I actually got into Bitcoin and altcoins as a trader. I first heard of Bitcoin back in 2010-2011 (iirc) but it sounded to me as a ponzi/HYIP and never did any research. Later I bought some Bitcoin in January/February 2014 and bought a small miner to mine some altcoins. I was clueless and gullible. I lost a lot of money on scams, but every time you get scammed you learn something new. I saw the potential of crypto and I saw the potential profitability. That’s why I never gave up and kept working on my strategy.
Survival tips as a trader:
- Don’t try to guess the top or the bottom: Take profit and use stop losses
- Don’t be a believer: even though some coins might be good long term holds, the big majority of them aren’t. Assume everything is a scam and have a clear exit strategy.
- Check the liquidity of a coin, there are people that are comfortable with coins that have 0.5-1 BTC daily volume. I am not one of those people. Make sure you can enter and exit your position easily.
- Don’t chase pumps, everyone misses trades and that’s fine, just find a setup for your next trade.
- Be critical of everything you read on Twitter: there are some good traders that make good calls but always assume they’re trying to dump their bags on you. DYOR (Do Your Own Research) They only tweet after they already accumulated enough themselves.
- Get some trader friends that you can bounce ideas off. This will take time but is quite important. Don’t expect this to be easy as a newbie, when newbies approach veteran traders the veterans will be extremely distrustful since they all know how many scams there are. Don’t take it personal.
- ICO’s can be very profitable to trade, but do proper research:
- Is the ICO capped? How much money is their minimum/maximum?
- Why do they need that much? What will they use the funds for?
- How much is the premine for the devs?
- Who is involved in the development and who is shilling it?
- How likely is it that coin is going to be added to major exchanges?
- Do they have a proper website, whitepaper and bitcointalk ANN?
- What is the coin/token about? Do you think it can actually be good or are they trying to solve a non-existent problem?
- What do your trader buddies think about the ICO? They might see some red flags that you’re not seeing.
- Avoid scams: smaller exchanges are very eager to add new coins without proper research: the bigger the exchange the less likely the coin will end up being a scam. Poloniex is the biggest exchange so there you have the smallest chance of a coin turning out to be a scam. Of course devs can always leave a coin and the coin will end up dead.
- If you’re a new trader: be very careful with margin trading Bitcoin: anything over 10x is gambling at that point. Always use stop losses and NEVER margin trade an alt.
- Be careful with paid groups, always ask yourself: why are they doing a paid group? Are they not profitable enough to just trade for themselves? That being said: I’m in 1 paid group and that’s the Gambit one. I’ve known Collin for a long time and trust him with my private keys even though he would call me an idiot if I would actually do that.