Gaining a Trading Edge by Thinking a Few Steps Ahead (Part 1), and Avoiding Scams like BitConnect

in investing •  10 months ago

Why is it when prices go up 10 fold in a short period of time, most newer players in the markets simply don't find that strange or odd. Instead their reaction seems more like:

"OMG, I've gotta get in on that awesome deal... before it's worth 20x!"

Yet when it tanks 75% a month later, they're in shock, and bag-holding devastating losses.

If they loved it so much then, maybe that's the time to start buying up a bunch?! Of course, that's if they had even bothered to learn anything about what they're buying in the first place, let alone how it could be properly "valued", if at all. And for the record, "Price keeps going up, so buy buy buy!" doesn't cut it...

🕺 Naaaaah... let's just wait to buy back in when "all the ducks are quacking again"! 🕺

hodl-train.gif
(all aboard the HODL train...!)

Focus foremost on managing risk, and the rewards will come

Everyone's heard the term "don't invest more than you can afford to lose". But that only seems to apply to the other guy, especially when prices keep going straight up. Investments can't do that unless they're real, right?! All paths in life move in a straight line, there are no cycles. Everything goes up in a straight moon shot, never to return!

And using the term "investment" for most things, certainly in crypto-land, is an oxymoron in itself. These are all speculations, especially when people are risking way more than they can afford to lose. The problem is that everyone starts focus on the "potential rewards", without a second thought to any of the potential risks and uncertainties. And for any trader worth their salt, that's the most important part.

Focus on managing the risks, and the rewards will, over time, start to materialize. Do the reverse, you might get lucky once or twice or even three times, most likely to your own detriment, as you then go ahead and leverage your home to cash it in next month for a mansion! (btw, hope you'll also make enough to cover the expenses on that monstrosity as well!) But, why worry about keeping a manageable "nut" (ie. risk management), when we can just rake in some more of those crypto millionaros! 😎

As I often tell people, to me pricing is generally arbitrary and illusory, and subject to people's whims and confidences. And what many still don't quite understand is that even assets considered to be the safest of investments (upon which a rough ROI can actually be determined) can also go down 90% in value. If that's the case, don't think for a second that can't happen with your "shitcoin du jour".

Don't think your house or your even your government bonds can lose 90% of their value? Time to brush up and study a bit more history...

Why people even buy government debt is unexplained, for lawyers take control of government and pass laws that elevate government to “quality status” when in fact it is unsecured and has typically resulted in the total destruction of capital formation. When the core economy is involved, such as Rome, the resulting episode is typically a Dark Age.

Link: Greece 2017: Sovereign Debt Cycle

Anyway, just remember it's not a loss until you sell.... or until you run out of money to pay off your mortgage! lol

Yet... BitConnect... 😱

Yet, some idiot will go on and bankrupt his family by "investing" $500,000 into BitConnect, which has countless posts on STEEMIT alone calling it out for the scammy ponzi scheme it was. However, somehow all these people are now devastated. How can there be no recourse, they ask?! The government's gotta go after these people and help us!

Here's a great video by @dougpolkcrypto, which includes a "post-mortem", and who also warned of the BitConnect ponzi scheme: "The BitConnect scam is DEAD. What happens next?". His earlier posts calling out BitConnect were also downvoted by BitConnect groupies "investors" for calling it out for the scam it was. Here's the video:





("I don't want to believe the world is so corrupt." <--- really??! then why are you into crypto in the first place! Just go back to "trusting" your friendly local government!)

Link: Bitconnect bagholders having their savings evaporate before their eyes.

Crypto tips.... pleeeeeeeeease?! 😁

I can't tell you how many people I've tried talking sense into in the past few months alone, both directly and through some of my recent posts. But truth be told, few people rarely take the time to really listen and learn, despite them asking for your "advice". People will do what they want to do, and they'll believe what they want to believe. And they'll go to untold lengths to convince themselves of their "delusion", literally sounding drunk in the process... lol

For example, upon recently ripping apart a bunch of crapcoins presented to me, I was greeted by this response:

MISTer DOOM and GLooM COIN
I want to hear something positive from you... for once......
If you are negative all the time you will Attract that... Just sayin!

I responded:

your naivity is so cute lol
that's also what people called me when they asked me if they should invest money with Madoff. Hmmm. haven't heard from any of them lately, maybe I should reach out to some of them and see how things are going.

