My Mistakes in Crypto Trading and Investing as a Newbie

As the crypto market continues to dip in the past few days, I tried my best to just stay on the sidelines and just watch. And as I slowly watch the increasing amount of the unrealized loss of my portfolio, I can’t help but reflect on my mistakes in crypto trading and investing and I’d like to share it on my blog.  The unrealized losses this week wiped out all my gains and a portion of my initial capital (ouch!!!).

Before we continue, as I have mentioned in my previous posts, this is not financial advice (NFA) and should not be taken as such. I’m just sharing my journey in crypto trading and investing. If you need financial advice on any kind of investments (real estate, stocks, bonds, crypto, etc) please consult a financial adviser and always Do Your Own Reasearch (DYOR)!

Photo by Maxim Hopman on Unsplash

Anyway going back to the topic…

Brief Background of my Crypto Journey

I just started dabbling in crypto around February 2021. So, I’m really really new to this space. I’m actively using Binance as my main trading platform since it’s the biggest exchange in the world (as of the time of writing).

I also have some very small holdings in other exchanges such as Kucoin, Gate.io, and Crypto.com, mainly because some of the cryptos that I found there (and I’m interested in) are not available on Binance.

And also, since I’ve been here in only just a few months and coming from a country with a lower wage compared to Western countries, my crypto investment is really not that much. This is another reason why I’m not that fazed with the continuous dipping perhaps. I only invested what I can afford to lose.

Personally, I believe that crypto is here to stay, as blockchain technology gets continuously adapted by various industries. I don’t know for how long though. We all know that technology constantly gets updated and things get obsolete real fast sometimes.

Anyway, here are my crypto investing mistakes in the past three months.

Photo by Francisco Gonzalez on Unsplash

My Mistakes in Crypto Trading and Investing as a Newbie

I Did Not Take Advantage of Sign-Up Discounts

When I signed up with Binance, I was the first one in my circle of friends to do so. Thus, whenever I trade now on Binance, I don’t get a discount since I didn’t use any sign-up/referral code. Although I do get a commission from the trades of my friends.

However, if you use a referral link when you sign-up, you’ll get a discount on the trading fee every time you buy and sell crypto. If you use my link we will get a 10% discount on the trading fee. The trading fee is usually 0.075% if you opt to use BNB to pay for the trading fee or 1% if you don’t use BNB.

By the way, this also varies depending on your trading level, you can check this link for more explanation about this and bear in mind that this is subject to change so always check Binance for updates.

I’ve seen other links with higher discounts, but I don’t recall from which website. I guess they qualified from the Binance Referral Program which I did not apply for since my blog is not purely about crypto. I suggest that you check out crypto dedicated blogs for higher sign-up discounts.

Sign-up discount mechanics vary depending on the crypto exchange so be sure to read the terms and conditions first before you sign-up with any exchanges.

 

I FOMO’ed a Lot

In my first few weeks, I FOMO’ed a lot and allowed myself to be driven by hype and all that jazz.

Luckily, I didn’t lose much, perhaps because when I FOMO’ed in, almost all crypto prices were rising up.

However, as days go by, I got to spend a lot of time reading stuff about the crypto that I bought and that’s the time when I decided to keep or let go of some of the first few ones that I bought.

Looking back, I should have done the other way around. I should have researched first before buying and not after. It was really pure dumb luck I guess that I didn’t lose that much.

Most of my losses can be attributed though to chasing instant/fast money from newly launched crypto.

Chasing Newly Launch Crypto

As I slowly learn about crypto, I thought that it might be a good idea to be one of the first ones to invest in new crypto. So when I learned about the new crypto being launched every now and then on Binance then I always wait for them and buy as soon as they become available in the market.

To be honest, I lost money in the process and I admit that it’s really my fault, and here’s why.

1. I did DYOR but it turned out to be not enough.
2. Not all crypto being launched in Binance are ‘new’ some have been already listed in other exchanges. Thus, when it gets announced in Binance that they will add let’s say ‘Crypto X’, then people will start buying ‘Crypto X’ from other exchanges and once it goes up in Binance, then they will start selling.
3. Not all launches are successful of course
4. There are mechanics in every launch and there are distributions/pre-sales, etc, thus once the trading starts, the price is already way up high.

Photo by Brian Erickson on Unsplash

Chasing AirDrops

When I first learned about airdrops, I immediately search the internet for crypto that is available in Binance that has an airdrop schedule and immediately bought some. And again, I lost money in the process.

Why? Because by the time the snapshot was taken (when the system identifies who are eligible to receive the airdrop), people have already been dumping a portion of their holdings to take advantage of the price increase that happened.

Of course, this is not the case for all airdrops, especially if you’re a long-term holder of a coin. I even received an airdrop from a coin that I didn’t know had one.

But buying crypto just to receive an airdrop is something that I would not probably do anymore, especially for crypto that has weak fundamentals.

Not Taking Profit

I’ve experienced 5X and more gains from some of the cryptos that I bought from February 2021 but I did not take profit on all of them because I was thinking that it will still go up, and up and up to the moooooon hahahahahaha!

Actually, they did go up some more… until it all came crashing down.

A lot of them even went lower than my original positions. Some didn’t though.

I did take profits on some and reinvested them back on other cryptos. I put some earnings on Pancake Swap and Pancake Bunny which I think is ok since I was able to diversify my crypto holdings. But looking back, I should have also reserved some of my profits in stable coins as well.

This way, I could have taken advantage of the huge dips like what’s happening now (as of the time of writing), or better yet, I could have withdrawn my initial investment.

This is probably the biggest learning that I will never forget. Moving forward, I will take profit so mitigate my risks and put them in stable coins.

 

No Clear Plan

If I’m being honest with myself, I never had a clear plan when I entered the crypto market.

I just wanted to earn and to learn because I believe that blockchain is here to stay for at least some time, thus, I believe in the earning potential that I can gain from investing in crypto.

Now that I’ve experienced a massive dip which some people say is a crash, I will probably improve my risks management plan even more which includes taking profit and diversifying into stable coins, savings, staking, etc.

Final Thoughts

I’m sure that I will encounter more mistakes in the future and I will add them here to document it so I will always have something to look back to.

I believe that there are lots of opportunities to earn from crypto but having said that, I also believe that the risk is way higher than the usual investments that we are all familiar with.

As of the time being, the fluctuation of the price is crazy and it’s really not for the faint of heart.

By the way, before we end this article, please note again that this is not financial advice (NFA) and should not be taken as such. Please consult a financial adviser if you need advice on any financial investments. And as always, DYOR!

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