No, the successful trader is not me. I’ve gotten lucky a few times and I’m still refining and trying out strategies; on the other hand, I’m part of communities of people who trade on a daily basis to grow their portfolios, and while some of the results can be attributed to luck, a majority of it is based on fundamentals, good habits, and experience.
One of those groups I’ve joined recently is Pure Investments, where I met Miles. Pure Investments is a Discord channel where people interested in trading come to chat about cryptocurrency, market trends, the latest news, and other off-topic interests. I’ve been part of their community since late 2017, and have learned a lot from not just the analysts on the team, but also from the community as a whole.
Please note that Pure Investments, nor any other groups I participate in or actively contribute to, are not pump-and-dump groups, they are legitimate communities of cryptocurrency enthusiasts and traders. I WOULD NEVER join or give any pump-and-dump groups the time of day, nor would I ever recommend standing within 50 meters of one unless you like the smell of your own burning flesh. The reasons why are numerous and off-topic. You can DM me on Twitter or comment below if you want more detail.
The Result of Good Habits
Miles is the co-founder of Pure Investments. In May 2017, he started off by playing with $1,000, which he accumulated through saving 10% of his paychecks for a while. Today, he is at $46,000; i.e., he grew his portfolio by 46x in less than a year.
Similarly, after starting Pure Investments back in September 2017, Miles got one of his first community members, who goes by the pseudonym SP on the Discord channel. When SP started, he put in $40,000. By January 2018, he had over $1 million (today it’s ~$800k due to the recent Bitcoin crash).
While markets like cryptocurrency are extremely volatile and all investors are subject to its price fluctuation including Miles, SP, myself, and you, good habits will help mitigate the losses and maximize profits.
Nine Rules of Crypto Trading
1.Only invest what you can lose. During the recent crash in January 2018, hobby-investors got burned. Reports of frustration and losses came at the cost of broken monitors, smashed laptops, and heavy monetary losses. While the rules are in more particular order of importance, it’s safe to assume that this is the most important rule, the rule to rule the rules. As soon as your money is converted into cryptocurrency, consider it lost forever. There is absolutely no guarantee you can get it back. Losses don’t simply come from dips in the market; extraordinary factors such as hacks, bugs, and government regulation can mean you’ll never see any of your money again. If you are investing money you can’t afford to lose, you need to take a step back and re-evaluate your current financial situation, because what you’re about to do is an act of desperation. This includes: using credit cards, taking out mortgages, applying for loans, or selling everything and traveling the world (as glamorous as that sounds).
2.Always pay attention to Bitcoin. Most altcoins (every cryptocurrency except Bitcoin) are pegged more closely to Bitcoin than Asian currencies were to the USD during the Asian Financial Crisis. If Bitcoin price pump drastically, altcoins price can go down as people try to exit altcoins to ride the BTC profits; inversely, if Bitcoin prices dump drastically, altcoin prices can go down, too, as people exit altcoins to exchange back into fiat. The best times for altcoin growth appear when Bitcoin shows organic growth or decline, or remains stagnant in price.
3.Never put all your eggs in one basket. Diversify. While the potential to earn more is increased with the amount of money you invest into a coin, the potential to lose more is also magnified. Another way to think about it is to look at the cryptocurrency market as a whole; if you believe that this is just the beginning, then more than likely the entire market cap of cryptocurrencies will increase. What are the chances that this market cap increase will be entirely driven by one coin vs. being driven by many coins? The best way to safely capture the overall growth of cryptocurrency is to diversify and reap the benefits of growth from multiple coins. Also, fun fact — Between January 2016 and January 2018, Corgicoin has increased by 60,000x, and Verge has increased by 13,000x. During the same period, Bitcoin has increased by 34x. While you would have gotten impressive gains from Bitcoin, expanding into other coins could have landed you potentially larger ones.
4.Don’t be greedy. No one ever lost money taking a profit. As a coin begins to grow, the greed inside us grows along with it. If a coin increases by 30%, why not consider taking profit? Even if goals are set to 40% or 50%, you should at least pull out some of the profit on the way up in case a coin doesn’t reach the goal. If you wait too long or try to get out at a higher point, you risk losing profit you already earned or even turning that profit into a loss. Get into the habit of taking profits and scouting for re-entry if you want to continue reaping potential profits.
5.Don’t invest blindy. There are people in this world who would sell a blind person a pair of glasses if they could make money. Those same people play in the cryptocurrency markets and use every opportunity to exploit less-informed investors. They’ll tell you what to buy or claim certain coins will moon, just to increase the prices so they can exit. Due to the highly speculative nature of the cryptocurrency markets today, a good investor will always do his or her own research in order to take full responsibility for the potential investment outcome. Information coming from even the best investor is, at best, great information, but never a promise, so you can still get burned.
6.Don’t FOMO. This is a spot that people most frequently lose money on. A dash of manipulation, two tablespoons of media hype, a cup of CME and CBOE announcements, and a generous handful of FOMO drove Bitcoin prices from $10,000 to $20,000 in December. Since that time, Bitcoin fell to a low of $9,000 and is currently sitting at around $11,000. It’s easy to look back and say, “if only I waited one month, then I could’ve bought at $9,000 instead of waiting for Bitcoin to hit $20,000 again for me to break even.” But the reality is, the combination of 1) being greedy, 2) investing blindly, and 3) FOMO were likely large contributors to the purchase at an all-time-high. Even in the crazy world of cryptocurrency, if a coin pumps that quickly, it will correct — it’s a matter of time. Speculative pumps are almost always followed by dips. While trying to jump onto a train going full speed sounds like something straight out of a James Bond movie, I’m sure most of us can agree we would probably save some limbs if we just waited for it at the next stop.
