A few thoughts on my first week trading crypto currencies

[dankJ]

(I wrote this post with a different audience in mind...so i apologize if some of this is quite dumbed down....)


A few thoughts from my first week trading in the crypto currency world...

and for full disclosure: i am down overall. % wise... a pretty good amount. $ wise ... peanuts...which is exactly why i started very small as i navigate the learning curve. I made some good moves, and made some bad ones as well. One of which in particular is responsible for the majority of the % drop. Essentially i made common mistakes made by the average investor/trader.  (I do have something in play right now that could easily move up 50% ….kind of a moonshot to see if cant recoup those peanuts)

To that, my question is: if i cannot produce results far superior to the average trader/investor...than just what the hell have i spent 17+ years learning about?
 
(And this list is more so for myself to my many thoughts on this subject written down)

* my knowledge of reading charts and trade set ups is fantastic. Its my execution that is lacking. I have not been trading with any sort of established rules and parameters...i have been essentially winging it.
 
Seeing that it impossible to entirely remove emotions from your trading/investing ... it is paramount to have a clear, established set of rules to mitigate the emotional factor as much as possible. Much more so when trading very short term...but certainly applies to investing as well.  (but this is an entirely different topic that I will refrain from going on about as doesnt apply to this post)

*trading crypto currencies is an entirely different beast than anything I have traded before.  And I have traded many different instruments over the years.  It doesnt trade quite like a stock..not quite a currency..not quite a commodity.  Its a little of all of those...and none of those at the same time.  Its a very new concept to me and I have a lot of work cut out to get my understanding of this market to where I would like it.

*there are many different considerations in trading a crypto coin that do not exist when you are simply buying a stock.  When you buy company XYZ on the NYSE, youre buying that company.  There arent a whole lot of other variables.  However, when youre trading a coin...especially an alt coin... most of these coins trade are in markets that are versus other coins.  Youre buying that XYZ stock in dollars...the coin your buying is in other coins...so the performance of that underlying coin is something you need to consider when making a move.  You know the the value of the USD isnt going to have an effect on your investment into company XYZ from the NYSE...not so in the crypto markets.  These coins are highly volatile and can make HUGE % moves, seemingly without warning.  (That moonshot play I mentioned above..its move higher correlates with its underlying coins' sharp decline over the same time)
 
*because this is a relatively new and expanding market, and just now really becoming mainstream...from what I have found so far, there is a severe lack of quality software and charting tools available.  I opened an account with coinbase and binance because those seem to be the most popular.  Coinbase operates sort of like a bank, where binance is the trading exchange.  Binance is the most actively traded exchange (if looking at data from coinmarketcap.com) ...but its trading platform lacks a lot of what I am used to in one.  Its outlay isnt customizable, you cannot have multiple charts open at same time..etc etc.  Another major flaw is that binance does not offer margin trading (although they have plans to offer it in the future).  No margin trading means no shorting.  No shorting means you cannot profit from downside moves... and thats 50% of moves! Its either going up or down...  I do believe some exchanges offer margin, but if these exchanges arent highly active..the liquidity is lower...thus mooting the entire point of having margin availability.

* I have also have had some difficulty in 'getting plugged in'.  In finding quality information on the crypto currency world.  Where to find breaking news and headlines.  Where to find quality charts and data.  Where to find the other quality crypto traders in chat rooms or forums to bounce ideas off of.  Just like the cryptocurrency world itself...its information seems to be very decentralized.  A lot of that will resolve itself as I spend more and more time researching and weeding through the good and bad sources of information.  But early indicators tell me that quality information is lacking.  


In conclusion...while I have learned much in the last week or few from researching and a little dipping of the toes into the pool and making some real trades...i havent even scratched the surface.  If my knowledge of the stock market could be represented as having a value of 100...my knowledge into the cryptocurrency world is at 3 or 4. It was at 0 a few weeks ago..will be higher few weeks from now.  It is an exciting new technology and concept which I feel is the next wave of the future.  Not just cryptocurrencies..but the whole block chain technology which is the back bone of these coins.  There are a LOT of potential opportunities in this emerging and growing world.  


Now the quest continues to finding and realizing that opportunity.....

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[vibingpositively]

Dude you have hit the nail on the head for every investor, trader, or person who has entered this market. I felt similar to you and I think you can take solace in the fact we all felt bewildered at what was going on and how it was going on. Fwiw, I have been here for 7-8 months full time now and if I had to give myself a score out of 100 I would say I got a 20-25. The learning curve is steep as there is tons of information to learn, but if you are diligent you can get through just like anything. You however seem competent and can see the markets clearly, I wish you luck in crypto!

[dankJ]

I will also add that from a purely technical standpoint...in reading these charts...a lot of these coins (especially the bigger ones) seem to behave, for the most part, as a technical trader would expect.  bouncing off MA's , support/resistance levels, stochastics, etc etc.  All other variables aside...that is good to see.

For example..the daily chart of BTC doesnt look very good at all.  2 cycles of lower highs and bouncing off 12.5k support level (on binance) several times (descending wedge)...now its broken under that support on high volume....    and the 2 failed breakout attempts of ETH over last week if looking at 6hr chart.... now 20% lower ....

again, just from a technical standpoint...these things to seem to behave in a somewhat predictable fashion

[dunfida]

I will also add that from a purely technical standpoint...in reading these charts...a lot of these coins (especially the bigger ones) seem to behave, for the most part, as a technical trader would expect.  bouncing off MA's , support/resistance levels, stochastics, etc etc.  All other variables aside...that is good to see.

For example..the daily chart of BTC doesnt look very good at all.  2 cycles of lower highs and bouncing off 12.5k support level (on binance) several times (descending wedge)...now its broken under that support on high volume....    and the 2 failed breakout attempts of ETH over last week if looking at 6hr chart.... now 20% lower ....

again, just from a technical standpoint...these things to seem to behave in a somewhat predictable fashion

Regarding on using Technical tools on crypto trading I can say that sometime they do might work specially on making some support and resistance level which as a trader on this field would really be helpful for you because you can assume that price would really go into that way but not anytime to give you assurance because this cryptocurrency market do involve with emotions on some time which either those walls that we predicted that to hard to breakout sometimes its being eaten up easily once emotions would really be on the involvement.