Some advice for new crypto traders!
I'm not in any way qualified to advise people on investing in crypto, but I have been doing it for more than a year now.
I lost a fair amount as BTC crashed, and am now clawing my way back back slowly but surely.
Here is how I lost, and how I am recovering.
Note: This is just unbiased information for those people starting to trade, I hope it will be of some help to them.
First, what did I do wrong over the last year?
1. overtrading I felt I had to trade whenever I looked at tradingview. Especially after incurring a loss, I would immediately look for a trade to make myself feel better.
2. confirmation bias I am an optimist by nature, and confirmation bias meant I looked for charts that told me the market was going up.
3. emotional trading including the above, but also taking more risks after a successful trade
4. impatience This is a killer. I just kept trading and trading, whittling away at my diminishing stack, trying to catch the next mooning altcoin.
My advice to myself, a year ago...
1. I Never FOMO. the stupidest thing to do is see a few green bars in a row, break into a fever and immediately buy. More than likely it will immediately go down again, and you'll be left holding the coins. Beware of sudden spikes, they often just as suddenly drop again, especially if there is nothing to support a sudden gain. This can often be a deliberate tactic by some traders to get your money in the pot.
2. Read a lot of peoples TA and compare them against each other to see if there is a consensus. check out overbought/oversold/divergence and the other such common terms you see on peoples charts, and make sure you understand them.
3. Always use a stoploss, but read up on how to determine where to put it. they often get triggered on a brief dip, just before the rise that you were waiting for
4. Know about Risk/Reward
5. Don't ever feel you have to trade. If you are not sure, don't do it. wait until you're confident. Personally I do this by reading peoples TA with a critical mind, and doing my own analysis.
6. You may want to keep your money in USDT while not trading (at least if you're using binance). Although USDT got plenty of bad press and scepticism it has saved me from some heavy losses as the crypto market was falling. That's not to say the bad press was not justified, just that in my case it has been useful.
7. Consider the money you have invested in crypto as GONE already. This helps to emotionally detach from it, in my experience. It stands to reason then that you
8. Only put in what you are prepared to lose, i.e. disposable income.
9. Find some good people to follow on tradingview. I have my favourites, and though everyone is wrong from time to time, some people have more humility and willingness to teach, and I'm grateful to them for that.
10. Be wary of other users hidden motives. There are those who have personal reasons to want users to buy.
11. Avoid anyone who harps on about how great they are - though that goes for life in general.
12. Approach ALL articles, resources, advice on crypto trading with scepticism. Most of them are clickbait in my experience, and you need to use your own judgement to weigh everything up.
13. Understand that YOU WILL NOT GET RICH QUICK TRADING CRYPTO. More likely your value will dribble away slowly while you figure out how to plug the leak, by formulating your own set of rules.
14. Go out and get some fresh air.
I lost a fair amount as BTC crashed, and am now clawing my way back back slowly but surely.
Here is how I lost, and how I am recovering.
Note: This is just unbiased information for those people starting to trade, I hope it will be of some help to them.
First, what did I do wrong over the last year?
1. overtrading I felt I had to trade whenever I looked at tradingview. Especially after incurring a loss, I would immediately look for a trade to make myself feel better.
2. confirmation bias I am an optimist by nature, and confirmation bias meant I looked for charts that told me the market was going up.
3. emotional trading including the above, but also taking more risks after a successful trade
4. impatience This is a killer. I just kept trading and trading, whittling away at my diminishing stack, trying to catch the next mooning altcoin.
My advice to myself, a year ago...
1. I Never FOMO. the stupidest thing to do is see a few green bars in a row, break into a fever and immediately buy. More than likely it will immediately go down again, and you'll be left holding the coins. Beware of sudden spikes, they often just as suddenly drop again, especially if there is nothing to support a sudden gain. This can often be a deliberate tactic by some traders to get your money in the pot.
2. Read a lot of peoples TA and compare them against each other to see if there is a consensus. check out overbought/oversold/divergence and the other such common terms you see on peoples charts, and make sure you understand them.
3. Always use a stoploss, but read up on how to determine where to put it. they often get triggered on a brief dip, just before the rise that you were waiting for
4. Know about Risk/Reward
5. Don't ever feel you have to trade. If you are not sure, don't do it. wait until you're confident. Personally I do this by reading peoples TA with a critical mind, and doing my own analysis.
6. You may want to keep your money in USDT while not trading (at least if you're using binance). Although USDT got plenty of bad press and scepticism it has saved me from some heavy losses as the crypto market was falling. That's not to say the bad press was not justified, just that in my case it has been useful.
7. Consider the money you have invested in crypto as GONE already. This helps to emotionally detach from it, in my experience. It stands to reason then that you
8. Only put in what you are prepared to lose, i.e. disposable income.
9. Find some good people to follow on tradingview. I have my favourites, and though everyone is wrong from time to time, some people have more humility and willingness to teach, and I'm grateful to them for that.
10. Be wary of other users hidden motives. There are those who have personal reasons to want users to buy.
11. Avoid anyone who harps on about how great they are - though that goes for life in general.
12. Approach ALL articles, resources, advice on crypto trading with scepticism. Most of them are clickbait in my experience, and you need to use your own judgement to weigh everything up.
13. Understand that YOU WILL NOT GET RICH QUICK TRADING CRYPTO. More likely your value will dribble away slowly while you figure out how to plug the leak, by formulating your own set of rules.
14. Go out and get some fresh air.
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