More Things I wish I knew when I started Crypto Trading
Once upon a time, a green crypto trader with a Doge in-a-suit avatar wrote an article called “Things I wish I knew when I started Crypto Trading”. I’ve now become a little older, a little wiser, and a little more experienced.
While I still think that first article holds up well against the test of time, I see additional things that are not mentioned in that article that I feel are worth mentioning. So, with that, I present to you More things I wish I knew when I started Crypto Trading.
(Note: I may overlap a few points from the last article and if so, it’s more to reinforce my current ones)
- Stop using Hundreds of Indicators
I’m not going to argue with you what indicators are the best, but I will discuss what I use, a little further into this piece. Overall, using tons of indicators will give you mixed signals. Even more so, you’re probably not experienced enough with all of them, which will also bring down the accuracy rate. Newer traders tend to try whatever indicator is currently hot, then, when they get burnt a few times, move on to the next one and continue the cycle until they are fully rekt.
Whatever it is you decide to use, research into it, watch some educational videos, pick up a book, and master a few. It is much better to master a few indicators than to try and be a jack of all trades. When I really started to focus on a few indicators, I stopped getting mixed signals and learned to trust them and my success rate improved. My personal favorites are the Ichimoku, OBV, and RSI. I really don’t use much else these days.
Experiment until you find what you best fit with and like, but once you do, stick with it and back test your strategy before using real money! There is no “magic” indicator that will give you a 100% success rate.
2. Scammers are Everywhere
I see it all the time and I still can’t figure it out, but people fall for scammers/LARPers . You know that guy that’s giving away 10 BTC? He’s not. He’s farming followers via giveaways so he can later monetize his account or do something else malicious with it. You know that guy who’s saying send him 0.1 ETH and you’ll get back 10 ETH? You’ll never see that ETH again. Do not give your money to any cartoon avatar who is promising to manage it. You don’t know their experience level and they can just cut ties, go dark on social media, and run away with your money. No one has a 100% success rate and anyone saying so should be a huge red flag. There are no shortcuts to becoming a good trader and making money in these markets. It takes time, experience, mistakes, and building of your skills.
Stop falling for this kind of stuff. You are falling victim to Social Engineering. Anything that sounds too good to be true, is too good to be true. Remember, Blockfolio and Delta “portfolios” can easily be spoofed. Go ahead, pop the app open and just add 1000 BTC to your account. Look at that! You’re ready to LARP!
3. Learn how to Define the Trend of the Market.
If you take out the emotional side of trading (way easier said than done) it was possible to spot the bear market that started in 2018. Our friend, the previously mentioned Ichimoku, spotted this on higher time frames.
Overall, you need to zoom out to spot those larger shifting trends. 1D, 3D, and 1W charts are your friend for the large trend shifts. I wrote about spotting trends using Heikin-Ashi a while back. Check it out if you’d like to learn more about using HA. Also, there is a simple moving average strategy using HA if you’re into that.
As of writing, the trend of BTC is what drives the entire market. If BTC is in a bullish trend, Alts will follow this. Same goes for a bear market. Keep an eye on BTC’s trend if you’re an alt trader especially.
Why is it important to know the overall trend of the market? Well because…
4. It is not Always Smart to HODL.
I went back and edited my previous “things I wish I knew” article because it had stated that generally, hodling was ok. Boy did I learn how wrong that was after living through the longest bear market to date in crypto history.
Hodling works while in a bull market because generally, BTC is going up and everything follows. Once BTC enters Bear mode, unless you’re the guy who’s is passively investing (just buying and waiting this out for years), it is time to abandon ship and sit on the sidelines until the next bull market comes about.
5. You’re going to Lose Money.
If you’re just getting into trading, you are going to get rekt and do some stupid stuff. Mentally prepare for this and seriously only trade with anything you can afford to completely lose until you know what you are doing. This can take years before you’re comfortable. I’ll also tell you what hundreds have probably said to you, secure profits while you’re in the green. Greed is your enemy. But, probably like me, you’ll have to learn this lesson the hard way.
Most experienced traders still have more losses than wins. The reason why they remain profitable is because their wins are so much more substantial than their losses. Do not let your losers run. Cut bait and get ready for the next trade.
Plan your trades out and use the Risk:Reward tool built into TradingView. If you only take Risk:Reward trades of 2:1 (or higher) you only have to hit 40% of those trades to be profitable. Obviously nailing higher R:R trades will decrease that percentage even more.
6. Everyone on Social Media thinks they’re Better than You
If you are comfortable with your Technical Analysis and decide to post it somewhere public, be prepared to be told just how dumb you are.
If you know what you are doing, just ignore the chatter. You should never let someone else influence your trade unless they:
A) Have some kind of a legitimate sourced reference on why you’re doing something wrong (like people using candlestick wicks with RSI divergences, RSI doesn’t calculate using those wicks and I still see people do it all the time).
B) They are someone you look up to and you know they know what they are talking about.
If it’s a random Twitter asshole, ignore them and move on with your trade. If I adjusted my trades based on each squawking parrot that gets in my comments when I post my TA, I’d have missed so many great trades. Do not allow them to talk you out of your trade. I’m not saying I’m perfect, but I am comfortable with the tools I use, constantly study more on them, and have a solid group of traders I’m comfortable collaborating with if I have a question.
So, wrapping things up…
I’ve been involved in Crypto for about three years now as of writing, actively trading for about two. I still consider myself green, and maybe in another year, I’ll circle back and write some more lessons I’ve discovered on the way. I’ve been fortunate to have some amazing mentors along the way (looking at you Nicholas) to really help me out.
I hope you’ve found something of value from this and if you disagree, well, you can find me somewhere on social media and tell me how dumb I am.
It’s been a wild ride so far, but I’ve had a lot of fun and met some amazing friends. I look forward to seeing you all on the battlefield of trading. You can find me in the following places:
Twitter: @JoshMcGruff
Instagram: @JoshMcGruff
TradingView: https://www.tradingview.com/u/JoshMcGruff/
Enjoy the story? Learn something? Buy me a beer to say thanks!
CashApp — $JoshMcGruff
