A Note & WARNING To The New Crypto Traders/Hodlers

(See TLDR at the bottom)

I wanted to share a note and important warning from my first-hand experience about investing in Crypto and some of the mistakes I made that ended up losing me money, that hopefully by reading this you can learn from and avoid.

This is basically the post with all the things I wish someone would have told me before starting my Crypto journey.

While this post is a bit on the long end, I promise you, if you’re new-ish to Crypto, reading this just MIGHT save you a whole world of trouble down the road, or at least I hope

When I first got here a while ago, though later than I’d hoped, I wanted to invest in some of the more well-known assets, like Bitcoin, Litecoin, Cardano, Ethereum… You know, the big name, heavy hitters.

But then, I started consuming a bunch of content on Youtube and here on Reddit and began seeing all this talk of people taking their portfolio 10x , 20x , 100x , etc… and I was immediately thinking “I WANT THAT!” I kept hearing stories of people making life changing money over a few years, a few months, and sometimes a few week… and it just seemed so real and feasible at that time, since everything I looked at was basically going straight up… This where I began f$cking up, and where the main message of this post begins.

Mistake #1 – Trying to time the market

I was already in for a little bit of cash on Litecoin/BTC… But by the time I DCA’d, a few weeks in, my profits from the small amount I invested were nice, but nowhere near life changing… And then a few weeks in… It started going down… and down… And as much as I thought I had prepared myself for the volatility of things in crypto, it was fuc$ing terrifying seeing everything start to go red…

So, thinking I would outsmart the dip, I quickly sold. I was just acting out of fear but at the time I really thought I was being clever… And nd next thing I know, it would begin to go back up… So thinking again I’ll outsmart volatility, I would jump back in not to miss out on profit and then it would dip again over the next few hours even lower when I’m away doing something else… and then I’d open my app to see all red again… and again try to ‘protect my losses’ by selling, slowly losing more and more of my profits, and then my investment… (That cycle not only gets worse over time as you get more and more frantic and scared and you maie worse and worse decision).

So in a timeframe of a few days or weeks when the market would go up a net of say 15%… Because of my dumb erratic buying and selling, I ended up only losing money, say 10%… meaning I was down 25% of where I could have been if I had just held… By trying to time the market.

So the lesson is – Don’t. If you believe in something, just buy and HODL. And if you are trading short term, have a set entry and exit and ideally automate this if you can (set a stop loss, etc) so that you know where you take profit and exit or otherwise where you cut your losses, in a minimal way…

Mistake #2 – These damn FEES, man!

Now, say I was actually Einstein or even some sort of wise prophet seeing into the future, managing to time thr market so well with every trade, which is obviously unrealistic… But say I was just lucky in timing the market, the other thing they don’t really tell you about, is the insane amount of fees you end up paying for basically every single thing you do…

Depositing fiat – Fees.

Converting to bitcoin – Fees.

Converting from Crypto back to fiat or sometimes also Stablecoin – Fees for freaking daaaayz.

These fees are nuts, especially on Centralized Exchanges like Coinbase or Gemini. But it doesnt end there…

The really wild fees are in the form of ‘GAS FEES’ which means the cost of the transaction of doing anything with your crypto. This is the worst on Ethereum, and namely apparent on Uniswap, which just so happens to be where most altcoins are available.

So the lesson here was – Not only is holding helpful to avoid fees, but, especially if you start off with a small portfolio, don’t bother ‘day trading’ or actively trading because the fees alone will bleed you dry…

Mistake #3 Altcoins And Being Greedy

The 3rd and final thing I’d like to talk about started when I felt like that the tokens I’d initially acquired (BTC, ETh, LTc) were not as ROI exciting as some of these altcoins I kept hearing about doing 20x overnight… I would do the math and thought “well even if I only risk like 5 percent of my portfolio, if it did a 20x, it would basically 2x my whole portfolio while only risking 5%… WHATS NOT TO LOVE, RIGHT?! Well… Not exactly.

