Homework for @fendit - Steemit Crypto Academy (Becoming a better trader)!

Thank you @fendit for your amazing lesson describing some of the common mistakes traders make, not only new traders but also those who have been in the game for a long time. I enjoyed your lesson, and here I am presenting to you my homework.

A) Will I go bankrupt because of BTC?

First of all, I bought some Bitcoin at 62k. Then a few days later, the chart looked in the following way.

This is a scary feeling. My initial investment is down by about 15%, and that is a lot of money in a few days. The immediate response is to stop the thing and make sure that you don't lose more money. As a result, many people are tempted to sell at a time like this, and I would for sure feel the temptation myself.

But, after reading the lesson from @fendit, and also based on my personal experience, I would say that this is one of the worst times to sell. One should take into consideration that it is Bitcoin we are speaking about, and not a "no-name" junk coin. A junk coin can fall 100% in a day, but Bitcoin doesn't normally do that. As a result, there are cycles, and there is a time to just hold, wait, and see.

First of all, when the market turns red, you can always know that a green candle is around the corner. I have experienced this several times myself in the last months, that instead of selling at the red candle, that is when I am buying more, and when it turns green, that is the time to sell.

Also based on your class, I would clearly say that having a stop-loss is vital if there is a limit to what sort of risk you are willing to take.

*Personally, I am no big fan of stop-loss, which I know is stupid, but still - I have seen so many flash-crashes, and they are perfect for activating stop-losses. So, the price crash down, and jumps back to normal within a few seconds... and I am left with nothing but a lower price due to stop-loss. In other words, stop-loss has to be used with care, because it might hurt you more than it is capable of blessing, at times!

B) Personal experiences and mistakes in trading

I have done so many trading mistakes that I have lost numbers, and luckily, forgotten most of them. But, a few general trading mistakes I have made is selling in the dump. That is, I buy on the top, and then when the price is falling, I get scared and sell out, only to see the price turn higher afterward.

I have FOMO-ed in several times, and I remember once buying NEO at $36, only to see it fall to $30 afterward, and I felt like crap. I then sold most of it, and later, NEO went to almost $200. Luckily, I kept some of them, but not at all as many as I should have.

An even stronger thing in me is what I call FoS (Fear of Selling). That is just as big a challenge for traders. You just don't sell, because you always dream that the prices will go higher. This is causing a lot of regrets afterward because instead of having actual profit, you just sit back regretting that you didn't sell. As a result, one of my greatest lessons is to make a plan and then do my best to stick to the plan, during both bear and bullmarkets.

Illustration from this article: https://steemit.com/hive-175254/@unbiasedwriter/overcoming-the-fear-of-selling-fos-my-way

Just like the course also dealt with over-trading, I believe it is important to be patient. When Neo reached almost $200, I did nothing. But, on the way down, I sold everything at $80. That looked bad for some weeks, because it jumped back to $120 after a while. I felt stupid again. But, in the long term, it was wise, because Neo went to less than $10 (before it started to increase again during the current bullmarket).

The most useful lesson from this class for me is the thing about knowing yourself. We have to learn to understand who we are and how we behave in trading. People deal with stress and ups and downs in different ways, and that is why we need to learn and understand who and how we are. I lack patience, and I want to buy everything now. In fact, I wanted to buy more Steem tokens here the other day, and the price was $0,93 per token. But, I told myself, that I will wait until the price gets closer to $0,8. After all, I was quite sure that the price would fall to that level sometime. And guess what, it only took a few days, and then I could buy some more tokens, and now the price has reached almost $1 at the time writing.

Of course, should I keep them or sell them right now? After all, I am almost in 25% profit?! That is a different question! :)

What to do with the Elon Musk tweet?

I have seen so many tweets. In fact, I was active back in the days when a tweet from John McAfee would make the price of a token go 100% within a few minutes. Based on that, I learned some lessons in an expensive way. Because, such tweets will make the price boom immediately, and then the price will fall back quite quickly afterward. As a result, if I saw such a tweet in the first second and were logged in to Binance and had funds ready, I would most likely buy at once. But, after 4-5 minutes, I would say that it is already a very risky business and maybe even too late.

A pump and pump tweet from John McAfee back in December 2017.

Of course, there is a difference between a partnership deal and just a "moon" tweet, so I would tread very carefully!

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I thank you once again @fendit for your lesson. I found it to be interesting and useful, and I hope you have found my homework to be satisfying as well!