More recently, after the crypto world's slight return to reality, I wrote the following...

wow, didn't think all my negativity could do that...! 😮
oddly, however, I am now starting to feel a bit more positive! 😂

Even more odd is that they'll ask for "tips". If you have to ask for a tip, GTFO and save your money. If you're really so anxious to lose it all, how about you just send me half of it, let me take you out back and kick you in the ass, and let's call it a day. That way we'll both come out ahead! 😃

As I wrote in another post a while back regarding stock and crypto tips:

"I'll point people towards what I find "interesting", but I've learned long ago that "stock tips" almost never end well. It's up to each of us to "pick our poison". And I'll guarantee you that if I told people I'm "loading the boat on STEEM" while it's at 10 cents (based on my risk criteria and time horizon), there will be some bozo who will come back hating me later, crying how my "advice" got them 100% long STEEM at $3 bucks for a short-term trade, and now they're sitting on a 60% long-term capital loss."

Link: Did Brendan Blumer (EOS) just say Bitcoin is an ICO at NYC FinTech?! Not quite, but sounds about right!

Stop relying on others, and study the markets!

Here's one tip, however, that I will repeat to no end. If you do want to learn more about the markets, start by reading "Reminiscences Of A Stock Operator". Even discussing markets from over 100 years ago, the knowledge is still as prescient today as it was then. I've read or listened to it over a dozen times, and I find something interesting that resonates for me each time, as my own experience accumulates over the years. For those who are relatively new at trading, if you haven't yet read it, perhaps you'll find it insightful for yourselves as well.

Link: Reminiscences Of A Stock Operator (PDF)
Link: Reminiscences Of A Stock Operator (AudioBook version on Spotify!)

Sadly, however, I can also say that for all those who've asked me for "tips", I can probably count on one hand those who've actually taken my advice and gone ahead to read this book. 🙄

There's also been a number of posts that I've authored right here on STEEMIT that can also help you gain more insight into how the markets work. Here's another one you just might want to take the time to read, where I also talked about how I missed buying more STEEM at around 7 cents, while others were panicking out: "Seizing Trading Opportunities through Market Panics and Capitulation".

Do I still have your attention...? Then stay tuned for Part 2! 😀 And boy do I have a few more "tips" for you. But be warned, they'll be more of the following nature:

Give a Man a Fish, and You Feed Him for a Day.
Teach a Man To Fish, and You Feed Him for a Lifetime.

If that sounds too boring for some of you, feel free to step right along. There are plenty of shysters out there ready and waiting to pump & dump you out of all your hard-earned crypto (the bunch of "lovely souls" pumping BitConnect on STEEMIT come to mind). However, if you made it this far into my post, you just may be one of the few that makes me feel it was worth my time to write this up, and Part 2 as well! 😀

As always, I appreciate your upvote, your follow and all your comments!

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  
·

You're so nice for commenting on this post. For that, I gave you a vote!

·

ummm, you do realize I linked to complete free copies of both the PDF and AudioBook version of the book in the contents of the post?! lol Same link as I've also given to you about, say, a dozen times already! So, have you read or listened to it yet?!

Hmmm, lemme take a private guess...! :D

·
·

It's just an upsell on Spotify Alex...

·
·
·

try signing up for a free account...

Lucky for scammers, there's always a new sucker that will chase fast money...

I will say, after reading your article, I now have a hunkering for chicken nuggets.

·

that's funny ... I think there's a bunch ready to be eaten, though they seem to be littered all over the floor! lol

·
·

Are there packets of sweet 'n sour on floor too? If so, I'll just go by the 5 second rule :D

Mmmmm... nuggetz... So wrong yet so right...

·

The 'Greater Fool' Theory, always plays out.

·

You literally made me want chicken nuggets. LOL

·

There's a sucker born every minute

PT Barnum

Hold up, BitConnect promised 40% returns a month and found people dumb enough to give them money?

That's the Nigerian prince scam of 2017-2018 -- such a ridiculous claim that if you take it seriously for a second, they can sell you bridges for a lifetime.

2ZTEqTo.jpg

·

but hold the phone a sec, they had "magical" Trading Bot algos! 😯

·
·

"Magical trading bots" with Guaranteed returns ... just sound too good to be true!

I totally agree with everything that was said in your post. You can tell people one thing and they will hear what is ''good'' for them.

Also, crypto markets are so volatile that by the time you give someone a ''tip'' to buy STEEM at 10 cents, the price is going to be different, and if they also want to think if that investment in the coin is smart (and they think for a couple of months) time is going to pass and prices change.

People like blaming others, it is our nature. Admitting ones mistake is hard and blaming others is, well... easy. ''Alex forced me to click on my mouse and buy those SBD for 15$''! :D See, that was easy! But that is also not a real advice.

Plus, most like to jump on the train when it is moving full-speed. Well, if you do that, more often than not, you are going to be a roadkill rather than a passanger.

·

exactly @lindahas, all the more reasons giving "tips" generally always leads to more heartache for both parties. People generally rather blame others for their failings than themselves.

