Sunday, May 27, 2018

What I Learned After Losing $891 In Bitcoin Trading (in 4 Weeks)

Last July (2017), I entered the cryptocurrency world. It was relatively new for me, and I didn’t know much. After doing some research and finding so much optimism in the community, I threw a large part of my savings in Bitcoin in a lump sum.

Bitcoin price kept increasing—and so did my money.

Unfortunately, things took a bad turn starting mid-December. It went worse in January (2018). While I wasn’t much concerned about the price dip because I invested the money that I could afford to lose (investment rule #101), I did keep a close eye on all the developments.

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Bitcoin Trading Mistake

Bitcoin Trading


And somewhere in a distant corner of a forum, I saw a lot of people trading Bitcoin and making money out of the high market volatility. It was quite interesting—because on one side there are so many people who were experiencing big losses, and then there are these folks who were trading and making good of bad days.

So I decided I would trade myself (a decision I regret now). Again, having not too much knowledge about it, I did some research and found a good amount of information on how Bitcoin trading works. Following weeks, I did trade for more than a month. The result? I ended up losing a total of $891 (Rs 57,000+) in senseless and hectic trading.

Also Read: What if Bitcoin becomes Illegal in India

I am not going to blame anyone or anything. After all, it was all my decision to turn from being a hodler to a trader. And admittedly, I did make some rather common mistakes. Of course, I wouldn’t trade Bitcoin anymore, but this entire episode taught a lot of things. Here’s what I learned after losing my money:

1. Bitcoin Trading Is NOT for Everyone


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Bitcoin Trading

Even if you know the basic of Bitcoin trading for beginners and you think you can manage some profit, you’re wrong. This isn’t a game for everyone.

That ‘Buy Low, Sell High’ rule looks simple. But a lot of things fall into it. The learning curve is huge. You need to understand every aspect of trading to analyze the current trends and data properly. Technical Analysis is not very easy to learn. Plus, FUD in the market can really put you into the panic mode.

The biggest and most important thing I learned is that trading may be profitable, but it definitely isn’t for everyone. If you have no interest in learning about this thing, don’t let your want for profit guide your decision. Trading isn’t for you.

Also Read: How To Avoid Bitcoin Panic Sell

2. The market will always be ahead of you


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Bitcoin Trading

No matter what I did and no matter how much work I put in finding the perfect entry and exit positions, the market seemed to be always ahead of me.

The moment I sell, the price rises. And when I buy, the price dips. At a time, I was doing completely the opposite I was supposed to do.

The Bitcoin price movement is highly unpredictable. And given so many external factors come into play, I don’t think even TA is much helpful. I read so many articles on when the price will rise and dip—and the majority of them always turned wrong.

In the rush hours of buying and selling, my losses kept on stacking with no signs of recovery.

Also Read: Bitcoin Price Prediction 2018

3. Trading fees will kill your profit


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Bitcoin Trading

One of the things that I undermined was the trading fees. It didn’t look much. And I hoped the right trades will make up for such expense. But it never happened. Whatever return I was getting in positives, a large portion of that profit was eaten up in the trading fees.

So if you’re trading, you need to factor the fees of the exchange, the majority of who charges high. Plus, you must only get into trades that can return back with big profits. Also, you must limit the number of trades. Overtrading is really lethal.

Also Read: Top 15 Indian Bitcoin Exchanges

4. Other profitable traders have years of experience


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Bitcoin Trading

All those traders who I saw on different forums and social channels saying they are making big profits from trading Bitcoin, they aren’t rookies like I was/am. And it is something I learned the hard way.

You see, these traders are very experienced with good proficiency in technical analysis. Plus, after years of learning from wins and losses, they likely have intuitive skills that guide them to better risk management and money management.

Plus, I don’t think they ever wonder can Bitcoin trading become a real job. Chances are most of them treat this as a full-time profession.

Also Read: Bitcoin and Income Tax India

5. It is very (very) hectic


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Bitcoin Trading

For the month I was serious about Bitcoin trading, it was extremely hectic. I was glued to my screen for hours in a stretch. Even a slight price movement would get be at the edge of my seats. Plus, all the predictions and analysis, along with doing it on my own, would get on my nerves, confusing me to death.

Not to exaggerate but I wasn’t getting proper sleep. My productivity at my day job was drastically affected. My entire routine was in a complete mess. It was tough.

Also Read: How to buy Bitcoin with PayPal

6. It is not worth it


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Bitcoin Trading

I have finally concluded, Bitcoin trading is just not worth all the effort and hassle. I think the market is great for holding. Regardless the dips and rises, at the end of the day, you can expect Bitcoin price to rise high. So why make all the attempts to steal few pennies in purchasing and selling.

I firmly believe now that once you’ve invested your money in Cryptocurrencies, forget about it for at least a year. Be in this game for a long term. Your money will grow with literally no efforts. And that’s the kind of easy money I want.

Also Read: Bitcoin Millionaire Stories

Before leaving, let me state that I am not bashing trading. Of course, there are so many people who are making big profits every day through this approach. I am just bashing the idea of me doing it. Holding is what bodes for me well. Like I mentioned, trading isn’t for everyone. It’s not for me. And it might not be for you.

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This article is submitted by Abhishek Trivedi as a guest post. The views and opinions expressed in this article are solely those of the author. They do not reflect the position of Bitcoin India Wiki.

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