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The article below is a sharing from a new crypto investor, who prefers to be anonymous.
At the time of writing, Bitcoin had just crashed from an all-time high of over US$60k to just above US$30k, about 50% down in just a few days. It also marked the second month of my foray into the world of cryptocurrency.
How do I feel about it? Numb, in a good way.
Have I made money? Unfortunately not yet.
Have I lost money? Unfortunately yes, paper losses of more than US$30K for now.
Will I still continue? Absolutely!
Why? Because it’s fun! Only with money that you can afford to lose.
With that, some of you might say “Aren’t you gambling?” To that, I say yes and no.
In some trades, I must admit that I was gambling, speculating and hoping for the best without fundamental or technical trading analysis (Doge).
However, there were trades that I dare say were not gambles. They were projects that I researched extensively on, believed in and resonated with.
How Did I Enter Into the Crypto World?
I dabbled with crypto out of curiosity. The idea of a decentralised financial system and industry was mindboggling. I knew why people wanted it to be decentralised but I wanted to know how. Hence, at the start of Apr 2021, I opened a Binance account, buy some cryptos and started trading.
It was a mess to say the least. I didn’t know what I was doing, and definitely did not have a strategy in mind. I didn’t even know where and what to research on. All these changed when I participated in a Binance Launchpool project – Aliens World (TLM).
What is Aliens World?
Aliens World is a space concept game where people can play and mine for TLM (Trilum) and NFT (non-fungible tokens),
I was clueless as to what it’s about and what to expect, only to be enticed by the stories I heard that people made lots of money from new project launches (yes I was attracted by the possibility of making a quick one aka greedy).
The project seemed to have a lot of hype, and a lot of money was staked – more than a billion worth.
Although the tokenomics of the project was questionable, I was a noob then. All I saw was more than a billion dollars staked, it had to be good right?
Thankfully, with some advice from experienced crypto trader friends, I approached this project with caution.
How Did the Experience Went?
So the launch day came and I was glued to the computer screen looking at the charts.
Honestly, I barely know what to look out for to decide whether to enter or not or at what price.
FOMO (Fear of Missing Out) entered along with my friends who have decided to make a trade. I went along, because well, FOMO. I bought it at a price of $10 USD per crypto.
Minutes after launching, the price began to slide and slide and slide and reached half of the price that I first bought it.
I decided to average down. Bad move, as the market was still trying to find the correct price for it. It continued to slide and eventually my paper loss was more than 70%.
That experience was a valuable one.
On hindsight, it provided the formal start point to my crypto journey.
Truth be told, I was prepared to gamble a sizeable amount of my savings into the TLM token, and if I did, I would have a paper loss of 90% of that amount at the time of writing in TLM, not knowing If it would ever recover, especially during this Bitcoin crash.
The TLM incident was just one of many eventful experiences in my very short crypto experience.
Just think about it, in less than 2 months, I experienced multiple all-time highs in several currencies and 50%-70% crashes in a matter of 2-3 weeks. Crypto is definitely not for everyone, but if you are still interested to explore it, I humbly share 3 learnings that I have gathered so far:
1. Do Your Own Research (DYOR)
Almost everyone in cryptocurrency will have something to say and have their own ideas about their favourite and not so favourite coins. Therefore, it is important that you form your own opinions based on your own research from credible sources. If it’s too good to be true, it probably is.
2. Have a Trading Strategy and Stick to it.
This will help you guard against FOMO and FUD (Fear, Uncertainty, Doubt). When I got more familiar with crypto, I decided on an approach where I would cash out whenever the investments I made profited about $100-$200. Until a friend told me that it was not wise to do that because I am wasting opportunities for more profits, therefore I switched to holding instead.
If I would have stuck to a strategy then, my paper losses at the time of writing would have been significantly mitigated. My friend wasn’t wrong, that was an approach that he believed in and was comfortable with. Again, it was my FOMO that caused me to switch to a strategy that I wasn’t comfortable with.
3. Trade With Capital that You Can Afford to Lose
Crypto is highly volatile. There will be situations where the price might drop 40% right after you make the trade. Trading with money that you cannot afford to lose will cause stress that will affect judgement while trading.