Mining Vs Trading
Inspired by the many articles detailing these subjects here on steemit, I have been cloud mining & trading for a month now and have learned many things about both.
Trading
Not for the faint hearted, the crypto markets are fast paced and volatile but if you watch carefully you will be able to see the peaks and troughs as they develop. Each coin does appear to have a pattern of its own and for obvious reasons it is better to invest in a coin which has an overall upward movement. Of course there are always going to be external influences which throw the pattern off its usual course.
Some people compare crypto trading to gambling, but I like to think there is some skill involved too, and I have done pretty well in my first month by sticking to one simple rule:
NEVER SELL AT A LOSS! If something dips below buy price, hold and be patient.
It is possible to earn money quickly here if you stay focused on the movement of many coins at the same time and keep moving your investment around.
For example, four days ago I had $100 worth of Bitcoin ripe for investment. The 'usual suspects' of the market appeared to be on a level so I looked around at the others and found a coin called Nxt which I have never invested in before but the coinmarketcap graph line indicated to me that it was on its way up. 24 hours later it had increased by 40% at which point it appeared to level out. So I moved it into Stratis which also appearing to be climbing. Stratis increased by around 40% over two days and then dropped a little yesterday, at which point I moved half into Litecoin and half into Dash which were both on their way up. After a growth of around 20% from both, I moved it back into Bitcoin which has since then grown by around 2.5%.
A most enjoyable ride of successful exchanges. And clear proof that money can be made quickly.
Cloud Mining
Ultimately, mining is a long term investment. You pay for your hash rate in your chosen coin, then sit back and watch a small amount come back to you each day. The number fluctuates from day to day but you can be certain that you will earn something every day.
I am currently mining four different coins and have invested a total $330. Each day I see a total return of between $0.80 and $1.60. Which is paid to me daily in Bitcoin. If these figures don't change too much, I will see my investment paid off within a year and the second year will be pure profit. My Bitcoin mining contracts are lifetime, whilst the others (Dash, Litecoin & Ether) are for 2 years.
So, I feel pretty confident that I will double my initial investment within two years. I have a Bitcoin wallet dedicated exclusively to my daily mining payments. This way I can monitor my progress without any confusion.
The growth of Bitcoin is assured, so the total value of this wallet will continue to rise over the next two years, meaning that my initial investment of $330 will be worth a whole lot more two years from now, giving the kind of return no bank in the world can possibly offer.
In Conclusion
There are risks in trading. Coins can unexpectedly plunge as Dash has demonstrated in the last few weeks. And lesser known coins may plunge, never to return. But there are risks too in mining, because the more people who invest into mining, the less of a return you will see. But counter this with improvements in technology, the rising number of miners may not affect your daily return at all.
Both mining & trading appear to work well as long term investments.
As a trader I struggle to hold a coin if it has risen above 20% and is sitting on a level whilst others are busy rising.
So for me the difference between mining and trading is that with mining you have NO CHOICE but to hold long. Which contrasts my trading practices nicely :)
I am trading on poloniex & bittrex and I am mining with genesis-mining.com
If this is something you choose to enter into, please use my affiliate code for a 3% discount on your contract purchases: wzrAS4
Thanks for your time. Hope you learned something.
And please leave a comment if there is something you would like to teach me. I am still just a beginner and very keen to learn as much as I can, as quickly as I can.
Let me guess, your with genesis mining. Just a guess, because the coin you mentioned are all in genesis. Genesis is the most trusted cloud mining today.
Agree..but try look hasnest.com and bw.com both base on China. Thank you for sharing Sam !;)
Ah yes, I started to look into hasnest the last time you mentioned it to me... but got distracted! I will check both of these out now. Thanks :)
Yes, I am. And great to hear that! I have watched a load of films made by unhappy customers so was a little unsure, though these films are mostly over a year old. So, am guessing things have improved :)
Nice set of trades you made there! I suck at trading so tend to stick to the long-term hodling / investing mindset, which has worked out fairly well for me. When I try short term trading, I tend to sell too soon or set stops which often get taken out, only to have the coin bounce back a bit later. Kudos to you for being able to surf the waves!
Many thanks my friend. I suspect it may be beginners luck, but long may it last :)
One point I forgot to mention is that I tend to sell when round numbers are reached. Quite often the value of a coin will suddenly drop upon hitting a round number, I assume because lots of people start selling at that point.
I must have read "Reminiscences Of A Stock Operator" a dozen times over the years; probably due for another "visit" lol
Perhaps you'll find it insightful for yourself as well...
https://archive.org/details/JesseLivermoreReminiscencesOfAStockOperator
Many thanks! Will check that out right now :)
Interesting on one aspect. Most traders will say set a stop loss level to cut loss.
I've heard that but not actually figured out how to do it yet! For now I'm okay as I am in front of my computer enough to not miss out on any action. Thanks for reminding me though. Must figure that one out ;)
figuring out is one thing . it takes discipline to be able to take the emotion out of a trade and do the cut loss - something i don't do very well too.
You and I both my friend. Almost impossible for me to take the emotion out of it. But so far the emotions have all been positive. Long may it last! ;)
Good)
thank you for your comment :)
Thanks for the info... I guess I don't really have the "nerve" for being an active trader; feels to much like gambling, to me. Which isn't to say that someone with skills and insight can't beat the odds. I'm really more of a "buy-and-hold" sort of investor.
In a sense everyone on this platform is already a trader as we have all invested in steem, hoping the value will go up :)
My brother in the States said the same thing to me today and compared crypto trading it to gambling. He is a poker player! The way I look at it, investing in a crypto currency which has a clear upward growth is a more sound investment than putting dollars in a bank, which over time are only going to be worth less.
But for sure your buy and hold tactic is probably the safest route. Especially if it is Bitcoin, which has had plenty of time to demonstrate it's pattern of growth :)
I have been mining all this while but lately I've started a bit of trading after making some neat profit with Ripple.
That's the way to do it. Step by step. Keep watching for the movement of the top 10 coins and you will know when to move it around.
Bitcoin is always going to be one of the best performing cryptocurrencies in the future to trade. Check out my blog for a guide for the best Bitcoin trading strategies in terms of timing since there's a lot of volatility due to the hard fork.
https://wikicrypto.com/how-to-trade-bitcoin/
0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086