Lessons from "An altcoin trader's handbook" by Nik Patel

Lessons from "An altcoin trader's handbook" by Nik Patel


For those of you interested in actively trading cryptocurrencies, you've probably realized by now that most trading books are about conventional markets such as stocks and futures. Fortunately, this is not the case of "An altcoin trader's handbook" by Nik Patel. In the book, the author first starts by reviewing his journey as a trader, recounting his failures and following success. He then proceeds to explain his trading strategy in great details by explaining precisely how he uses fundamental and technical analysis for his trades. I think this is a great book to open one's horizon about the very big opportunities that are available in this market. Also, for newcomers in the space, it is a great way to learn how to better analyze this market and individual cryptocurrencies.

https://www.amazon.com/Altcoin-Traders-Handbook-Nik-Patel/dp/198617011X

Here are, in my opinion, the top lessons to be learned from from his journey as an altcoins' trader:

Psychology


"...psychologically, it is much less detrimental to begin again, so to speak, than it is to attempt to recover what has been lost". Here he is saying that after a big loss of money like most traders experience at the beginning, it is often better to pretend you never had that money in the first place. I think it is a good idea because psychology will either make you or kill you as a trader.

"This is too easy" This is what Nik was thinking after a couple months in the markets and this is a common flaw for most traders - to consider yourself a godly speculator after a streak of winners. Obviously, this is the beginning of the end if you somehow end up thinking that you "cracked the code". Pretty much everyone is thinking along these lines during the bull market and the ensuing bear market will bring with it many lessons of risk management.

"Those who have a firm grasp of their emotional responses can utilize the surge of positivity one feels following a win to influence activity levels: for example, after a profitable trade, you will likely feel more spirited and perhaps more enthused." I think this is a good idea to enhance productivity and catch up on work after profitable trades instead of focusing on these past profits.

"Darkcoin brought anonymity to the table for the very first time in a serious way, and the effect that such a development had was tremendous" Sometimes we get caught up while researching different coins but we have to remember that the coins that will deliver the best returns are those that are proposing something new. Think smart contracts, anonymity, masternodes, blockchain compatibility...

Things Don't Change


"I had a few friends by this time on Twitter, and the discussion on Fluttercoin was much like that of the newbies of today; predominantly that the coin was going to moon" This was in 2014 and it just demonstrates that things don't change that much after all. We still have the "moon boys" chasing pumps and then get caught in the dumps by doing so while the more prepared traders take advantage of it.

"Rumours began to surface of all sorts: the adoption of Zetacoin as a national currency; the integration of Zetacoin with a debit card; major business partnerships in China" This is a coin that I had never heard of before but we can easily see that a lot of the same kind of rumors are happening over and over again with scam coins.

Managing Emotions


"Remember, newbies, that patience is the one thing that is utterly unteachable, and only manifests through experience" This is a simple reminder that patience is one of the most important skills of successful market speculation and just investing in general. Usually we want everything to play out quickly and this will increase the chances of acting emotionally and making bad decisions.

"when I saw price hit 30000 satoshis, I re-entered the whole amount. 1.5BTC back in at 0.0003BTC… what a stupid idea" Here we have a nice show of greed at work. Greed and fear are the two emotions ruling ALL participants of the market and ANY trader will experience these emotions over and over again. Of course, with practice and experience, it is possible to reduce these emotional reactions to price fluctuations by a lot.

"This was my first experience actively day-trading a position, and it proved to be far more difficult than the simple one-click buy and sell trades that I had been making thus far" Most new traders are attracted to daytrading for some reason and usually it's the worst to start with because it requires a lot of emotional balance, which new traders usually don't possess.

The Most Important One


"The one thing I will stress in any conversation with people new to the space, and in this book, is always begin with an amount that you aren’t scared to lose" Not a transcending lesson but perhaps the most important: only trade with money that can you afford to lose.

These lessons are from his journey as a trader. For the knowledge about fundamental and technical analysis, take a look at his book!


Posted from my blog with SteemPress : https://satoshi.blog/2018/07/17/lessons-from-an-altcoin-traders-handbook-by-nik-patel/

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