Lessons to learn from a Newbie trading Crypto
Like many others, I read about Bitcoin in 2014 but for lack of knowledge on where to begin investing, I did not. Robinhood was new at the time and I was pretty unaware about ways of making money as a young adult.
I do not want others to repeat the same mistakes I did and hence I am putting all I know about crypto out there for you. There are a few categories of news about cryptocurrency and I include all of them below:
- The news seems to lag the actual price of the coin. For example: If Bitcoin drops 10%, we know about it only after the fact.Technical analysis and trading patterns are the main content of the news articles.
- All other prediction news about the future of cryptocurrency is actually speculation.There is either an article that says all crypto will go to zero or the currencies are going to reach a million dollars upwards. At the time of writing this, Bitcoin stands at $43,793.29.
- Celebrity views about crypto show up once in a while and the crowd follows suit
- New features on the blockchain that is related to a particular coin.
All these tell us that we do not know enough about cryopto movements how a particular news will impact the price of a coin. There is not enough history. There is no regulation. I also made my share of mistakes.
a) Bought Ethereum for $200 and sold it for $210 because the price dropped to $160 in between. I thought net neutral is better than a loss and sold it as soon as it reached $210. Now the coin is worth $3000 upwards. Basically, I was panic selling.
b)When my recommended news feed from Google was filled with news of rising crypto, I bought the coins at peak value. Almost all of them. ETH, LTC, ETC, DOGE, BITCOIN. Again, I was over-optimistic and gave in to the speculation.
c)I tried to mine crypto only to realize that it is very expensive and may not be worth my time or money.
d)Companies like Celsius today are paying interest rates on cryptocurrency loaned from your wallet for 1,5,20 years. The interest rate from such effort was higher than that from CD rates, but when I wanted to switch my coins from Robinhood which is currently at -5% growth all time (one year), I read that one is not allowed to transfer the coins to a wallet. You could only sell and re-purchase again on a different platform.
e)The prices of almost all the major cryptos follow Bitcoin.
I realized I needed to do my own research before investing in crypto.The safest thing to do is
Invest only as much as you are willing to lose and
Do not check the prices daily.
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