2017 was a life-changing year for many including myself, and I hope this can inspire some of you to keep pursuing the crypto dream.
Here's an end-of-year reflection of my $crypto trading journey.
THREAD:
Here's an end-of-year reflection of my $crypto trading journey.
THREAD:
1/ As a follower of tech/startup news, I came across a Bitcoin article in April 2013, but dismissed it as a bubble/fad. Read into it 6 months later, got hooked forever once I understood it was more significant than the internet and was the most revolutionary invention in my life.
2/ Thankful I stuck to it, even when nobody around me saw it the same way I did. It was the possibility of financial freedom that first attracted me, but like many others, its not the only reason I stayed. Since August 2013 I’ve practically been following the BTC price every day.
3/ By most measures, Bitcoin adoption is still in the early adopter phase and there’s a huge once-in-a-lifetime opportunity sitting right under our noses if we care to look. As I said before, play your cards right and you’ll be able to achieve financial freedom in <5 years.
4/ As a newcomer, its easy to get exuberant about the technology, thinking it will change the world tomorrow and that adoption will happen overnight. Entering BTC at $200 and seeing it rise to $1000 in 2013, I thought it was going to get to $10,000 in no time at all.
5/ That however took 4 years to materialize. Not only that, but it started with almost 2 years of downtrend, during which BTC lost nearly 90% of its value. Imagine trying to hold on to your beliefs while price declines so dramatically. Not easy.
6/ Common fallacy is that anyone who heard about or got into bitcoin early is rich today. Anyone who got in before 2015 might have sold much earlier. Anyone who got in after 2015 might have sold 10x ago, or had his coins hacked along the way and have had to restart.
6a/ @brucefenton made a very well articulated video about this so I won’t delve into it. Highly recommended watch:
@brucefenton 7/ Anyway, my security is horrible. I lost 95% of my coins in 2014 getting hacked coz I didn’t have 2FA on my exchange. Got scammed on bitcointalk a couple times. Got phished once or twice. And I always have to make the same mistake twice or thrice before I really learn.
@brucefenton 8/ Sometimes we make bad trades, get phished/hacked. Whatever happens, get back up, learn from it, move on! Losses are part of trading and the faster you get over that, the quicker you become a winner. If we took all our trades perfectly, we’d all easily be zillionaires by now.
@brucefenton 9/ I’m a horrible trader and I make mistakes ALL the time. I hold on to losers too long, add to losers, buy full size in one-go, buy too large a size, risk too much, fall prey to my emotions, and sold when I should have held. But we all do this in some way. Losses are inevitable!
@brucefenton 10/ I’m trying to improve all the time. I may not be the most analytical person, but I play to my strengths, such as listening to my instincts (having trained them for years). I learnt so much from crypto trading this year, and maybe some of these lessons might be useful for you.
@brucefenton 11/ *Never* go all in. If you did on one coin, bought the dip too early, or averaged down in a downtrend, it is likely you end up with no funds left to take on new trade setups. The opportunity cost of doing so is HUGE! Some traders stick to 1/2% risk per trade for good reason!
@brucefenton 12/ This largely boils down to not having a system in place! The easiest part about trading is coming up with a plan. The hard part is having discipline to actually follow it.
@brucefenton 13/ Holding on for too long is another painful lesson. Greedy expectations of unrealistic gains. Trading on “hope” will most times end in disaster. Refusing to take losses when market has proven you wrong - can be very painful.
@brucefenton 14/ Confirmation bias is another problem, looking for news/tips that agree with my view, adding false confidence. Need to be self-aware, more objective, remove biases. Don’t marry your positions/bags! How will new information affect the market? What will participants think?
@brucefenton 15/ It's paramount to form your own opinion on the market, and not depend on tips from others. It’s the only way to remain consistent. To that end, I make sure to clean up my Twitter feed every once in a while. Instead of getting euphoric with Twitter, I use it as an exit signal.
@brucefenton 16/ If a trade is easy to take, it is usually wrong. FOMO buy breakouts less, especially if it is only the first or second attempts which usually fail. If a trade is taking longer than expected to move, get out!
@brucefenton 17/ Other common mistakes include not (knowing when to) sitting in cash, or BTC, or take positions. Using entire portfolio, being overexposed, taking too much risk, being greedy. Need to learn to be patient, sit on my hands - know when to HODL, when to take profit and move on.
@brucefenton 18/ I’m just an average human who found out about Bitcoin couple years earlier than most, stuck to my beliefs, and spent a lot of time observing and learning how to play the game. Even with making a ton of mistakes, I managed to outperform the market, and I’m sure you can too.
@brucefenton 19/ From my observation, 90% of traders are underperforming a simple BTC only BUY & HODL strategy. If you underperformed the index being $BTCUSD, you LOST money! But no doubt, trading alt coins or margin, whichever floats your boat, is a highly enticing endeavour with the
@brucefenton 20/ potential to quickly increase your BTC multiple folds. Needless to say, this comes with immense risk, and since trading is not easy, goes back to why >90% of traders lose money, or rather, underperformed compared to the market index.
@brucefenton 21/ The point of looking at charts, is to decide where the best market opportunities are, and what price and time to enter. If crypto trading is new to you, let me just leave you with some of my overarching thoughts about how to approach trading markets.
@brucefenton 22/ Trading is not easy. But neither is it rocket science. More than a game of numbers, it is a game of people, of emotions, and human psychology. It’s about systematically taking high probability trades for a positive return over the long run.
@brucefenton 23/ There’s no magic to getting better at trading. Understanding basics of FA & TA is essential, and can be easily from reading articles, books, watching videos. You're lucky to have a ton of available resources today to accelerate your learning and shorten the learning curve.
@brucefenton 24/ But doing all that alone won’t make you a better trader. Nothing can replace screen time and actually making trades and mistakes and learning from them. So get skin in the game, and go out there and start experimenting with various strategies and test your hypotheses.
@brucefenton 25/ If charting is completely new to you, start with ‘triple screen trading system’, a top-down method of analysing the markets. Start with the highest timeframes (1W 1D) to get a sense of the big picture, before zooming into smaller timeframes. Execute on the smallest timeframe.
@brucefenton 26/ Another thing that might help; instead of looking for price targets, look for ‘time’ target. I personally find it easier to measure markets according to time rather than by price, which perhaps could be driven by events with known dates.
@brucefenton 27/ The seasons affect (crypto) trading. Q4/Q1 is when Altcoin markets pick up again. Sell in May and go away has been appropriate for the alt coin market for the last 3 years. Doesn’t mean it will continue to be true in the future.
@brucefenton 28/ Start a trading journal. Study your exchange trade history. You’ll learn so much about yourself, your habits, biggest mistakes, and biggest wins.
@brucefenton 29/ If you’re here, you might have seen what I first saw in BTC back in 2013, and as an early adopter, you’re already ahead of 98% others. Make full use of this opportunity because I’m not exaggerating when I say this only comes once-in-a-lifetime.
@brucefenton 30/ Understand the technology, so you have the confidence to invest in the long term prospects, even if the short term may look bleak. Life comes at you fast, so make sure you’re ready for it. Whatever happens, stay humble, stay classy. Happy new year! <3 /end
