Preface

This is the beginning of just another ordinary story of a guy that got into cryptocurrencies at the worst time possible, took it in the face, but then started learning. Nothing can replace the experience you get from doing things by yourself, but you can minimize your troubles by learning from others that have already been through it.

If you're just getting into cryptocurrencies, you might find an overwhelming amount of information on the Internet. I decided to write this series in my blog to expose the things I learned so far and hopefully help people make less mistakes than I did :)

This is the first part of at least five posts I have lined up with the story so far. I aim to keep them short and straight to the point, focusing on what I think are the most important things for novices to know about. If you don't care about the story, jump to the "Lessons learned" section below. Hope you enjoy.

Jumping into crypto

(and falling...)

2017 has been a crazy year for cryptocurrencies. Bitcoin went from around $1k dollars in the beginning of the year to $20k dollars at the end of the year. I wasn't into it back then, but I've learned that there were at least 3 peaks during the year, with the last (and biggest) one in December.

I decided to look into it when a friend that doesn't work at tech, asked me about Bitcoin. I've been into tech for a long, long time, so I heard about Bitcoin in the past, actually 3 or 4 years ago. But you only realize it's getting big when an "outsider" knows about it. Where I live people usually follow what happens in the US with some delay. People here were talking about Bitcoin at that time, but not as much as in the US (no taxi drivers asking you to buy Bitcoin).

So I decided to try it out. I just started Googling and reading whatever I could. Wasn't long before I saw prices going up day after day and started getting afraid of missing the opportunity (the famous FOMO). I found a few local exchanges and started buying, little by little.

I believe I bought my first Bitcoin in December 7, when it was worth about $15k dollars. Then kept buying a little more every few days until the end of the month. During that period Bitcoin fluctuated between $15k and $20k, its all time high. If you just look at the charts right now you will easily see how that was the worst possible period to buy.

Why did I do it? FOMO and lack of knowledge, I would say. I had never looked at a chart before. That was my first and biggest mistake. I decided to get into it before knowing enough about it.

I had the luck of getting fast enough into some coins that were not at their all time highs yet at that time. The one that "saved" me was Ripple, my biggest holding during December (other than Bitcoin). I got lucky enough to get into it in time and move it around when it was at higher prices, minimizing my losses.

Notice that more than once I said luck. It was a mixture of luck and lack of luck honestly, but I know it could have been worse. It was worse for a lot of people, it's not uncommon to hear about people that lost 60% to 70% of their initial investment. So never, never count on luck.

The year ended in an uptrend for me. I was feeling good, I was up about 140% in my portfolio (I still cannot believe that happened) and looking forward to another month of incredible growth. "Moon" and "HODL" were the words I would like the most at the time.

Needless to say, things changed a lot as the new year came, but I'll leave that for the next post.

Lessons learned

Do not FOMO into anything, it's always a bad idea. It only works if you get really lucky. And it's hard not FOMO in, I know! But once you do it and later see how bad it was, you learn you shouldn't do it anymore.
Learn to read charts. You don't need to be a TA God, just learn the basics. Knowing that nothing can grow parabolically like Bitcoin was growing last year and never go down is already a great knowledge. Had I known it, I could have waited to buy now and would have more Bitcoin than I currently have.
Take your time to learn the most you can. Learning is the single best investment you can do in life.
Bitcoin will not go away, you will not lose the opportunity of your life if you don't buy in RIGHT NOW. If you think it's almost too late, that means it is too late.
If "normal" people are talking about it, it's already too late. I'm not saying it's too late now, I don't think it is. But at the peak in December 2017, it was. When television channels and mass media are talking about it, it's already too late.
By the way, don't trust these channels. It's not about conspiring against media, it's just a simple thought: everyone has their own interests, and the best interest of a television channel is most likely not your best interest.
Losing opportunities is a lot better than losing money. You will lose opportunities left and right, there's absolutely no way to keep up with everything. Just know that there will always be a new opportunity right around the corner waiting for you to spot it in the future when you're ready for it.
Bitcoin is the cryptocurrency king, all other coins follow it. When it pumped up, other coins followed. When it corrected, all other coins corrected. Pay attention to Bitcoin most of all.
Keep track of everything you do. Don't just do things, do things and track them, put them down in a spreadsheet. Take notes of all coins you buy and the price you payed. Check in the future what you did right and wrong and learn from it. (I have a list of stupid things I did and learned from that I plan on sharing in future posts.)
Spreading your buys (averaging) is a great way to deal with price fluctuations. Traders use it all the time. I unknowingly did it and that helped me lose less. So don't ever go all in or all out, if you do you have high chances having big losses. When you believe it's time to buy, buy little by little, spread your orders across hours, days or even weeks.

Stay tuned for the next posts in this series. Let me know in the comments if they are being useful for you and/or if there's anything else you'd like to learn!

Disclaimer: This is not financial advice, this is for informational and educational purposes only. This is only my opinion, make of it what you wish.

An all too ordinary story of an inexperienced crypto trader (#1)

Preface

Jumping into crypto

Lessons learned