How I learnt about trading and started to invest 1000 € in cryptocurrencies
#8 — Eight month of my challenge: 12 topics to learn in 12 months
Trading always intrigued me. The reason is simple, it looked like an easy way to get passive income 🤑. But the reality can be pretty much different and overwhelming because when you look at it you see a lot of weird graphs, and a lot of weird vocabulary such as consolidation, support, ema, trend, bullish. It makes it look very complicated. That is why I wanted to learn it. To be honest, I don’t know anything about trading apart from the basic concept, you buy something and try to sell it at a higher price. I never understood why a price could go up or down. I just imagine a lot of people in trading places placing phone calls like in every movie 😂😂.
I believe the problem is in the stock market itself (at least the french one) which doesn’t seem very appealing in terms of profits. The only experience I had is some people in my family losing their money. Unlike this, I have a few friends who made a lot of profits in the cryptocurrencies market with bitcoin and other altcoins. That is why I was asking myself: why not trying to take advantage of this opportunity of this new market to learn how to trade? Also, you will see in these articles what are the main difference between the stock market and the cryptocurrencies market 🤔.
For the people who don’t know what is a cryptocurrency or what is bitcoin here is a one-line simple definition: it is a decentralized digital currency which doesn’t require a central bank to work. As other currencies such as euro, or dollar, it has a value, so you can trade it. For your information between the 1st of January 2017 and the 25th December 2017 the price of 1 bitcoin increased of 1400%, 1 BTC (bitcoin) was worth $1000 in the beginning of 2017, it is now (on december 25th) worth $14000. It was even cheaper in the very beginning of it, 1 BTC was worth $0.30 in 2011…
It’s also one of the reasons I want to learn about trading cryptocurrency, because it’s a good opportunity to earn money!
I invite you to google “bitcoin” to know more about it or to wait for my next article **spoilers** 😬😬 where I’ll explore more deeply the cryptocurrency world. Also, we will see what are other ways to make money out of cryptocurrencies.
- Finding a mentor
I had two mentors to learn about trading this month, one is my friend Ivan who invested in cryptocurrencies for years, he is not millionaire though but had enough experience with the vocabulary, the websites to use, and some of the best practices. The second mentor is my cousin, a maths professor who is more into mathematical indicators.
- Defining the scope of the topic
The scope of this topic is to understand the different indicators, to be able to read charts, to make buying/selling decisions by myself, to be able to understand how the market works and why the prices go up or down.
- Choosing a learning resource
My cousin recommended me the book “La bourse pour les nuls” which is the French version of Trading for Dummies 😁, the only thing is that in English there are many trading for dummies books so I cannot share the exact link. This book is only focused on the stocks market (and other financial investments related to it), so I still had to read a few medium articles.
- Defining a project
My project is very simple, I want to build a portfolio and invest 1000 € in cryptocurrencies. If you think I am crazy to invest 1000 € just to learn how to trade, compare it to the price of one year in a Business School for a Specialized Master, it’s about 19 000 € 😏.
Because this article would have been too long, I decided to cut it in 5 smaller articles! You can read them in any order! I hope you like them.
Should You Invest in Cryptocurrencies?
You will find in this first article, how the market works, why the price goes up and down and the differencies between stocks and cryptocurrencyes. The basics!
What are the differences between stocks and cryptocurrencies ? How is the price defined? Are you wondering whether…medium.com
Read This Before Starting with Your Cryptocurrency Portfolio
This following article will tell you, what are the currencies to buy, how to choose them and also how to build your strategy.
Do know what cryptocurrencies to buy? I didn't know either. Actually, I still don't know what are the cryptocurrencies…medium.com
Become a Better Crypto Trader with Technical and Chart Analysis
Find the right time to buy and sell with technical and chart analysis. These technics will help you to anticipate the evolution of the market. You will find them in the following article.
Buy and sell cryptocurrencies at the right time with chart analysis I am sure you heard about EMA, Resistance…medium.com
Manage Your Cryptocurrency Portfolio and Track Your Profits
Managing your portfolio can be sometime very painful, that’s why I made the following article containing the things you should do, and the tools you can use to achieve that.
Where to find the right information and how to track your profits Once you invested in cryptocurrencies, it's very…medium.com
A Step by Step Guide on Investing in Your First Cryptocurrency
This last article explains step by step how to buy your first cryptocurrency.
How to buy bitcoin, ethereum or litecoin without paying any fees on GDAX, step by step You are ready to jump on the…medium.com
My current portfolio
Now you have seen all the basics of cryptocurrency trading, in the 5 articles above, let’s see my results.
As concern the strategy I went for a long-term strategy: HODL.
I will just keep my cryptocurrencies, check from time to time its evolution, maybe if there is a trendy crypto I will sell some to buy the trendy one.
Also, I decided to have a lot of altcoins in very low quantity hoping that one of them does +69000% in one year like NEO did in 2017 🤞😬.
Here is my portfolio:
- 66% are coins with big market capitalization (BTC, ETH, LTC, XRP, NEO)
- 33% small alt coins and very diversified (the rest)
I started to build this portfolio the 1st of December, 2017 and finished buying all around the 15th of December 2017. The chart on the right has been made the 8th of January.
I made 45% of profits between the 1st and 31st of December. Which is quite good for one month knowing there was a bitcoin crash the around the 22nd of December. Mainly because a South Korean website got hacked and Coinbase added BitcoinCash to their exchange.
Most profitable coins
Here are the coins which gave me the biggest profits (between when I bought them around mid-December and the 8th of January 2018). Note that it’s not because it’s my most profitable coins at the moment I write this sentence that it will still be the case. Also, it doesn’t mean it will keep growing! Be very cautious because I didn’t buy them all at the same exact date so you cannot compare them directly.
- Stellar Lumens — XLM +439%
- Bytecoin — BCN +432%
- Ripple — XRP +328%
- Steem — STEEM +299%
- Request Network — REQ +222%
The ones which were the least profitable for me, mostly because I bought it too late, or at all-time high: Litecoin LTC, Iota MIOTA, Monero XMR. But I truely believe they will grow well in 2018!
Feedback from this learning month
What went well
- I made my investment.
- I understand now all the vocabulary.
- I have a strategy.
- I already make some profits.
- I am not (too much 😅) affected psychologically by the price of bitcoin.
What to improve
- I finished my learning the 23rd of December it took me one month and a half.
- Learn more deeply about all the Technical analysis and chart analysis.
- Maybe keep a part of my investment for short time trading.