7.Categorize your investments and look at the long picture. In the process of your research, you’ll eventually realize you’re coming across a few different categories of coins. For some of them, you believe they have good teams, great vision, amazing publicity and a track record for successful execution. Great! Put these into medium or long-term holds and let them marinate into a delicious tenderloin. When the price dips, don’t even consider panic selling because anything in your medium or long-term portfolio should remain untouched for a set amount of time. BNB is a good example of a coin Miles considers a long hold. Recently, it dipped 20% for a while, and within our community, we witnessed some sell-offs to preserve investments. A week later, it jumped up almost 3x for a period of time.
8.Always learn from your mistakes. Never accept a total loss. Always evaluate the situation and try to figure out why it happened. Take that experience as an asset for your next move, which will be better because you are know more now than you knew before. We all start off as amateurs, and we have all lost money throughout out trading experience. In his first month of trading, Miles went from $1,000 to $300. I’ve lost a lot by selling at losses inspired by fear. No one is perfect, no one wins every single trade. Don’t let the losses discourage you, because the reality is they’re making you better trader if you choose to learn from them.
9.If you are doing any active trading, set stop losses. For any coins not in your medium or long-term holds, always set stop losses. This is important for several reasons — the most obvious is mitigating your losses. But more importantly, you force yourself to decide on a point of acceptable loss, and because you now have a reference point, you are able to measure your effectiveness to keep or adjust for future trades. Sometimes, during a market dip, altcoins can plummet, and stop losses can lead to profitability by automatically selling for fiat that you can use to re-enter at lower prices.
For the bonus point and something more, finish the article here:
https://hackernoon.com/9-rules-of-crypto-trading-that-helped-one-trader-go-from-1k-to-46k-in-less-than-a-year-232689fe5f00
Thanks for Point 7! Yes categorising the coins can really put things into perspective, are you trading and investing in utility tokens? Exchange tokens? Helps when looking at all the different coins that are available. Upvoted!
Thank you for your comment and upvote. Point 7 is a great point for me too. Yes I like to invest into utility projects. I think privacy is important thing. For example XVG, or incoming BTCP are good projects and Binance coin isn't a bad investment at all imo (and of course many other good investments there are).
I'm glad you find the article helpful :)
What would your opinion be on using an fxprime trader to manage my portfolio please domisun?
They offer an average 50% return on investment paid out monthly.
I can't find much information on anyone using fx traders anywhere.
Hello @chopper2017!
If I understand it correctly, you are interested in fx robots (particular one).
I have an experience with them a bit and gotta say there are plenty of scams in the field. I have never lost money on them tho, however don't recommend them as much either.
The problem with them is, naturally, that it's easy for the creator to lure newbies for this, with a few facts like "most of the people loose money on Forex" lol. There are some solid and working robots out there, however the more people use this, the less effective it is. At the end the most money makes the creator on selling it and maybe something even people who were first to this.
IMO the most solid robots would be with some easy code which won't have crazy gains, but they will survive long term, being always functional - imo something based on Volume, I think Volume will always work, cause it shows the big boys in the game and where they make the contracts.
So to conclude this. If you wanna try such thing, say goodbye to the money you invest there and lets see if this is solid. If you wanna really try this, I recommend you take away your deposit when you make 100% profit and continue risk free.
There are many scams in the forex field, keep in mind that.
Personally I wouldn't invest into FX robots, only if I would get recommendation from a friend or someone I trust, or tryin' the shit for fun. :-)
If you have further question, or I got your question wrong, feel free to ask me again. You can provide link of the matter.
Your post had been curated by the @buildawhale & @ipromote team and mentioned here:
https://steemit.com/curation/@buildawhale/buildawhale-curation-digest-01-25-18
Keep up the good work and original content, everyone appreciates it!
Thank you @nicnas! I am glad people find it helpful. :-)
That was honestly a brilliant post, the sad thing i have noticed, is that even if you tell new crypto traders these things, they often don't "get it" until they have been burnt, its like a child being told not to touch fire, they dont learn the lesson until they touch the fire.
And, i throw myself into that camp as well, i was exactly the same, however, content like this is really good to have out there, because as you say, when you have those negative experiences you reflect on them as a trader and become better, and things like this are excellent resources to point people into a better direction.
Great comment man! This is exactly how I feel about it as well. I mean, its like when you wanna learn forex. One side of the matter is that you read up bunch of technical strategies for example but the other is when you go to the market and it ain't working for you and it feels you still kinda missing something. That something is simply the experience...
The other case is however the people who do repeatedly something wrong and don't know what it is, although has some experience from the market already and to these people I believe are these information helpful the most.
Exactly as you say, we are all like these children. We need to be burnt, we need to do these mistakes to remember them, we need to drill anything we wanna be good at.
Thank you @kashmirz for your reply!
You got a 3.73% upvote from @upyou thanks to @domisun!
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You got a 0.99% upvote from @upmewhale courtesy of @domisun!