I was frustrated not knowing where these Youtubers and Redditers keep finding these ‘Alt-Coin Gems’ before they “Moon” aka hit that initial 10 or 20x, so I figured *”If only I find their source, I can invest before they manage to make big returns and the fomo flows in…” WHAT COULD GO WRONG RIGHT? I think you already know where this is headed…

So I find a few subreddits and telegram groups where people are talking about “moonshots” before they hit scale, and I legitimately thought I struck gold. This was intensified even more when every single post in that group’s history would reveal to have called all of these coins just before they pumped… Little did I realize that group was basically calling out every single coin, and so ‘even a broken clock pumps 20x twice a day’

Anyway, I started investing in these ‘moonshots’ and while I made a little bit of money on a few ‘trades’, I lost a whole bunch more to both dumps and to fees… and so at this point after a little while being invested in Crypto, not only am I not any richer, but my whole portfolio is down, and I’m feeling really REALLY dumb.

The other and final aspect of mistake #3 is greed, and learning to be methodical. A bunch of different times, while either investing in small altcoins/shitcoins or blue chips (btc/eth/etc) there were many moments where I was temporarily up a significsnt amount on some token I had bought without really knowing much about…

And as I thought I was very carefully researching (really I was just reading echo-chambery bs some other people holding the token wrote about it) I thought I knew this coin would 50x for reasons a, b & c… So when it was up 3x I would think “well if I just let it 5x I could make THAT much more… and I’d end up getting greedy and then losing on profit. This is especially true for altcoin moonshot type coins because its mostly hype, pumping and dumping, without a real use case. So what I realized later was that doing a guranteed 2x is always better than 5x on paper on something entirely uncertain.

*SO WHAT SHOULD YOU TAKE AWAY FROM THIS? A couple short points*

-> Can’t overstate the value of having a plan for entering, exiting and taking profit… It helps to plan ahead, while you’re thinking logically and not when emotions run high and things are going wild.

-> Profit is profit, and its not smart to take profit, but often the safer way to operate in a highly volatile market. Dollar cost averaging both in and out is your best friend.. Learn how it works and use it to your advantage… Also find a platform to keep track of your portfolio in real time to help you know (especially if you use several wallet/exchanges/etc and don’t have one organized place to see your portfolio, profits and losses.) where you stand on every single token you own.

-> DO NOT.. and I repeat DO NOT underestimate the value of doing research and even doing research on HOW TO PROPERLY DO RESEARCH… Because it can save a lot of losses and heartaches.

-> Moonshot groups are filled with pump and dump scam coins… And you’re unlikely to do 100x on a coin you casually come across that magically nobody has heard about… The real gems, have presales, whitelistings and seed rounds and by the time they get to you they’re not as quick of a 20x, if at all…

-> Balance your portfolio between holding ‘safer’ more stable tokens with possibly less crazy of a return and entertaining the thought of investing a small portion in riskier short term trades… Only given the right circumstances, of course…

-> Don’t jump into a coin because of fomo – If a coin is pumping, and is already up say 20%, yes perhaps you would miss out on a little more profit if you don’t jump in right then and there, but its more likely that later there would be a correction where you’d lose money if you bought in late, and instead you’re better off investing in something after it has gone down, and having a clear entry point that makes sense in the macro picture of things… Especially if you believe in a token’s use case and practicality long term.

-> Last but not least, BE PATIENT and have PERSPECTIVE… Huge profits don’t typically happen overnight making a 50% return in 6 months, while it doesnt seem like much when compared to 100x over a week, it is still an amazing profit for a beginner in anything, let alone something as volatile as crypto.

I really hope this helps, even just 1 person, to avoid making some of the mistakes I did and losing money. Be vigilant, stay safe, do some good research on things, and don’t operate out of greed, fear or impulse, but rather think through things clearly and wisely. Thanks alot for reading and let me know if any of what I said is something you struggle with or have struggled with as well at one point.

TLDR

🔹Don’t try to time the market

🔹Have a plan (exit/enter/profit)

🔹Beware of fees

🔹Dont operate out of greed/fomo

🔹Research and validate your alt coins thoroughly

🔹Less but actualized profit is often better than higher potential profit

🔹Dont half-ass your research

🔹Beware of moonshot groups/subs

🔹Balance your portfolio wisely

🔹Be patient and have macro perspective

Now that you read the sparknotes, if this seems relevant to you, I do suggest you read the whole post… perhaps in a few chunks… if this post is relevant to you, and you won’t take the time to read it or even properly skim it, you’ll probably end up making some of those mistakes yourself and the cycle will continue… I’m just trying to spare you the trouble and money loss, and as they say “the devils in the details”.