I have always said that day trading is the fastest way to lose or grow your money in crypto.
The reason is that the cryptocurrency market is extremely volatile. And it's not hard to see a coin moving in either direction with extreme price swings.
But should you get into crypto trading and try to make all the money we hear that traders make?
In this post, I will give you reasons why I think you should rethink venturing into day trading.
My experience with trading
When I started with crypto, the first thing I did after buying my first $100 Bitcoin was to invest in a Ponzi scheme and begin day-trading.
I was using Poloniex then, and making about $10 every day for about a week and some days.
Simply by buying low, and selling high. I was feeling like a champion and thinking in my head that I was going to be rich real soon.
How was I making that money daily with zero trading experience and skills? And only a basic understanding of the market?
Because it was 2017, and everything was pumping and I was "buying low and selling high".
My profit wasn't as a result of some good trading strategy I was using or that I knew what I was doing.
I was just riding the wave at the time and it felt good.
It wasn't long before I discovered that day-trading wasn't for a newbie like me.
As I started losing money faster than the sweat in my body under the hot sun.
And that was not all. I discovered I hardly have time for anything else.
I was less focused and nearly permanently glued to my PC, trying to catch the next trading opportunity.
Or to my phone reading up on market news and event, studying trading manuals and monitoring prices.
It was the first thing I check when I wake up and the last thing before going to bed
It wasn't long until I started paying for it with:
Consistent losses as the market took a turn.
Poor and sometimes total lack of sleep.
Health challenges etc.
Why did all these happen to me? Because I was totally clueless about what I was doing.
I lacked any form of prior trading knowledge or experience.
Had zero mentoring except for reading internet resources and watching other clueless YouTubers.
And I was in it for the same reason others had failed, are filing, and will continue to fail - to get rich quick.
What's more, I wasn't following any trading strategy or plan. Just some tiny little fish flexing in an ocean full of merciless whales.
That was me right? yeah! And you are different.
You're of a different breed who is not as dumb and buggy headed as me.
3 reasons why you should avoid day trading
But before you ride off with that, you may want to know that:
1. Over 90% of all traders lose money
Crypto trading is a zero-sum game. For you to win, someone else must lose.
And it's also a well-known fact that more than 90% of all traders lose money.
Come to think of it. Trading is like a war where you hardly go into it and come out the same.
You either win or lose and we know that over 90% of all traders lose money.
In a field where there're trained professionals with years of experience and skills to battle it out daily.
Institutional investors and even banks use experts and lots of money to play the market.
These guys perform deep market research and develop tested and working trading strategies.
And all you brought to take their money away from them is:
Just your desire to get rich quick.
A total lack of experience or trading skills
Your last food money which you hope to double asap.
You must be kidding me.
As a day trader, you'll notice that you spend most of your time in front of your system. Watching and monitoring your trades, analyzing the market or doing research.
In the end, your real life will begin to suffer. You start taking less care of yourself and the people that are important in your life.
Before you know it, you're losing too much sleep and your health slowly begins to deteriorate.
You become less focused and anxious as you watch the market take everything from you. Your money, your health, and maybe even your relationships.
3. The market is irrational and manipulated
The cryptocurrency market is extremely irrational and highly manipulated.
So much so that even with all the right tools, trading setup and strategy you may still lose money. As people invest mostly in hypes rather than fundamentals.
And whales with enough capital can pump or dump a coin at will regardless of what your indicator tells you.
Your strategy and charting abilities are useless when whales start playing their games.
And you will have to just ride with their wave or watch from the sideline.
Otherwise, they'll eat you up.
And because most coins are under-capitalized, even a few million dollars can have significant price impact.
Now, this wasn't intended to scare you away from considering trading. But to make you realise what you're getting into before you get started.
Trading can be addictive like gambling.
And it's easy to think you're going to make back all your losses or make a lot of money with it.
But you're more likely to lose it all than recovering your losses or making millions.
There're no crypto millionaires that made it through trading. But we have crypto billionaires who made it through HODLing the right coins.
That to me shows trading is NOT the way to riches in crypto.
Because if it were, those "experts" on YouTube and Twitter would have been millionaires already.
But if you know what you're doing, why not. Go for it.
If you're good with technical analysis and can read and analyze charts.
You have extensive knowledge and understanding of the crypto market and its dynamics.
You have developed a working trading strategy
You can afford to lose your money without going broke
You can effectively manage your time so that trading doesn't affect your health and relationship.
But if the above doesn't describe you, then you need to pause and rethink.
Do you think day trading is for you? Are you a day trader? What's been your experience? Share with us in the comments section below.