional opportunities. I really appreciate your insights and look forward to more as you share more information. Hope you're having an amazing weekend!

[alexanderrr]

My pleasure! Asking questions is easy, and I feel fortunate to encounter people who are willing to take the time to offer advice and thoughts. Hope you're having a great weekend too!