The 7 Golden Rules Of Cryptocurrency Trading

in cryptocurrency •  last year  (edited)

Dear Steemit Friends,

Crypto world was started on January 2009 when bitcoin was launched. The mysterious origins of Bitcoin are like the stuff of legends. Until now nobody knows who Satoshi is. If you read whitepaper of bitcoin you will find that it proposing a peer to peer electronic cash system but when many people believe the value of bitcoin, bitcoin becomes more than useful than people thought before. There is no underlying asset to decide how much value of bitcoin and even more there is no tangible asset you can have. Gold is valuable because people believe the value of gold, and now bitcoin is more valuable than gold.

Three years after bitcoin launched I started cryptocurrency trading. I started with belief that bitcoin is a great technology. It's like Bill Gates's vision, vision of a computer in every home that become reality. No body thought that a computer in every home in 1970 and so does bitcoin

I have 5 years experience in Crypto currency trading. I get profit 500-600% annually. I would like to share my experience. It is not perfect but I hope it can help beginner to trade wisely.

1. Invest only what you can afford to lose

Your life is more important than your investment. You have to continue your life when market crash. There is nothing permanent except change. Today 1 bitcoin is more valuable than 1 gram of gold but it can be changed. It could be ethereum or other cryptocurrency who lead the market.

2. Never invested in Initial Coin Offering (ICO), unless you are ready to lose your investment

ICO is not for beginner most of ICO never traded on exchange.The biggest problem is you can buy but you cannot sell.

3. Trade on major exchanges.

To be listed in major exchange, coin creators are charged up to $ 1 million per ICO, if the coin creator have $ 1 million they have enough money to realize the roadmap, without enough money the ICO will ended soon.
You can check https://coinmarketcap.com/currencies/bitcoin/#markets, major exchange can be reflected by high volume trading.

4. Cryptocurrency demand is based on services and feature offered

I only choose cryptocurrency with usefull services and feature. For example anonymity offered by Verge, Dash. Social Media services offered by Steem. Banking transaction offered by Ripple. The more people use the services and pay for it in the cryptocurrency the higher the cryptocurrency value will be

5. Cryptocurrency has no underlying asset

Since no underlying asset for cryptocurrency you have to estimate how much money the creator of cryptocurrency has spent to build infrastructure. How many node they invest, how many exchange support them. They need return on investment so they have to make good publication to increase price. Fork cryptocurrency or copy paste platform without big investment from creator must be avoided.

6. Be aware scam scheme

E dinnar coin gives return 20% per month by producing more coin, it seems interesting but we have to understand that more coin in the market means more supply and the price will decrease.

7. Market size

Market size does truly matter. Each cryptocurrency has to compete each other to be used by user. Higher market size means higher opportunity because many people believe that the cryptocurrency valuable. You can check market size here https://coinmarketcap.com/ I only trade Top 50 rank listed at coinmarketcap, low rank cryptocurrency is risky

If you have any feedback please feel free to write comment

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Great reminder. I wish that I saw this blog when I first did my first trade on Crypto. Always do your due diligence after days and weeks of researching. Almost all things that been rushed are often failed. Dont FOMO(fear of missing out) on something you dont fully understand. Great reminder @redstrawberry

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Thats very important, FOMO is a big enemy haha, I would say in my case the biggest

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Thanks for your comment @hiroyamagishi

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added knowlodgment for me, thanks

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Just my thought .you are right @hiroyamagishi

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nick.jpg

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Thanks will keep these 7 in mind!

No worries. Satoshi "Scrotumoto" has a plan... And it's parked "somewhere" in his $BTC Kimono!...

I think first rule is very very important. - Invest only what you can afford to lose. Actually it's only crypto but also all investment.

Never invested in Initial Coin Offering (ICO), unless you are ready to lose your investment

I guess many guys still regard ICO as big chances.

I would add 8. Invest in coins that have a big community. Without a community you can't really get adoption of services.

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Great point @rose98734! To expand on that a little, I would say both a big community of people engaged in social media such as Telegram, but also a big community of investors. My experience is that an army of evangelists, each who are in for $500 worth of Ethereum can drive awareness in a powerful way.

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An "actively engaged community" is key. Strong marketing, quality of the teams, technology and partnerships are good to know about when investing. It appears that many traders will disregard some of the investor tips and trade based on mostly price behavior and volume.

Investing in crypto/blockchain that solves real problems and helps people is another indicator of long term sustainability.

Trading and investing are also associated with different kinds of risks and rewards, short term vs long term.

