beginning trades be aware (results of trading versus btc)
Updated
For the new and beginning traders. Read this before you enter the world of trading.
Hi I’m Stefaan, I’m an engineer and know something about risk-management and basic economics.
I thought getting into BTC and crypto would make my savings double in just a few months.
I started may 2017 with about 40.000€ and price of BTC was around 1700€ and LTC at around 24€.
Right know I have less then 15.000€ left.
1. Is BTC a scam
I think BTC and the mayor coins are not a fraud, although I don’t understand the technology behind the different coins, it is an easy, fast and cheap way to transfer money, so at least it does the same things as banks, but faster and cheaper. If bankers consider BTC a fraud then you can argue that they are too.
But it is not because the product (BTC) is not a scam that you don’t get ripped off by (big) traders who are misusing the concept.
2. Market price
I thought market price was a simple question of demand and supply based on the fact that in the future this would be a game changer in the world of money.
This is not the case.
Market price (at this moment) is based on a combination of
Greed, Fear Of Missing Out, Panic, some external influences (politics, war, terror) and pure manipulation.
This means that supply and demand can be manipulated by triggering certain.
Keep that in mind.
3. Trading
A long trade is a buy with the purpose to sell later at a higher price
A short trade is a sell with the purpose to buy later at a lower price.
If you do those trades on a margin base, means that you borrow the money and that you are only covered for the losses that trade may make. If you cover the buy with a 100% deposit means that you can suffer a total loss, if you buy with a 20% deposit means that the broker platform will automatically close the order as soon as the coverage is not sufficient. At that time you lose everything.
A trader (prof or not) will buy/sell BTC in the expectation that he will make money of it. To avoid too big losses traders will build in stop losses (this is a value at whenever the price go lower than this value you automatically sell).
By going short it is just the opposite.
4. Manipulation
4.1 manipulation from the outside
When people on whatever platform you chose are promising you mountains of gold, then you know a group of persons/companies is trying to get higher prices (so they can sell and make more profit).
When people are calling BTC a fraud are talking about a upcoming crash, then you know a group of persons/companies is trying to get lower prices (so they can buy cheap coins from people who got in a panic).
4.2 manipulation from the inside
In the order book you can see the demand and supply of coins at any given moment at a certain price. So you can easily calculate how much coins/money you need to make a price-swing of a few percent.
When prices are rising (most of the time after you are promised mountains of gold), at a certain moment the available money to buy coins will run out. At that time you don’t really need to sell a lot of coins too trigger a price-swing. You just have to sell a few hundred BTC at the same time on the different platforms. Statistically the odds are zero that at the same time hundreds of people will start selling their coins, so this is organized.
At that moment price will fall down, maybe just enough to trigger the stop losses of semi professional traders, the supply of coins which are automatically offered will multiply the effect of the first sell off. Price will drop with double digits in a matter of seconds. As soon as prices fall more then 15-20% normal people who just got in, will get scared and start selling their coins too, which results in a second sell-off wave.
At that moment the ones who started the chain reaction will collect coins a very cheap prices. This happened, mid July (35% drop), mid September (40% drop) and will happen mid November.
As soon as prices are dropped you will notice that you will not hear anyone calling BTC a scam
Hi I’m Stefaan, I’m an engineer and know something about risk-management and basic economics.
I thought getting into BTC and crypto would make my savings double in just a few months.
I started may 2017 with about 40.000€ and price of BTC was around 1700€ and LTC at around 24€.
Right know I have less then 15.000€ left.
1. Is BTC a scam
I think BTC and the mayor coins are not a fraud, although I don’t understand the technology behind the different coins, it is an easy, fast and cheap way to transfer money, so at least it does the same things as banks, but faster and cheaper. If bankers consider BTC a fraud then you can argue that they are too.
But it is not because the product (BTC) is not a scam that you don’t get ripped off by (big) traders who are misusing the concept.
2. Market price
I thought market price was a simple question of demand and supply based on the fact that in the future this would be a game changer in the world of money.
This is not the case.
Market price (at this moment) is based on a combination of
Greed, Fear Of Missing Out, Panic, some external influences (politics, war, terror) and pure manipulation.
