For far too long I've been holding a handful of coins on Bittrex that have been going steadily down. I've heard many traders boast about "never taking a loss" on a trade, and I was jealous. I wanted to be like them.
I was also stupid.
Holding on to a coin you're not particularly interested in because you bought on someone else's advice and expected a quick flip but missed the boat... That's not smart. It's even less smart when you watch the coin go down in value, week after week, month after month. Sure, eventually it might have its day in the sun, but even a 40% bump might not come close to where you originally bought in since it's a percentage of the now lower price.
So last night, I ripped off the bandaid, sold half a dozen coins going nowhere for a total of 0.8 BTC and moved them over to Cryptopia to swing trade a bit on SmartCash. I already have my SmartCash holdings tucked away to earn SmartRewards next month, so this is more about increasing that 0.8 BTC to something more. If I pick up some SMART along the way, bonus. As of this morning, I'm up +0.2 to 1 BTC. :)
I was also trying to keep in mind some principles I recently read in this great article:
The Cryptocurrency Trading Bible Two: The Seven Deadly Sins of Technical Analysis
I've been very skeptical of technical analysis and "chartalism" because it seemed remarkably close to post hoc, ergo propter hoc ( "after this, therefore, because of this"). It seemed like a story we tell ourselves to make sense of often near-random data. But then I joined some Facebook groups, and I watched other traders do really well. I saw how fibonacci trading might actually make sense due to human decision making processes being a part of nature, just like everything else we see around us. I saw how previous resistence often becomes future support.
I started learning.
So last night, I took advice from that article: "It’s only by doing that we learn anything in life." I also realized the truth in this quote: "That’s because trading and life are a journey of self discovery." Most of all, I had a lot of fun. Before going to bed, I set a SmartCash sell order at 0.00001496 which hit nicely along with a buy order of 0.00000753 which came so close! The dump I had expected only ended up coming down to 0.00000811. If felt good to have my instincts validated (though it would have been nice to hit that order!)
It's also cool to see a token I blogged about a few days ago up so much with volume increasing and two new exchanges which will pick it up in the next few days and weeks (HitBTC and MonkeyCoin). If you missed those posts, you can catch up on them here:
When it comes to coins you really believe in, especially when the market corrects and goes down, I'm still an advocate of long term holding. At the same time, when it comes to trading opportunities for increasing holdings, trading out can help us avoid a bigger loss. I'm learning to separate out my investor side from my speculator/trader side. I realize most successful projects need both. I'm also learning it's helpful to have my investments tucked away so I feel emotionless about the funds I decide to trade with. That helps me strategically push through sell or buy walls when I'm not too concerned about the market going one direction or the other.
I used to be a bit frustrated at traders, but later I realized it was because they had a skill and understanding I lacked which enabled them to profit while I watched opportunities pass me by. It obviously doesn't always work out that way, but I eventually decided it's a skill I'd like to learn.
So far, I'm having fun.
As I always say, please don't risk more than you're willing to lose when it comes to the speculative environment of cryptocurrency. If you picked up some SmartCash after I mentioned it last time, congrats, and you're welcome. :) If you still want to get in on the fun but don't have a Cryptopia account yet, here's my referral link: https://www.cryptopia.co.nz/Register?referrer=lukestokes
What do you think about trading vs. investing?