Should #HODL and #BTFD be added? 🙃

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  ·  last year (edited)

Agree. Big community= lots of alpha testers and early adopters and marketers

nice

always good to learn something new :)

Rule nr1 is wrong. I should be: Invest all what you got and eat noodles

I can't say that I agree with you on number 2. The reason I say that is that I can't differentiate between ICOs and coins listed on an exchange. The amount of volatility puts all coins at effectively the same risk level. On any day, any coin could drop 90%, which is close enough to 100% in my book. Would you really be that surprised to see Bitcoin drop to $2000? That would be down 90%. So from that perspective, I don't see a difference between your number 1 and number 2, which is to be prepared to lose all of your money. From another perspective, I would say that the asymmetric risk of ICO's make them a less risky choice than established coins. I'm not a fan of all ICO's or even most ICO's, but the ICO's with a solid team, lots of social engagement, and buzz can, and have, done 100x. I would take 10, $500 strong ICO investments over $5k worth of BTC.

Wish I had known these when I started! I learned some tough lessons!

I hope it should be try for me..

The Tree of Life, or Etz haChayim (עץ החיים) has upvoted you with divine emanations of G-ds creation itself ex nihilo. We reveal Light by transforming our Desire to Receive for Ourselves to a Desire to Receive for Others. I am part of the Curators Guild (Sephiroth), through which Ein Sof (The Infinite) reveals Itself!

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Kabbalah much?

@redstrawberry Good advice. I like to check CoinCheckup (and other sites) too, they have an algorithm score. For Verge it's 89.10%. If you tab on a coin and go to the analysis tab, you can learn a lot about them. The other tabs are useful too.

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Thanks @bullhashbear, coincheckup.com is good tools for analysis

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thanks for that info

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i like using coingecko.com. it has a ranking system for cryptos and basic info about all coins and links to related websites.

I totally agree with no 2. Yet I need this timely reminder. Thanks. When I was new and naive in the cryptoland, I invested in a few ICOs. Nothing much has come out of it.

Thanks For Golden Rules Of Cryptocurrency Trading.

Unwashed human, your article does provide some very simple advice however is not of a standard of quality that would be expected for such a large payout.

Be ashamed of your blatant use of voting bots and be prepared for the incoming flags that such a poor production surely deserves.

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For real, plus to toss in that crypto has no underlying asset is troubling at best and shows a clear lack of knowledge of the core technology at worst.

  ·  last year (edited)

One of the best article about crypto trading for beginners and long term investors. staying updated with this kind of post. it can help you learn crypto ups and downs.....
By the way you're really true when you say it's better to

Invest what you can afford.

Because you can’t invest in Bitcoin at all if you only have 2 months expenses saved.

  ·  last year (edited)

I’d add only buy what people need now.
Dex, privacy currency, ico platforms, borrowing, blogging. Things that are too far out will be disappointing.

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Where do you stand on some of the AI coins on the horizon @ender? They are speculative but some may not be too far out and if they deliver can be game changing.

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Definitely too far out. We need things like games, trading, store of value, stable coins, confidential payments, fund raising for tech, borrowing, maybe kyc maybe twitter, Facebook, d tube.

Vapid idiotic platitudes.

Dont invest more than you can afford to lose - that applies to lottery tickets.

Completely stupid comment for INVESTMENTS.

You forgot HODL HODL HODL.

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exactly when crypto market is getting bigger but HODL with strong coin which has good fundamental

You have put things in right order. 👍

This is a common mistake

  1. Never invested in Initial Coin Offering (ICO), unless you are ready to lose your investment

While i agree with some of these points....dont you feel that entirely writing off ICO's is a bit alarmist? Theres been many shady ICO's but with proper due dilligence most are easy to spot a mile away. Not to mention, ICO's can still certainly be profitable, especially in the long term if you are investing in a solid project with a realnlife use case. Then again though, ICO's really shouldnt be on a list for traders as they arent truly a trade and should be looked at as an investment

The other issue is the underlying asset. I cant disagree more with the assertion that there is no underlying asset in cryptos.
Bitcoin may not have an "underlying asset" besides a store of value but many others do. For example Ethereum's Network, ERC-20 standard, and smart contracts are all "underlying assets" which add monetary value to it, and its valuation is clearly not dependent in any way upon the initial capital of the project or its development costs. The same can be said for civic or any other crypto with a utility token that actually leverages the use of the blockchain in a manner that it gains an actual advantage over existing products or systems.

