Crypto Guide for Dummies - Avoiding Beginner's Mistake

What made you engage into cryptocurrency? Is it because of your fancy of technology? To earn easy money? Or just because it is the current trend?

After few months of trying to learn about cryptos and reading forums regarding this, I learned that most people engage into cryptocurrency because they are hoping that this will make them tons of money. I know most of you are the same, and so am I. However, as I learn more about it, I also learned that it is not that easy. Yes, some people will say that they get rich easily because of cryptos (many do); however, what I can say is that it is a combination of luck and engaging earlier into cryptos that made them rich. Today there are around 1,400 cryptocurrencies and is still growing by the day. If you are thinking to make easy money by investing in new cryptos, you should think carefully, research well, and pray that this will be the next big thing.

In this post, I just want to share with you all some of my learning in the past few months about the crypto trading. Below are some beginner’s mistakes which you should avoid.

1. Being impatient – as the saying goes, “patience is a virtue”. This is also applicable to cryptocurrencies. Some people do transfer their investment from one coin to another just because their coin is not growing and some other coin is in the limelight. Also, some people believe that cryptos are easy earnings because they read in the news that some cryptos rise in value by more than 1000%. I’m sorry to tell you, but this doesn’t happen overnight. Investing in cryptos is like a roller coaster ride. Some times the value is high, some times the value is low. So be patient, wait for your investment to grow, and just try to learn as much as you can about cryptos (which as what I’m doing right now :P).

2. Buy low, sell high – Yes, you read it right. Beginners tend to go with the flow. Whatever is “in” or in upward trend, they buy it because of FOMO. The volatility of cryptocurrencies is very high and this is one reason why veteran investors are very skeptic of this investment. Sometimes coins become bullish and investors hope that the upward trend will continue up to the moon* . This sometimes happen, but most of the time, what goes up falls down. This is where panic comes in. Once a beginner has lost around 20% to 30% of their investment, they sell. This is a very big NO! Never sell a bearish* coin unless there is negative news. Cryptocurrencies (more specifically those legit coins with more than $1m market cap) tends to go up as time goes by. So HODL* and wait for it to go up before you sell.

3. Do not swallow more than you can chew – you should never ever invest more than what you can afford to lose! Depending on your status or how much you earn, just invest a portion of your earnings as the future is not clear for cryptocurrencies. Some days it is very high, but some days it is 6 ft. under. Investing in cryptocurrency is like gambling. You’ll never know when you will win or lose. So think carefully before you invest your life saving.
   Note: Below is an example of someone who made a very huge mistake.
   
   Please don't repeat his mistake :(

4. Victim of shitcoins – as stated by @stellabelle, a shitcoin is an altcoin that becomes obsolete overtime or a scam. I think beginners fall for shitcoin because of good marketing and PND* . People should really learn to research and not just believe what you read in the internet. By researching about the coin you wish to invest in, you will learn the benefits of it, the legitimacy of the coin, and the possible future of the coin. Note: you should also research about the background of the company and the developers.

5. Falling for FUD* - who spreads FUD? The mass media. And who controls the mass media? Some people will say the banks, some will say the government, but I think it is both. As you know, most (if not all) cryptocurrencies are decentralized. Meaning, no one control these coins. And what do banks and government want? That is to control everything. Creating a system which cannot be controlled by the banks or governments and is FREE create conflicts with these organizations. Banks and government want a piece of commission from everything (in the form of taxes and fees). That is one reason why I think that media spreads FUD. FUD confuses the people so that they stop using cryptocurrencies and return to using banks so that they keep a portion of your wealth. Another reason I am thinking of is that this is for the benefit of the few. What I mean by that is those in higher position in banks and governments also invest in cryptocurrencies. What I think they do is they spread FUD so that the value of cryptos will fall, then they buy. After some time, the value will go up, and then they sell. The cycle will repeat and just use your imagination how much money they make by doing this scheme. So don’t immediately believe in FUD, do your research, make your stand firm, and eventually you will earn what is due to you.

Conclusion

Your decisions are only controlled by you and only you. Listen to what others say, but don’t believe everything that you hear. Research, analyze, and think. In the end, you can only thank yourself for believing in something that is true. Likewise, you can only blame yourself for believing in something that is false :P.

Thank you for reading and I hope you have a nice day! Keep on HODLING Steemians!

Note: What are written in this post are only MY opinions. This post is not a professional guide and I don’t claim it to be. I just want to share my knowledge to my fellow new crypto believers; hoping that this will help them avoid mistakes in crypto trading.

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FOMO - Fear Of Missing Out
bullish - positive outlook
to the moon - sudden increase in value
bearing - negative outlook
HODL - hold
PND - pump and dump - act of controlling the value of a coin by bulk buying when low then selling once the value rises.
FUD - Fear, Uncertainty, and Doubt