Steemit Crypto Academy Week 12: Homework Post for Crypto professor @fendit | Don't get lost in the fuzz
Hello, Steemians. It's another precious time to learn at the Steemit crypto academy and I have learned from crypto professor @fendit as she discussed the topic "Don't get lost in the fuzz". There is a task associated with the lecture and I will attend to it.
Question A: Place yourself in the following situation: You bought BTC a couple of days ago at a price of USDT 62K. Suddenly, you see that this situation is going on:
A(i). What I would have done in a situation above before reading this lecture
With my little experience in the cryptospace, I would have waited for some time to be sure of the price behaviour before making a decision. I won't like to be a panic seller, take for instance, I bought the asset at 62,000 USDT per Bitcoin, I would wait for a short period of time to be sure if the market is going down or if there is tendency of another rise. If the markets goes dipper beyond 60,000 USDT per Bitcoin, I will sell it off and if I would be away for longer hours then I will put my stop loss in place to avoid big loss.
A(ii). What I will do now after reading this lecture
This lecture has shed more light to the precautions that I need to put into place to be safe in my trades and obviously, the stop loss feature is a great one to be considered. Considering I didn't plan to stay away for longer hours but somewhat caught up, and was unable to keep a track of the price behaviour of my asset having the market gone dipper before realizing it, that'd be great loss on my part and to avoid that, I have to utilize the stop loss on my trading as taught in this lecture to avoid big loss and wait for another time that market would be bullish and buy the asset again.
Stop-loss feature on Binance (Spot trading)
Question B: Share your own experience when it comes to making mistakes in trading:
B(i.) The costly mistake I've made in Trading
During my short time in the cryptospace, I've made a notable mistake and I will be sharing the experience here. Sometimes ago, I bought a token with the name Kleeka Token which rises from the DOGECOIN family and it was claimed to be able to hit the same target as DOGE crypto. This type of token looks promising and FOMO (Fear Of Missing Out) set in for me and I finally purchased the token with 12 USDT with the expectation of a massive rise to take my profits.
I was expecting huge profits but reverse is the case in my situation, in just one day, Kleeka token dumped so hard and the token that was initially bought worth 12 USDT hardly worth anything 0.01USDT at the moment. My loss could have been extreme if I entered the trade with huge amount of money. The screenshot of the current worth of my Kleeka token is shown below through the pancakeswap.finance where it was bought.
Kleeka dumped hard that its max (bought at 12 USDT) isn't worth 0.01 USDT again.
B(i.i.) What I have learnt from the mistake above
The mistake I made above has taught me some lessons. The first thing to notice is that, I opted in for token type termed Shitcoin which is highly volatile and a risky investment, so the lesson learnt from the mistake is that before I buy any crypto, I must have made proper fundamental analysis to get familiar with the issuer of the token, read their whitepaper to see the aim of the project, check the financial record of the company before drawing a conclusion if I would buy or not.
B(ii.) Which of the strategies discussed in this class you find the most useful for you? Why?
The strategy that works well for me the most in all the strategies discussed in the lecture is Never invest money that you're not willing to lose. Why is this? I found this special strategy most suitable for me as I won't be too bothered about a crypto trade as I would be comfortable with whatever the outcome of the trade is. An example of such strategy is the one employed in my trade mistake highlight at the beginning of this lecture, I invested just 12 USDT and when the asset dumped so hard, I could hardly worry about the outcome because I actually entered the trade with an amount that wouldn't shake me too much. In simple word, I love the strategy because all outcomes, win or lose would be a good one by me.
Question C: Place yourself in the following situation: You're browsing Twitter and you see this:
C(i.) What I would do in this situation before reading this lecture
My experience so far has revealed anytime a situation like above arises, it's usually a great boost for Bitcoin as the price tend to rise. Before reading this lecture, I would invest a risk capital that won't affect my overall capital if the trade goes wrong. In short, I would invest an amount I am willing to lose if anything goes wrong and no stop loss would be put in place at the initial stage as I expect the price of Bitcoin to continually rise in a situation like that.
C(ii.) What I would do after reading this lecture
After reading this lecture, I will still retain the strategy "Never invest what you're not willing to lose" thereby investing the little capital that can't harm me financially if the trade goes wrong and this time, I would put my stop loss into place seriously. This will enable me to have a good stop loss in place to cut my lose while I was away.
Conclusion
In cryptospace investment, traders should be sure of their trading strategy and put in place the necessary stop loss measures to make safe investments, and avoid big losses as the crypto market tend to be volatile anytime unexpected.
Regards; Cc: @fendit
Thank you for being part of my lecture and completing the task!
My comments:
Nice work!! I really enjoyed going through your post, you made very good and precise explanations on each task.
I'm sorry you had to go through the Kleeta Token loss, but eventually if it helped you on gaining experience and you learnt from it, that's something even more valuable than a huge profit.
Thank you for being part of the class, congrats on this work :)
Overall score:
8/10
Thank you professor for the review.