What many don't realize is that there's nothing wrong with failing, or losing. I do it all the time. The key is to keep at it, to keep going, and focus on keeping your "losses" relatively small when you have them. Then, every so often, you just might smack one out of the park, generally when you least expect it. And if you can focus on keeping those, the rest should just work itself out in the long run! :)

·
·

True! And it seems to ruin friendships. Where money is involved, people are very sensitive.

It is good to fail because we only learn from our mistakes. Somehow, when others fail, we think that the same can not happen to us and the lesson gets ignored. It is good to get hit once in a while, makes us smart and not so brainless as there are solutions that need finding.

·
·
·

agreed on both counts lol and yes, as for friendships, it also often becomes one of those "damned if you do, damned if you don't" situations too... lol

"Focus on managing the risks, and the rewards will, over time, start to materialize."

Really good advice there man. I do wonder what will happen to those BitConnect shills. Maybe the dangerous people in Crypto might take care of them first.

·

Yeah, ideally it might be nice if "Crypto Nick" paid 'em a "visit". Sadly, though, they'll probably just move right along and focus on luring new suckers into their next "get rich quick" scams, since that's how sociopath scammers go about "doin' their thang"...

Link: Craig Grant & Yuliana - Bad, bad people -Exposed!

I am not use to crypto except for some. I am in love with steem. I will stay with it even if it goes lower. I already new that bitconnect is a fraud and i did not invest in it when I was told to. i did not believe in it at all.

@seyiodus.

Yes you can tell who has been around and who hasn't. New people look and see green and think "oh that's doing well, I'm going to throw money at it." Seasoned investors see red, and think fire sale / discount. Managing risk is definitely one of the most important things. Anyone can make money here.. but who can keep it?

·

exactly @chasegapo, it's one thing to make some money, it's another entirely to actually end up keeping it...

Just like some people can sell ice to eskimos, I'm sure someone could come up with a Bernie Madoff coin call it 'BernieCoin' and make millions.

·

too opaque.. I think we should make it even more obvious. How about calling it ScamCoin or "ThePonzCoin"! 😂

Well said man. I got into crypto back in 2015 and still can not say I know how to invest. I simply got lucky that I was able to understand what made Bitcoin so amazing and chose to put a little bit of fiat into it each month. I could be richer but I did not want to end up in a sticky situation.

Thanks for the book recommendation. Downloaded it and will start reading ASAP. I am ready to be debt free and live my passions each day.

<3 J. R.

nice mate u got new fan here

Good post. In my opinion it’s not always greed that causes people to make these kinds of bad financial decisions. A lot of the time it’s desperation. So many people have big dreams and want to legitimately make a better life for themselves and their family. They end up listening to the wrong advice and betting the farm. Common sense goes out the window.

little worried about asian markets, good news is swiss opening new exchange safe heaven

Thanks a lot for your valuable post sharing....... i like this post. beat of luck my dear.....upvote and resteemit done

·

i avoid next time spammy post..please withdraw your flag...

and you wonder why he didn't remove his flags from your "spammy post"! lol

If you're actually serious about taking the time to learn how to better "succeed" on STEEMIT, I suggest you take a look at my recent post, "HOWTO Get Attention on STEEMIT without PISSING PEOPLE OFF! 😱".

Congratulations! This post has been upvoted from the communal account, @minnowsupport, by alexpmorris from the Minnow Support Project. It's a witness project run by aggroed, ausbitbank, teamsteem, theprophet0, someguy123, neoxian, followbtcnews, and netuoso. The goal is to help Steemit grow by supporting Minnows. Please find us at the Peace, Abundance, and Liberty Network (PALnet) Discord Channel. It's a completely public and open space to all members of the Steemit community who voluntarily choose to be there.

If you would like to delegate to the Minnow Support Project you can do so by clicking on the following links: 50SP, 100SP, 250SP, 500SP, 1000SP, 5000SP.
Be sure to leave at least 50SP undelegated on your account.

It’s hard to tell- I think 20000 is realistic in the near term

People are investing by FOMO to be honest.

This is interesting

craving for more will always find its way in some people's heart. As the saying goes "What Goes Up Must Come Down" this is always applies in every facet of life. Thanks for sharing this post.

Wow loved your post...loved reading it....it's amazing....thank you for sharing have a good day

Good read! Thanks for the info

It was something new for the user’s great work done ✅ keep it up 💫

Congratulations @alexpmorris! You have completed some achievement on Steemit and have been rewarded with new badge(s) :

Award for the number of upvotes

Click on any badge to view your own Board of Honor on SteemitBoard.
For more information about SteemitBoard, click here

If you no longer want to receive notifications, reply to this comment with the word STOP

By upvoting this notification, you can help all Steemit users. Learn how here!

Very well put. I don't mind saying that I was hesitant when cryptocurrencies arrived because, although I have a moderate risk tolerance, it's hard to gauge the market on these things. You should never put money you don't have in the market because there simply is no such thing as a sure bet.