This means that supply and demand can be manipulated by triggering certain.
Keep that in mind.
3. Trading
A long trade is a buy with the purpose to sell later at a higher price
A short trade is a sell with the purpose to buy later at a lower price.
If you do those trades on a margin base, means that you borrow the money and that you are only covered for the losses that trade may make. If you cover the buy with a 100% deposit means that you can suffer a total loss, if you buy with a 20% deposit means that the broker platform will automatically close the order as soon as the coverage is not sufficient. At that time you lose everything.
A trader (prof or not) will buy/sell BTC in the expectation that he will make money of it. To avoid too big losses traders will build in stop losses (this is a value at whenever the price go lower than this value you automatically sell).
By going short it is just the opposite.
4. Manipulation
4.1 manipulation from the outside
When people on whatever platform you chose are promising you mountains of gold, then you know a group of persons/companies is trying to get higher prices (so they can sell and make more profit).
When people are calling BTC a fraud are talking about a upcoming crash, then you know a group of persons/companies is trying to get lower prices (so they can buy cheap coins from people who got in a panic).
4.2 manipulation from the inside
In the order book you can see the demand and supply of coins at any given moment at a certain price. So you can easily calculate how much coins/money you need to make a price-swing of a few percent.
When prices are rising (most of the time after you are promised mountains of gold), at a certain moment the available money to buy coins will run out. At that time you don’t really need to sell a lot of coins too trigger a price-swing. You just have to sell a few hundred BTC at the same time on the different platforms. Statistically the odds are zero that at the same time hundreds of people will start selling their coins, so this is organized.
At that moment price will fall down, maybe just enough to trigger the stop losses of semi professional traders, the supply of coins which are automatically offered will multiply the effect of the first sell off. Price will drop with double digits in a matter of seconds. As soon as prices fall more then 15-20% normal people who just got in, will get scared and start selling their coins too, which results in a second sell-off wave.
At that moment the ones who started the chain reaction will collect coins a very cheap prices. This happened, mid July (35% drop), mid September (40% drop) and will happen mid November.
As soon as prices are dropped you will notice that you will not hear anyone calling BTC a scam
Note
As soon as prices are dropped you will notice that you will not hear anyone calling BTC a fraud, they just have filled their pockets with coins and now they have to pump up the value again. As soon as BTC is back to 70-75% of the former value, people are automatically jump back in because of FOMO and price will rise again until they decide that it is high enough and will force a sell off just the way they did first.
Because they make sure the new low will be higher than the last low, BTC will have always an uptrend over a longer period of time.
Personally I think justice departments all over the world should arrest those people, take all their money and put them in prison for the rest of their lives. It is no different than what a robber does who puts a gun to your head.
If the first selloff didn’t trigger the stop losses of the traders and prices will rise very fast after just a dip of a few percent, you can almost be sure that a second sell off will follow in a few days (this they call a bulltrap).
But if you know this you can be quite sure of a few things.
If a sell off happens, it will go down for 30-40% of the last high.
So if it is already at 25-30%, just keep the coins you have and put buy order just above the price levels there is a big demand for. At that time you get a small part of those cheap coins. Price recovery will happen in a few days or even hours.
I know I sold out 2 times at the worst possible moment, if I had waited both times just an hour longer, I would still have the same capital as I started with.
5. Investing or trading
If you still think you can beat the system I just explained and want to start trading BTC, you have to wonder if you would do better than BTC itself (you should watch the last youtube posts of cedric dahl).
If I just put my 40.000€ in BTC at 1700€/BTC in May and walked away, it would be worth now around 130.000€.
So if you still think you can do better I advise you to use half of the capital you are willing to risk just to buy BTC, put it into a wallet and leave it there for at least a year.
It even doesn’t really matter if you buy it right now at all time high are wait until 15 November after the fork happened and a 3th crash in 6 months will happen.
If persons are intrested I can explain what I did wrong, so you would not do the same
Note
For the record, I am not a teacher, but I am willing to explain what I did do wrong so you don't make the same mistakes as I did.I don't charge you anything, and if you remember this post over year or so and think I gave you good advice, you may always ask for my btc adress.
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