9 painful lessons I learned trading crypto
Its been a while, I learned quite a bit and here are some things that i think are important.
1. Don’t put all your eggs in one basket
A big mistake I made early on was putting all my cryptocurrency into one exchange. I was using Coinbase at the time and I had all my money stored in their wallets.
I decided to sell all my ether one day and convert it to bitcoin since it was doing better at the time. I entered the amount I wanted to sell and waited for the order to go through. A few minutes later, the price of ether went up by $100 and my order still hadn’t gone through. I cancelled the order and tried to re-enter it at the new price, but the system wouldn’t let me.
I lost out on a lot of money that day and I learned my lesson the hard way. Now, I make sure to spread my cryptocurrency around to different exchanges and wallets.
2. Don’t trade with money you can’t afford to lose
This is a rule that I apply to all my investments, not just cryptocurrency. I know that the crypto market is volatile and that prices can go up and down very quickly.
I only trade with money that I’m comfortable losing and I never risk more than I can afford. This way, even if I do make some bad trades, I won’t end up in a financial hole that I can’t get out of.
3. Be patient
One of the hardest things to do when trading cryptocurrency is to be patient. I’ve made the mistake of selling my coins too early because I got scared that the prices would drop even further.
I’ve also held onto coins for too long, waiting for the prices to go up, only to watch them drop even lower. The key is to find a balance and to sell when the time is right.
4. Set stop-loss orders
A stop-loss order is an order that you place with a cryptocurrency exchange to sell your coins if the price drops below a certain level.
I’ve found that setting stop-loss orders is a great way to limit my losses. I know that my coins will be sold automatically if the price drops below a certain level and I don’t have to worry about it.
5. Have a plan
Before I enter any trade, I always have a plan. I know how much I’m willing to risk and I have a target price in mind.
I never enter a trade without knowing why I’m doing it and what I expect to happen. This has helped me to stay calm and to make rational decisions even when the prices are volatile.
6. Don’t get emotional
This is another rule that I apply to all my investments, not just cryptocurrency. I’ve seen people get emotional about their investments and it always leads to bad decisions.
When you get emotional about something, you lose sight of your goals and you start making irrational decisions. I’ve found that it’s best to stay calm and to think with my head, not with my heart.
7. Diversify your portfolio
I used to have all my cryptocurrency in bitcoin, but I’ve since learned that it’s important to diversify. I now have a portfolio that includes a variety of different coins, including ether, Litecoin, and Dash.
I’ve found that diversifying my portfolio has helped me to mitigate my risks and to make more informed decisions.
8. Do your own research
There’s a lot of misinformation out there about cryptocurrency and it’s important to do your own research before making any investment decisions.
I always make sure to read as much as I can about a coin before I invest in it. I also pay attention to what other people are saying about it. But at the end of the day, I make my own decisions based on my own research.
9. Have fun
Last but not least, I’ve learned that it’s important to have fun with cryptocurrency. It can be easy to get caught up in the numbers and to take things too seriously.
I’ve found that it’s important to remember that I’m investing in something that I’m passionate about and that I’m doing it because I enjoy it. As long as I keep that in mind, I can stay calm and rational even when the market is volatile.
P.S : This is based on my own personal experience and is not a financial advice what so ever.