Not meaning to be contrarian, i just feel its a bit of a shortsighted view on blockchain technology, seemingly framed in the mindset of cryptos being nothing more than a "stock", not the vehicles of data distribution they are implemented as.

i appreciate so much!

Great article, thanks for sharing. I've smashed the upvote button for you!

I think there needs to be more articles like this, for the newcomers of the crypto world! Mass adoption is where crypto's power will come from!

Also, if you are looking to get some tokens without investing or mining check out Crowdholding (https://www.crowdholding.com). They are a co-creation platform were you get rewarded for giving feedback to crypto startups on the platform. You can earn Crowdholding's token as well as DeepOnion, ITT, Smartcash and many other ERC-20 tokens.

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hi @pheonixdown-dee thanks for your https://www.crowdholding.com information

Also (blatant plug incoming) make sure you use the right tools to track what is going on with your investments. Web based portfolio tracker

  ·  last year (edited)

Good posting, I am a beginner on cryptocurrency investment . This posting is helpful for me. I agree with your advice. Thank you!!

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I'm responding here because @leeyoon is a beginner to investing. So maybe adding here to the thread is the right spot for me now. I'm not investing yet. But I am intrigued by the concept of crypto. I'd like to be pointed in the right direction of an overview so I can ask better questions. Then start an investment plan.

Buenos días @redstrawberry ,muy importantes tus consejos para los principiantes de este mundo de la criptomonedas ,lo tomare en cuenta,esperare tus actualizaciones para seguir avanzando en este tema saludos

Good morning @redstrawberry, very important your advice for the beginners of this world of the cryptocurrency, I will take it into account, I will wait for your updates to continue advancing in this subject greetings

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Thanks @maggy7419

Good post. A few times I have considered a coin because it sounded great, then after a bit of research I learned it was not so great, shady stuff happened, it wasn't legit/almost dead, etc. So number 6 definitely helps.

Another is don't get caught in FOMO (Fear Of Missing Out). A few times I have seen a coin getting hyped, growing, etc and bought. Then it dipped and downtrended soon after. Try to get in early based on news and speculation. If it seems like it might be too late, it probably is. This isn't true all the time, but it helps to be cautious.

I think it's an excellent material. more than anything for people who are starting in this world of cryptocurrencies! congratulations!

Nice post, but I don’t think the market cap of a crypto correlates with greater opportunity, in fact I would argue the inverse is true, that a low market cap coin has a greater opportunity for percentage gains because they have so much more room to grow compared with the larger cryptos. The low market cap coins are more risky but will offer the better percentage returns

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Yes @seagull10, I absolutely agree , actually this post for beginner who start trading and the objective is to minimize risk, low market cap high risk high gain

which the best one on this cryptocurrency?
steme post 1.jpg

choose the coin which is great than for you?
.steem
.onecoin
.dagcoin
.BITCOIN
please comment.

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Dear @kevent1, i have mentioned in my post, I only trade top 50 capital market listed in coinmarketcap, and when I have to choose what you write only bitcoin listed in top 50, It does not mean that steem is not good, steem is good but i need liquidity because i am trader not investor i have to choose high market capital

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@strawberry, can you teach me the elementary of cryptocurrency the way you have written here? Can we meet outside this platform to chat more. I am planning on something fantastic and will include your name if you will like it. Can we chat on messenger?my steemchat is not working.

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doge

The market size seems to be what most people forget when it comes to crypto and how wildly it swings back and forth with only a few transactions. Only showing up that is could easily be a highly inflated value.

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That is the challenge isn't it @swiftpain -- there really isn't a substantiated method or historical corollary to make a reasonable valuation. There is a path to 0x as well as a path to 1000x for many projects. I would argue that the only viable investment options are to, one, buy and hodl without even looking at the day to day market swing -- the class, buy and forget about it for 10 years, or two, run an extremely discipline trading plan taking asymmetric risk and locking in gains early and often.

Good article with useful information.

But what do you think? It's worth to invest in STEEM?
I've never invest in any crypto, and I wouldlike to invest some money (not much, I don't have even a job, still learning) in cryptocurrency, and I thinking about STEEM, because I use steemit.
What do you think? Is STEEM going to be more expensive soon?

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Hi @mrowkarz, thanks for your question,
STEEM is the best invention of blockchain for social media and blogging. What makes price rising is supply > demand, I am sure steem will be more expensive because number of user is increasing, they need steem to promote their post, they buy steem because steem is real application that works

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Thanks for the answer!

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hi @mrowkarz, thanks for your comment, I am a trader and I only trade top 50 capital market listed in coinmarketcap. Steem is great for investment but I am looking opportunity for short term trading (daily to weekly trading). I believe that steem will rise.

