Peter posted this on April 20, 2021
Pls note, nothing written below is financial advice as crypto trading is still the Wild Wild West of finance and you can lose everything + your shirt in 30 mins
Have you been hearing about Bitcoin/Crypto trading all over the place and keep wondering what it’s about? You can stop wondering now because I messed around with it for a while.
To avoid volatility, our processes are set up so once payments are received in crypto, they’re immediately sold for fiat money.
At times I purchase some of the bitcoin for personal transactions and last month, I decided to get my hands dirty figuring how trading crypto works in my spare time.
I opened an account with Binance (you can open by clicking this link) and then transferred $115 (money I can lose without thinking twice) worth of bitcoin (0.0019773 BTC) into the account from one of my wallets and left $115 in my personal wallet so I can compare returns.
Trading Account set,
Money to trade set,
I immediately started experimenting.
I converted the funds from BTC to USDT & BUSD (stablecoins which track the US Dollar) and ended up with the portfolio below:
0.0065 ETH – $10
0.02 BCH – $10
21 XRP – $10
209 DOGE – $12
10 ADA – $10.43
7251 BTT – $10
25 USDT – $24.5
8 BUSD – $8
902 VTHO – $10
21.2 DF – $10
At this point I just didn’t want to hold bitcoin alone so I made those conversions and forgot about it all for a couple of days (in retrospect I should have deleted the app).
After 2 weeks, I discovered the prices of most of what I bought were rising (far more than stocks I buy) so I decided to sell some for profit and then buy others using the spot function on Binance.
I’ve been buying and monitoring stocks since 2006 so the trend charts and co are similar (support, resistance, moving averages, etc) but the volatility in crypto is second to none! I was getting returns I would get from stocks in a year or 2 in days so I became really interested.
While buying, I discovered the Margin Option (Isolated Margin) worked. So with my $100, I can borrow $900 from Binance (at tiny interest) and buy $1000 worth of Bitcoin (10x multiple). If it rises by 20%, after repaying I’d end up with $300 compared to $120 if I’d traded with just my $100.
I went in on margin too and quickly learnt a lesson from it when a quick market dip (there are so many of these) triggered a margin call, causing the entire holdings to be sold goodbye to my money plus that I borrowed 😀
I’ve made maybe 80/100 trades in the last month so I can’t list them all but as at 8pm 17th April, I had $129 for my BTC & $176 for my Binance holdings till I woke 5am on Sunday, 18th April to discover in 30 mins the entire market had collapsed (I later heard a power outage in Xinjiang, China had taken about half the Bitcoin Network out (does that mean Bitcoin isn’t truly decentralized?)).
This was followed by a 2 Hour Maintenance by Binance on the 20th of April which I’m sure caused a further crash meaning by 8am on the 20th of April, I had $118.73 in Bitcoin (+$3.73 on initial deposit) and $109.78 in Binance ($5.22 down from initial & $66 down from 2 days ago).
If I had kept my initial selection, even with the catastrophe I would have the following:
TOTAL on April 20: $267.428 + $120 in Bitcoin = $387.428 which is outstanding for $230, 52 Days & 20 mins of work (compared to logging in and out all the time).
That’s by the way,
For now I’m studying the market to know if it’s a crash or correction after which I’d put in more funds and forget till further notice.
Lessons I learnt are:
– Spread your positions
– Have a strategy and stick to it
– Never chase green
– Don’t be greedy
– Set a stop loss and increase it when you make profits (trailing stop loss) so you don’t end up with air money and had I knowns
– Have enough fiat when trading margin to prevent being liquidated by margin calls (I was liquidated once and its deflating)
– Try to enter trades at the best/lowest possible price (support)
– The most profitable positions are long term.
– Try hard not to sell lower than you bought
That said, I’m not trying to become a crypto trader, I just love learning and really enjoyed this experience in particular.
I just decided to quickly write this before starting work today.
If I’m free (very unlikely), I’d do another post detailing how to use Binance in simple English – How to buy coins with P2P, How to exchange for other coins using spot, How to use Limit, Stop Limit and OCO order, How to trade with Isolated Margin and how to sell your coins for fiat with P2P.
Off to work now.