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Stop Trading Crypto!! You’re (probably) no good at it…
7 years ago in #investing by holbein81 (58)
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This is a good warning to those who think they might be able to get rich by day-trading or occasional trading. I've traded plenty of both stocks and forex, and can honestly say that it's very tricky, very difficult, and not very lucrative.
The best strategy is buy and hold. Along with holding long-term, you can also do what is called "dollar-cost averaging."
That simply means that you buy a certain every week, or every month. For example, if you buy $100 worth of bitcoins every week for a year, the fluctuations in the price will have less effect on how much bitcoin you have at the end of the year. If you wait until the end of the year, when you have $5200 saved up, you will have missed out on the cheaper bitcoin over the previous 52 weeks.
Conversely, if you buy $100 every week and the price goes down, you end up getting bitcoin at lower and lower prices. And the chances are (particularly with cryptos these days) that the price will soon rebound.
To summarize, STOP day trading. START dollar-cost averaging.
Full Steem Ahead.
Thanks for the comment
I dollar cost average in both stocks and crypto but trade neither
I do sell a lot of put options on a monthly basis. Some may consider this trading, I don’t, as mostly I sell them and they expire worthless a few weeks later - but I do occasionally need to roll them out and/or down
Cheers
I couldn't vote on your post as it was ending too soon, but I will drop a tip! 1.0 here as a way of making it right :) Keep up the great writing buddy!!
Thanks!
I enjoyed writing this one, am thinking up another on a similar theme - can't do beer all the time - or can I?!?
Cheers
Your post had been curated by the @buildawhale team and mentioned here:
https://steemit.com/buildawhale/@buildawhale/buildawhale-curation-digest-11-08-17
You have received a Whaleshare Token upvote (@officialfuzzy) thanks to @akrid.
Keep up the good work and original content, everyone appreciates it!
Why thank you!
Much appreciated - the recognition and also the upvote
Cheers
This is a solid article actually but many won't take this advice. Personally I've done well trading Bitcoin but it's not that hard to trade bitcoin when it constantly goes up lol.
Altcoins on the other hand have lost me a lot, I over diversified and lost track of my trades. I learned i need to keep it simple and just baghold the few projects i believe in knowing the money invested might as well be lost.
Thanks for the comment - I agree that many will carry on regardless - our Group 3 friends.
And that’s fine, it’s not my money they are losing...
I am buying a handful of what I perceive to be quality coins each month
Such an awesome and educative post @holbein81
Thank you- glad you found it useful!
Wait... Wait some more.. then start over waiting.. great stragety.. I like to buy small increments every so often.. but I invest most of my money in Steemit by always powering up when I buy
Me too - I buy a bit each month, from STEEM, BTC, BTS, EOS, IOTA
Am looking at STRATIS at the moment too
I got a friend who's a huge believer in STRATIS..
Absolutely! I have always told people this. If you invest, invest for the long term. Buy and hold. Keep buying if you can. Dollar cost averaging. But hold. Leave the trading to the experts.
I trade sometimes, but my dad is a broker so I have decades of talking to him about it under my belt, as well as welf-study, but even so, I don't do it often, for the exact reasons you mention.
Again, great advice.
It seems so intuitive to me, but equally I can see how easily people get sucked into the allure of trading
Cheers
This has to be the most elaborate post I've come across today. FOMO is responsible for the behavior of those in group 3. That said, it is worthwhile to identify a working strategy and stick to it regardless of what the greater majority is doing. Great post @holbein81.
Thanks for the great comment - it is not often that my posts get called elaborate - probably because most of them are about beer....
Cheers
I may not be good at trading, but I definetly do not have the money to trade :))
Well then I guess it is easy not to lose money trading them
But you could dollar cost average every month with a buy and hold strategy - even if only $10 or $20 it builds up quickly
And when it comes to steemit I think it is more fun when you have a bit of a vote to throw around!!
Cheers
Although it's tempting to get into trading with cryptocurrencies, I try to not get involved because I don't have a good understanding of what's going on. As for the posts on Steem where geometric figures are drawn on top of charts and candles, I have the feeling that most of their authors are clueless about what's going to happen 😁
So, investing in cryptocurrencies is a rather good advice!
Exactly, stick to what you know and understand, and play to your strengths. In general, people don't seem to be aware how bit a strength time and patience is when it comes to investing
Cheers
a great and thought provoking post
I am definitely not a trader of knowledgeable in any way on crypto currencies.
BUt I do love the quality and originality of content on Steemit and the wonderful sense of community so I am investing slowly it and holding for the long terms, if I end up making money from it, for me thats a bonus but not my drive
Me too - am dripping a bit each month into STEEM and a few other coins. If I lose it, so be it - I think the risk reward profile is very positive
Cheers
Yes thats about where i am at as well, there is a risk of course but lets hope it starts to slowly grow soon :)
Brilliant post buddy. Loved reading it. Totally agree with you. Trading is not everyone's cup of tea. One requires expertise and experience to trade cryptos. For common people its best to buy and hold long term. Its a proven fact that very few traders are indeed successful. One wrong call and you loose it all. Upvoted and following u as always.