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I guess Steem will not go above USD 10 by the end of 2018.

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We will see what happens . Only time will tell .

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Indeed

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Do you have a reason for your analysis? I'm not saying that it will go above $10, just that if you make a statement like that I would like to hear your analysis on how you came to that decision.

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Hi @jmjury It's based on my gut instinct. We could actually hold a crowd forecast on the prediction of maximum and minimum price of Steem in 2018, that would be interesting and more informative.

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I love your idea of a crowd forecast for a wide array of crypto prices. Do you know of such a platform to do that?

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There's a platform called Estimize which constantly 'crowdsource' forecasts of users on stock prices (mainly those in S&P 500). I had suggested them to include some of the most popular cryptos but they haven't done so yet, maybe lack of resources to do so.

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Think it will if you want to invest keep your money in the community buy some of their stock. I'm going to buy some and trade it if it goes up you make money and can sell buy back in or you can leave it. I haven't watched it to much but see daily how it trades and check out binance if you go to my page there is a link

very informative. you got most of it but not all.
might also consider coin usability factor and future utility factor.

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hi @sinkfish, thanks for your feedback

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might also creator background, financial support of the team and company vision.

Thanks for this information.we should remmber and follow this rule.because bitcoin is a bless for us. Thanks agin.

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hi @joya360, thanks for your comment

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Most wolcome

Just 1 silver rule, if you decide to invest, you will need steel balls to HODL until you realize a meaningful profit

The best way! Thanks for Sharing. I need to know what to do and now i see the light. Regards!

Worth more than want i can describe

I'm fairly new to buying crypto but maybe its a case of potential reward to risk. I hold a few things in the top 50 but these have already gained 100% +++ before I discovered them . What about all those high risk but high potential gains for those new coins and tokens which offer new solutions ?

Nice this is a really good 1, well explained nd gramatically simplified. Thanks

Those are the necessary experiences, thank you for sharing with us

A good reminder, I also analyze the trend of digital currencies, I think we can communicate with each other

Hi Dear, Thanks for your valuable contribution!

Please share this documentary :)

https://steemit.com/bitcoin/@aro.steem/bitcoin-beyond-the-bubble-14aa9943ae2e3

Thank you!

Very informative. Thanks

To listen to the audio version of this article click on the play image.

Brought to you by @tts. If you find it useful please consider upvote this reply.

I stumbled upon your post earlier and also saw this article right after. I'd like to ask, do you have any reference that I can refer to when starting to learn trading with crypto? I'm really a noob in this scene..anyway, thanks for this post! followed you as well

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hi @iammegankylie, i was started my journey as currency analyst at forex broker and I love forex trading, I learn philosophy of trading and technical analysis from Alexander Elder's book (Trading for living). Forex and cryptocurrency is different but technical analysis can be used for both. You can start buy small amount of cryptocurreny and forget it in few months. ;-) Amount that you can afford to lose.

I have followed you back thanks

Wow bài viết thật là ấn tượng

cảm ơn những lời khuyên của bạn
chúc bạn thành công

Well said. When i started invest bitcoin was only 1600$ but today ? But i got out from the market with a huge loss. That was a turning point in my life

When you follow this rule you never loss in crypto ...

The number 3 is a good point. I think it's very important to know if the developer has enough funds to realize the roadmap because if not, then it's just a foolish dream and waste of time.

You got a 9.09% upvote from @postpromoter courtesy of @rosecute!

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Golden rules indeed, and everyone will figure them out either by experience or learn it the hard way.

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thanks @bitcast

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No worries, by the way do you do daytrading on cryptocurrencies?

This post has been shown by @wishmir to 40+ followers. Please check the @wishmir page

Thank's for the content. What's your opinion on BCH and the hard fork on the 14th May?

I never really understood how your first rule worked until recently.. I had a friend panicking over his position where he was trying to in essence short term double up the money he needed for a wedding. He ended up having to emergency pull out his money at a 60% loss in February purely because of a bad timing issue and needing a down payment. His situation rekt his portfolio even though he knew it would turn around weeks after he sold. So true.

Thanks for that @redstrawberry. It was useful as I am itching to start trading..

Words of wisdom on crypto currency trading...
So concise and explicit.
Nowadays, cryptocurrency market is growing up, it's good sign for crypto trader and holder.Point 1 is important for all crypto traders especially for beginners.
Thanks for this information.

excellent publication

I am waiting for the satoshi for us, when satoshi is present

Excellent post dear friend @ redstrawberry, congratulations on this great research, thank you very much for sharing this information.

