Hello Steemians,

This is my homework task for The Steemit Crypto Academy Season 2 Week 4 by professor @fendit

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Trading is all about buying and selling coins in cryptocurrency and thorough research is required two minimize the risk and losses. there is no shortage that we always trade with profit because the market is unpredictable completely and based on some technical analysis we try our best to ensure that risk portfolio is a less and higher probability of profit with trading.

Question A)-

My Answer-

In this situation, Bitcoin price was at a peak with the price of $64854 that fell to $54585 that quite a huge dip. In the cryptocurrency market, we can easily see this kind of deep in the price so the best way to encounter these drops we must do the study and check how the market is doing.

Bitcoin dominance is one of the important thing which as a trader I always keep an eye on because if it keeps on going that means more people are buying the Bitcoin which is a signal that prices are expected to go high. when Bitcoin dominance is going down that clear indication that prices will go down because investors are coming out of it and it's the right time to convert our Bitcoin to USDT if you want to reduce the loss. Bitcoin dominance can be tracked easily on coinmarketcap website on the top find tracking of overall volume also helps to decide the same.

These days I'm not buying Bitcoin because I think that altcoins are giving better returns and that is why I'm more focused on it however when I trade then I do thorough research before putting a buy order of Bitcoin. it's always suggested not to enter the market when Bitcoin price is more than 10% up in the last 24 hours because this could not be a right entry and whenever there is a deep and price it's showing in red then I jump in to buy.

I follow stop loss all the time whenever I trade because this way I can reduce my losses when I am not available in front of the trading window. also when I see a dropping trend in the price of Bitcoin then I prefer to convert in USDT. I'm a long-term investor and I don't prefer to sell Bitcoin at these prices because I believe things can be significant in the long run so conversion between Bitcoin and USDT depending upon the situation is a good idea.

Stop-loss is a way those are huge loss and as an experienced trader, I always prefer to use it with all my trade because this way at least I know if things do not go as I planned then how much I am going to lose. I never do emotional trade when I see that prices are booming so I try to stay away that moment and wait for the right time to enter because in the market anything can happen and doing emotional trade is never suggested.

I also follow a simple trading rule that has worked well in my case bat when more people are selling then it's the right time to buy and vice versa.

Question B) Share your own experience when it comes to making mistakes in trading:

1- What mistakes have you done when trading and what did you learn from them? If you have little experience when it comes to trading, tell me if you got to know about someone else's experience.

Every new trader does mistakes in trading and I am not the exception. I entered in crypto space in the last quarter of 2017 that time bull run was already started and the Bitcoin price was going high and high. since I was new in the market and was not aware of how things work over here so I purchased Bitcoin and some other coins at the price of the peak because there was news that prices are expected to go even higher. I purchased Bitcoin at the price of $14,000 to $18000 that time. on a sudden market, it started crashing and I realize what mistake I did. Since I was new in the market so I did the mistake but then I decided not to sell any coin on the loss because I believe there is no loss unless I keep the holding with me. I did some research on the market and spend few months understanding how things are working with the crypto market which ideally I should have done before investing but this was my mistake.

During my research, I realized that I entered the market at the wrong time and that too without any proper research which was my mistake and I took the corrective measure. I learn from my mistake and decided to hold all my holding until the prices come in my favor and the period was five years for that. now after three years, I can see a significant profit with my investment even with the coins that I have purchased at the peak of that time. The reason behind this is simply because I did not sell off anything. Panic selling is something that brings us loss for sure and the only solution to overcome the problem is to hold for a long period. I came in the crypto market to become a millionaire or the night but then I realized I was wrong anything requires a good amount of time to grow which I follow is strictly now with my investment. my average buying was about $16,000 in 2018 and now one Bitcoin price has gone up to $64,000 so obviously, my investment is now four times in a period of three years which is just amazing and I can't think of more than this.

I was a traditional investor and with banks, I was getting almost 6 to 7% annually but here my investment got multi-folded in a period of 3 years and the only secret that I followed is to hold for a long time I never cell anything on the loss.

