Crypto Investor vs Crypto Trader
Ok, so it’s taken me a long time to get to this point. After three years “investing” in cryptocurrency I realise I’ve been wasting a lot of time and money. What I should have been doing is trading it.
The Difference Between Investing & Trading
Investing is where you put your money into something (stocks, art, crypto etc) with the expectation it will generate an income or increase in value over time. Trading is basically buying and selling something for profit. Unlike investing, you can make money even is that something decreases in value.
The problem (and beauty) of crypto is its volatility. Although Bitcoin has proven to be a great investment based on its performance over the past ten years, it’s been a rough ride. The real money has been made in the volatility of Bitcoin and other tradable Cryptos.
Why I’m learning how to trade
I’ve invested in some great Crypto projects, and I’ve invested in in some lemons. I guess this is part and parcel of learning about cryptocurrency, and speculating on Altcoins. But what’s frustrated me the most hasn’t been the long-shot lemons, it’s been my ignorance about when to buy and when to sell the bluechips. The old saying that “time in the market is more important than timing the market” is true, but doesn’t soften the blow of losing money when a market sell-off was obvious. I’m learning to trade for one reason — I want to accumulate more crypto and achieve financial freedom. I now realise to do this I need to be buying the dips and selling the highs, and taking profits at every opportunity!
One of the biggest appeals of trading is that it can be done from anywhere with an internet connection. As an avid traveller / digital nomad, this has been another tick in the box for learning how to trade.
What’s put me off about trading in the past?
I’ve got a confession to make ok, I’m an emotional person! I get emotional when I watch romantic movies, when I leave my friends and family to go travelling, and when I am uncertain about things in general. I’m also not good at math, which makes things like graphs and charts very intimidating. In the past when I’ve bought crypto on an exchange, the rapidly fluctuating red and green numbers where nearly enough to give me a panic attack! I’ve never been a gambler, and the thought of losing money at the push of a button terrified me. The good news is that these fears are rational, and probably stand me in better stead as a trader than someone with a gambler’s mentality and no fear. Since beginning my trading journey I’ve realised that managing emotions and risk are the fundamentals of successful trading.
Why Crypto Investors Should Learn How to Trade
The following are some of the reasons I think anyone who invests in crypto should learn how to trade. By this I don’t mean they should actively trade (unless they have the time and dedication required), merely that an understanding of it might serve them well.
- Trends: Being aware of trends can allow for better timing (when to buy and when to sell).
- Technical Analysis. Trading techniques such as Technical Analysis can provide you with clues about where in the market cycle you are, and if the market is about to enter a bull run or crypto winter. They can serve as your early warning system!
- Mindset. Learning how to trade can make you more emotionally intelligent and mindful. Just because a crypto project “solves a problem”, “has a great team”, and has “good fundamentals”, doesn’t mean it’s necessarily going to do well and appreciate in value. Learning about the forces of supply & demand will help you asses whether you should buy into the project now, or wait until market forces are more aligned.
- Opportunity Cost. There is an opportunity cost to everything, especially HODLing crypto long-term. Trading allows you to gauge both opportunity and opportunity cost on different timescales.
Learn how to Trade Crypto with Isobel Fernández
I’ve decided to share my Crypto trading journey on Gasworks News, a new publication focused on cryptocurrency, technology and gaming. It’s aimed at complete beginners, and is completely free. What I hope to share are some basic trading concepts, and, more importantly, some excellent free resources that will save you time and money. If you would like to learn how to trade crypto, feel free to follow me and Gasworks News for weekly updates. Don’t be scared, it’s going to be fun!
Best wishes, and thank you for reading,
Isobel x
Discalimer: I write for entertainment purposes only, and none of the information here should be taken as financial advice. Investing in volatile assets such as cryptocurrency is a high risk activity! If you appreciate my writing, please give me some claps and share on Twitter.
