Here Is What Can Happen If You Want to Trade Cryptocurrencies, but You Don’t Know How
Some beginners who come to Bitcointalk have a misconception about trading cryptocurrencies. They have heard some success stories and want to replicate them themselves. However, it’s a delusion to think that anyone can become a successful trader overnight, and all you have to do is purchase a few coins here and there, and the profits will start growing.
Trading crypto shouldn’t be taken lightly. Learning how to trade is a slow process that should be mastered slowly and patiently. Unfortunately, YouTube and social media don’t make things better because all they do is show you the glamourous side of trading. The cars, expensive houses, jewelry, and the women.
They don’t tell you about the shattered dreams, lost savings, and uncertain futures due to wrong trading decisions. The reality is, trading isn’t for everyone because not everyone has the discipline to only trade with the money they can afford to lose. So, for many people, buying and holding is the better choice.
I am writing this thread to warn beginners that there is another darker side to profits made with trading. These stories can maybe make you reconsider careless trading decisions or motivate you to learn how to trade correctly by studying the theory of successful crypto trading. A 10-minute YouTube clip is not enough.
1.Jake is married and lives in the UK. He has a good job, is respected, and can make business decisions worth millions of pounds for this boss. Jake has known about Bitcoin since 2015, and in one of his first trades, he made some good profits.
Enchanted with his early success, he decides to trade with his employer’s funds. He wanted to experience that joy again and make even more money. So he borrowed company funds and invested everything into a risky trade. During the same night, his positions were liquidated, and he lost it all.
"The first time I took it, I lost it all in about 20 minutes one night. The market moved very rapidly and I liquidated everything.
"It was about 2am. I went back to bed and had to lie down next to my wife. She had no idea what I had been up to."
Jake lost £1.5 million of company resources, nearly avoided a lawsuit, and is now receiving treatment for crypto trading addiction.
2.Noor lives in London. She is 30 years old and works as a designer. She lives with her boyfriend, is in love, and the two are saving to purchase their own house.
In November 2020, she became interested in crypto investments and wanted to trade cryptocurrencies. Her first purchase was £10.000 worth of bitcoin, whose value almost doubled, netting her a sum of over £18.000. Delighted with the results, she decided to cash out on bitcoin and invest in XRP and stocks instead. The biggest problem is that Noor doesn’t really know how to trade. She is just motivated by the hype and recommendations she sees from other investors.
But the market turned on her. XRP crashed, causing her to lose most of the investment. She read about the Gamestop stocks going through the roof and decided to recover her losses by purchasing those. Unfortunately, she entered the market too late and lost even more.
To sum up, Noor lost over £23.000 due to poor trading activities, believing the hype, and investing in something she knew nothing about. Her dream of becoming a homeowner has to be put on pause.
3. The following story dates back to the ICO frenzy of 2017. Helvis is a regular guy who, like many others, dreamt about becoming rich with cryptocurrency trading. He didn’t have a lot, but he had around $2.000 that he decided to invest.
Influenced by John McAfee and similar crypto influencers, he invested in the privacy coin Verge and in Tron. With those two purchases alone, he managed to turn his $2.000 into $60.000 within a few months. But, since he wanted more, his next decision was to buy Ethereum.
But soon, the market sentiment started to turn, and the prices began crashing. Like many others at the time, Helvis also became interested in ICOs and decided to try his luck with margin trading. Trading with money you don’t even have seemed too good to be true.
Since he didn’t know what he was doing and took too many risks with high leverage trades, Helvis lost nearly all of the $60.000 that he netted on Verge and Tron.
4.British Youtuber and rapper KSI is another newbie trader who wanted to play around with bitcoin and cryptocurrencies. So in November and December 2020, he invested £2 million into bitcoin and, assumably, some other altcoins. Initially, everything was going great, and KSI made £7 million on those initial investments.
But as it usually happens, he wanted more. Without knowledge and experience about margin trading and trading with leverage, he went all-in on that gamble. He liquidated all of his positions and lost the whole sum of £7 million.
KSI understands what he did was wrong, and he takes full responsibility for his actions. Nevertheless, he is still bullish on bitcoin and believes in the underlying technology.
“It’s been a full journey, but I had to experience it. I fully understand it now. I put money in things where I essentially leveraged myself and I kinda over leveraged myself to a point where I lost money because of it.”
“Bitcoin is here to stay; it is the future. It’s just no one want to accept it. I’ve lost £7m and i’m still fully crypto.”
Bottom LineYou shouldn’t be discouraged from trading crypto, but you need to realize the dangers associated with it. Without significant research, you are gambling with your own future. As the above examples have shown, with money, you can’t afford to lose.
Before you start dreaming about what you will do with your profits after you discovered the next Bitcoin and made x1000 on your trade, think about whether or not you will miss that money if you lose it. Start small and play it safe. Purchase bitcoin, hold it and be happy that you still belong to the early adopters.
Good Luck!
Sources:
1.
https://www.bbc.com/news/uk-scotland-572680242.
https://www.theguardian.com/lifeandstyle/2021/jun/19/life-savings-in-crypto-generation-of-amateurs-hooked-on-high-risk-trading3.
https://hackernoon.com/how-i-lost-dollar200000-trading-crypto-and-the-lessons-i-learned-5311378p4.
https://www.independent.co.uk/arts-entertainment/music/news/ksi-bitcoin-youtube-b1885801.html