In 2017 when I was new in the market then I got to know about some of the projects which were offering their native tokens and they were paying some daily return if we deposit these tokens known as coin mining. there were some vendors who were selling on behalf of the company and it was the time when ico's were also quite popular. I spent some amount with few other projects because my friends were involved in the selling and I could not say no to them. I did invest some amount and got some coins that I deposited with the company. I was getting a good amount of coins every day after the deposit but when these coins were listed on the exchange the value was two less and because the project was not strong so after a few months it was closed an even website was down so I lost all my coins and there was no way to recover my money. It was a kind of multilevel marketing concept when I got some referral coin when I refer some of my friends but although gather all the money was gone.

It was another biggest mistake that I did because I lost my money as well as I invited some of my friends who also lost their money and the only good thing that I did was I started with a small amount of money. money is money and any amount matters to us but it was learning that in the future I will not be part of any project which is not reliable and not strong enough. Also, I decided not to invest in any project that offers a regular ending because the company tries to get the money through this way however investors are in a higher risk and so far I am consistent with my decision.

2-Which of the strategies discussed in this class you find the most useful for you? Why?

This entire class is quite knowledgeable and there is a lot to learn about the trading but is still one of the things that I liked most is Revenge trading. since I already follow stop loss and never do emotional trading and also don’t follow FOMO, so this is one thing that I am going to add in my strategy.
This is true that sometimes when we invest in the market and things does not go the way we want then it feels like a lot of pressure on us and we tried to put all money that we have so that there is any chance we can get our money back and also expect some profit over it but the reality is that it is too risky. because of this way money traders preferably new in the market lose all their money and left with nothing in their hand. This is why our research and learning about the market is quite important because we can minimize our losses. I understand that there is no surety about profit but at least this way we can reduce our losses and avoid a situation where we lose everything we have with us.
The crypto professor has nicely explained about revenge trading and I know there are a lot of traders who do this way even I did it some time back but now I have realized the consequences for doing this way of trade so for sure I am not going to use it ever with my trade.

Question- C) Place yourself in the following situation:

You're browsing Twitter and you see this:

These days we can see a lot of tweets like this where popular celebrities or the richest people in the world are talking about certain projects and this creates a lot of hype in the market where people run behind such coins to buy. Like in this Tweet Elon Musk has talked about that people now will be able to buy Tesla cars with Bitcoin which is a good thing since they have given another option to pay for their cars and it will certainly create more demand for Bitcoin in the market.

I won't buy anything because as I already said I buy when people sell and after this tweet, many people start buying which is not my way of buying rather I prefer to buy when people are selling and I see the market in red color. Its risky but so far it worked for me.

Another example is dogecoin where Elon is also shared similar tweets and that is why now dogecoin is more than half a dollar whereas this project has no foundation at all and literally there is no use case of this coin in the market.

These days cryptocurrency projects and traders follow Twitter closely and many times they follow the trend that is shared on Twitter but I do not run behind this kind of updates and never buy coins based on such news. it's called sentimental buying which I generally avoid and my focus is to work mostly on fundamentals to understand the coin and project 1st and if I found it worthy then I invest.
Like I mentioned about doge I'm looking at the amount of hype in the market it can go $1.00 or even more than that but since there is no solid foundation so I still won't invest in this coin.

I understand that sometimes because of this news we get the opportunity to make money but in most cases, this can bring huge losses to us so I generally don't run behind this type of news and I do all my trades based on fundamental since I'm not very good at technical analysis. so far my fundamental analysis has gone right and all my investments are in profit because I also do long-term investments and I generally avoid a day trade where I buy it some time and sell at the closure of the day.

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Conclusion

Overall, I enjoyed the class by professor @fendit find there is a lot to learn about various aspects of trading in the crypto market. food things like revenge trading and stop-loss is the kind of thing that every trader must consider before doing any trade because this can be so helpful to avoid the losses and if we follow these tapes then for sure we can say we are trading smartly and wisely. trading is easy and difficult depending upon the way we trade so if we follow all the ways that are suggested in the article then it's quite easy and profitable but at the same time if we do not follow it then it can be lost full as well.

Thank you so much