Regards Nainaz
#thealliance
Hi Nainaz, thanks for the comment/upvote/support - glad you enjoyed the article!
Much less stressful to sit back and hold,
I fully agree - it's nice to be able to sleep at night...
Nice post @holbein81, that's true that a lot of people is losing on this game... I think the point is to blame the investor, and not the game itself ;) Steem on!
Steem on indeed - thanks for the comment!
I used to daytrade strictly bitcoin (through GDAX), and in 2014 I was making money doing so (not that "bitcoin billionaire" money, but between $800- $1,200 a week). I was just a young teenager at the time and didn't have a job, so a thousand a week was great money (still is), however, I learned it was more profitable(and less risk) to run a bitcoin consulting business or work with startups, and individuals looking to invest and willing to pay for my knowledge. My advice to people in group 3 is to consider investing long-term or hire a mentor to help understand what the mind of us daytraders looks like if you are truly determined to make money trading.
Agree - taking the time to learn the ropes would make a huge difference for many
I never have, which is why I don't do it
Cheers
Buy wisely and then hold is great advice. I wrote this article which is targeted to people who feel it is too late to get in and participate in the exploding crypto/blockchain sector. https://steemit.com/cryptocurrency/@motowngold/bitoin-crosses-7000-dollars-what-can-you-do-about-it-some-investing-ideas-including-crypto-related-stocks
Thanks for commenting - I just checked out your post, I hope you are right about BTC - but if you are, then I don't have enough yet!!
Me either then actually, lol. I think in due time, I think it will shock. For now, it is going to have its constant fits and starts and pullbacks, and then rocket higher. I am not really trying to trade these things very much, just to get into the best positions and ride them. 2 of the stocks I mentioned, which is another segment that I think will be explosive, are up nicely today, SSC and BLKCF. The former has a well known chinese Billionaire backing it,Bruno Wu, and the latter, American billionaire JIm Rodgers involved. Exciting times never the less!!
Sounds good! I don’t have time or the technical background to look into and understand these smaller stocks. I tend to buy big established companies that will grow over time and pay me to hold them.
To boost that, I sell put options in a few companies or indices on a monthly basis - this generates an additional approx 20% per year on the value of my whole portfolio
At the moment I am taking a bit of that free income and diversifying it into some crypto
Cheers
Sounds like you have a very solid actual plan. I have sold puts before as well, can be great especially on shares you own that you may sell anyways, no risk at all then.
Yeah, I have been doing it for quite a while now
I keep my portfolio approx 80% in high high quality stocks and the rest in cash
Each month I sell as many puts as I can, using margin on the entire portfolio, but leaving approx 20% on the table in case there is a major event or buying opportunity
I only sell puts in those same highest quality companies, or indices, and I do it as a credit spread to limit the downside - so even in an Enron situation my exposure is significantly reduced
Price stays flat or goes up, the put expires worthless and I keep the option premium
Price goes down a bit, depending on my strike price I am probably still ok and the put expires worthless, I keep the premium
Price goes down a lot I have a whole bunch of rescue options, plus a stock that I like has just got a lot cheaper so I can buy more
I wish I had started 20 years ago...
Thank you for sharing it. You are very right and I've read ti just at the right time.
Thanks for reading and commenting!!
Hah, I know for a fact I'd be terrible at it- I'm much better keeping away from that.
There you go - that puts you in Group 2 - but as someone that never even started - congrats ;-)
Great post man! Thanks for sharing! You are awesome!
Hi Yandot, thanks for passing by and commenting, and for the compliment - hope all good with you
Cheers
Youre welcome my friend! You are amazing
Cheers
I don't trade to get rich.
The common statement that traders lose 90% of the time is relative to Bitcoin buy-and-holders. ("Bitcoin buy and holders" make more money than crypto traders 91% of the time).
I scalp small amounts of my Bitcoin profit when I feel like playing and tinkering, if I see a high-volume alt-coin showing a strong buy-pattern - like Monero has shown all day today.
I don't recommend people do it but I KNOW people WILL so I try to help to educate them on doing it right.
All my trade profit goes back into buying more Bitcoin.
It's my money. I'm well ahead of the game. I'm entertained.
Thanks for the comment - the 90% number, or at least the one I was referring to, is actually nothing specific to crypto, but seems to be generally accepted across all trading - stocks, forex, commodities etc. I see no reason why it would not apply to crypto
Sounds like you have a method that works for you, in which case great - that was the point of the article
Cheers
And this is the reason why I don't want to engage in trading. I tried once, don't guess what happen because I believe you already know :). I lost all my investment. It's not that big (thanks that it was small).
Precisely...
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verry interesting writing...thanks for sharing
you can't have read it that quickly
hmm right..i read slowly ...
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Verry good post. Upvote you.
Yes very True... I do well when I invest small amounts and do not trade .