I have been a learner at the feet of the cryptocurrency market for 3 years now.
In that time, I have doubled my account over 3 times, and blown my account at least once.(Spoiler: I've blown it more than once)
In this post, I want to curate a list of things that I have learnt on this journey. These things have enabled me to turn my starting capital of a measly $500 into much, much more than that today.
Oh, and before you ask, I have never withdrawn any money from my crypto account. I just keep funneling money in and multiplying it. I have done a test withdrawal with Coinbase however (I didn't trust them then. I do now) just to see if it works. And sure enough,it does.
So without any more further ado, here's all I've learnt, summarised into three bullet points.
- You can't win them all: Here's a fun story. Early in my trading days, I created what I called the "awesome" trading strategy. It was a stupid name, I know. But that strategy was my greatest invention up to that point. I had made my first 50 trades in the crypto market in just 23 days, and I hadn't lost any one of them. Any.Single.One. I won every one of those trades using that strategy. That got me thinking: Could I be the God of this stuff? Of course, my next trade proved me wrong, and I blew through half of my account with one wrong move. Safe to say I didn't feel like a God for about a month. The point is that you can never win all your trades. Most newbies come into the market thinking that they can and will win all their trades. They've been practicing, and they know all the ropes. So it's not that hard right? Wrong! All newbies start out like this. And all newbies will always start out like this. And while it feels great to make a winning streak, always remember that the losses are coming. That's just how the market works. You can't be perfect.
- You can make big profits risking small amounts: Most people believe that you need at least $10000 to get started trading. But the way they think about it is completely off. They believe that if you buy a bitcoin at $10000, and it moves to $10050, you've just made an easy $50 in the space of 1 or 2 hours. But I look at it this way: You're risking 10000 dollars to make just 50. Your risk to reward is negative, and should you lose that trade, not only would you have lost your $50 profit dreams, you'd also lose more than the position you put in, and you'd probably lose your mind, because you'd think trading isn't for you. Instead of risking $10000 to make $50, it would be nice to risk $100 to make $50. That's a much lower risk to reward, and losing $100 will make you cry for maybe a day, while losing $10000 would make you cry for more than a year. Be smart.
- Lastly, I learnt that the market is constantly against you. No matter how sweet things look once you enter a trade, know that the forces of demand and supply are usually against you. Demand and supply was stable, but YOU offset the balance with your trade. There will be consequences, indicated either by a move up or down. This is the market's way if accomodating you. Some try to weather this storm by engaging in technical analysis. Sure, TA gives you an edge over the market sometimes, but that doesn't mean you'd be right all the time. Always be calm and patient, and remember also that mindset is everything. You can't have a losers mindset and be a winner.
Thanks for reading!