Hello! Good article! I'm interested in the them of ICO and crypto-currency, I'll subscribe to your channel. I hope you will also like my content and reviews of the most profitable bounties and ICO, subscribe to me @toni.crypto
There will be a lot of interesting!

Great ... i like to know you ....

Great tips. All very important to decipher when trading. @redstrawberry

It is very important to remember the above points which are rightly mentioned by you. Blockbasis would suggest all cryptocurrency enthusiasts to have these up on their walls as 'cardinal rules of cryptocurrency' :D. In the meantime, check out [Blockbasis]((https://blockbasis.com/), where you can send and receive crypto using only an email and trade cryptocurrency at a very low cost.

Agree with your article, thanks for you valuable post. Day by day cryptocurrency market is growing up, it's good sign for crypto trader and holder.

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You're most welcome @naser-ab

You forgot that within trading in a big exchange, they should be supported by a hard wallet, that way there's more "certainty"

And a #GOLDENRULE is ALWAYS, ALWAYS, ALWAYS use stop/loss!!! If you are going to trade, tradesmart! If you don't mind some dips and you are a hodler, you can skip this rule (except for mayor dips... the idea is to create wealth not for it to vanish).
Money tree edit2.jpg

Those are some realistic information, which is need to follow for every begginer. I liked it very much. Every opinion and suggestions are best.
Yet, i want to add one / two more....
Don't be greedy, greed will destry you.
Don't listen to the rumors.. will be higher 300% next month.like this.
Study and analyze the market yourself as much as possible.
Study and study on the coin you want to invest.
Good luck to all of you.

Hello @redstrawberry, I see you mentioned Verge as one of the currency you trade. Is it a good coin to invest in. I'm a newbie.

Thank you @redstrawberry.actually I fell short of rule six several times.it really dealt with me and am still paying dearly for it.another one I fell short of is investing in ICOs which I actually thought would favour me since I had some good breaks in shares i bought in some companies.
I wish i knew this earlier.kindly write more on these to help others.

Those are all good points, I would also add in "diversification is key" never put all your eggs in the same basket. And always do your own research and take everything you read or hear with a grain of salt until you can verify it yourself.

I'm writing crypto trading articles. Will you please support me?

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what trading g article? If that is useful to users please share and post~

Great post but don't really agree with the ICO point. I think it's an amazing way for new startups and it eventually supports​ the blockchain and crypto revolution. Just dyor and make sure they have good​ ratings on for example icobench.com where you can check their team etc.

good basic rules for newbies. could have included a little about security and wallet storage, and to avoid storing coins on exchanges.

Yes, if you do invest with money you can not loose, you will make decisions based on emotion, and that is tricky..

i think, managing funds is the most importance. You can trade lose, you can choice wrong crypto, but you can't manage funds that's miss all

Bitcoin can go up to hundreds or millions of dollars over the next several years, but it can also be zero at any time, so keep your balance between Bitcoin and your current life. It does not affect the present life, the life is still beautiful, the moon is still, but if that happens, it will be a worthy achievement for the faith, the effort that you have spent in it. year.

Nice post. I agree, everybody who wants to get involved with cryptocurrencies needs to follow these rules! It is still a new, unregulated, and mysterious asset class. Good reminder to be cautious!

Really impresive knowledge, Thanks :)

No worries. Satoshi "Scrotumoto" has a plan... And it's parked "somewhere" in his $BTC Kimono!

hey help you make money on steemit.. thank you

Words of wisdom on crypto trading...
So concise and explicit.

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Thanks @aerick

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Yeah
You are most welcome.
So can I learn some tips from you about Crypto trading?

You got a 23.07% upvote from @upmewhale courtesy of @rosecute!

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Good to be reminded of it. Have a variation of the points I usually tell others who are interested.

"So concise and explicit."
Nowadays, cryptocurrency market is growing up, it's good sign for crypto trader and holder.Point 1 is important for all crypto traders especially for beginners.
Thanks for this information."

Congratulations @redstrawberry!
Your post was mentioned in the Steemit Hit Parade in the following category:

  • Pending payout - Ranked 9 with $ 435,8

Great friend you gave the 7 more excencial, this world seems easy but it is nothing. in some way it is deceptive. Many people want to get the reward offered by being a good trader, without being willing to suffer the commitment and pain that this entails.
There's a well-known saying in the world of Trading

It does not matter at all if you are right or not. What does matter is how much you earn when you are right and how much you lose when you are wrong