A Newbie Trader's Day
Like moths fly to candle fire, hypnotized by the fire’s dazzling delight, I too have been drawn to cryptocurrency trading. But there were of course initial barriers. Like setting up a trading account. Where to go and what to do. Fortunately, the bdcommunity Friday voice party helped a lot in this case. So I finally took the initiative and opened a Binance account.
My first trade was in, not surprisingly, HIVE/USDT pair. And it was easy enough. If you’re not living under a rock, you know hive fluctuates frequently and the range can be predicted with moderate ease. So my first trade, I made a 15% profit (3 days). Of course, it was truly a beginner's luck. I had absolutely no idea how to read a chart or even candlesticks, I solely acted on my previous knowledge about hive’s price range.
I’m also not that naive to assume I’d instinctively get to know how the market works based on my inadequate idea of hive and prudence. Besides, hive usually lays dormant for many days.
So I looked up online how to read candlesticks and started trading other coins. And all of a sudden, I no longer knew what was going on! 1% profit here (15m timeframe), 1% loss there, and I generally tried to predict the market seeing the candlesticks and hoping for momentum. This is when I got the biggest blow, and that was three days ago.
I bought some XMR (Monero), I thought it would go up. But immediately the price started to fall and it dropped about 8% over the whole day. What consoled me was that Eth, BTC, LTC, and some other major coins fell down at the same time and I thought when all of them will recover again, so will XMR. So I didn’t want to cement the deal and waited three days to see whether it goes up. It kinda did, but not to the same rate other coins did. I finally closed the order at a -3.67% loss. Guess what, within an hour, the price immediately rose back to the price I initially bought it in! I couldn’t help but laugh for a minute or two!
Certainly, there’s a god of crypto and he clearly hates me deeply!
Yep, a classic example how a human blames a deity (or satan) for his own misdoing/misfortunes.
Anyway, last night I realized, it was not going to work this way. So I stayed up and started watching video explanations of technical indicators like MA, EMA, MACD, RSI, Bollinger Bands etc. What each of them generally implies and how to use them in trade.
Today I was browsing the market and started looking for a pair that I can use to test my newly learned trading knowledge. I found one. It was ADA/USDT. It was going down and previously I wouldn’t buy it based on only that—because ADA pumped furiously the past few days and it could fall anytime for all I knew!
But this time I looked at my indicators. Since I was looking for intraday trading, I was looking at the 15m, 1hr, 2hr time frame. The RSI was low—which indicated the market was oversold or undervalued, Volume was low, bollinger bands looked like they were about to squeeze in—so not much volatility. The MACD wasn’t looking favorable though, but I thought, well, I wouldn’t know unless I try!
I placed a buy order at a low point, this time armed with new knowledge and excitement. And… it started to rise up! It rose from 0.36678 (my order price) to 0.377 (about 2.8%) within a few blissful minutes. Not bad!
I didn’t sell it then though, because I wanted to see how far it would go and how my indicators would shape. Also, Bollinger bands were showing the low line was above my buying price.
While today’s experiment brought me some joy, I’d be fool enough to assume I’ve mastered the market. In fact, I still think it’s just a lucky beginning of a possible meaningful trading carrier.
I will have to know more and thus looked for a few books on trading principles that would help me on my journey.
This is an entry to the Bdcommunity writing contest. Here’s the announcement post - https://hive.blog/hive-190212/@bdcommunity/contest-150-hive-in-prizes-write-about-your-day
I’d like to invite @stevenson7 to take part in the contest. :)
About Me
Twitter - https://twitter.com/not_a_c1nephile
Youtube - https://www.youtube.com/channel/UCg3TwYk--HKIsRmnvhob1Mg
I got the flashback of 2017 me reading the post. I did exactly this but with the DigiByte token. I didn't know about HIVE back then. I found out trading is not always sunshine as YT videos showed, with in a few days I lost a lot.
2021 me is not a master in trading either, actually I don't trade much or at all but I am more composed now. Very happy to see you are testing the waters in trading. Good luck brother.
Never heard of the digibyte coin. Is it still around?
Yeah, those YouTube traders all about generating views. The way they talk, they just want to prolong the video.
Thanks bhai! Let's see how do I do.
Yes, digibyte is still here, and performed well after I sold. I bought it watching the YT videos. 😂
I remember buying some digibyte back in 2017 xD xD
Welcome to the real world, trader! :)
The most important thing about trading is 'start'! You started! Here are some of the rules of candlestick and technical analysis:
Let me explain. All candlestick and TAs are very useful, and they work :) But, they only work for instuments (read crypto) with enough volume (trading volume). Only BTC and ETH in crypto has enough volume. For everything else you are trying your luck.
Even with items with volume, there is always a case that a particular set up doesn't work. It is just a probability game. A set up just means it has a higher probabbility of success that's all.
I can explain a lot more live, just remind me.
That hit me hard! Then again, I was still unsure about the whole thing. Thanks for the talk and the knowledge you passed here and on discord.
I want to build my own setup then and tread the water extensively in the coming days.
Remember another key point. No matter how many indicator you use, all indicators are derivative of price and/or volume. So by defitiona they are slower than price and volume. This proves again price and volume are the most important things. So study indicators, they are useful, but never use too many, as they will cloud your judgement.
Here is a list of more common indicators:
https://school.stockcharts.com/doku.php?id=technical_indicators
Also when you use indicator; understand if your indicator is
Trending or Ranging indicator
Most trend indicators lose money during a ranging market as fluctuations in a narrow price band tend to whipsaw traders in and out of their positions.
It is important to identify whether the market is trending or ranging and to employ indicators suited to the purpose: trend indicators for trending markets and the faster momentum indicators for ranging markets.
I was wondering myself, if indicators always stays on the current price, they cannot really predict the future, only what has been. In a way, they say how the market has moved in the past and not what will happen.
I think I understand why do you say they are slower than the price and volume movement.
Thanks, I've checked up on the page and there are a LOT of indicators it seems!
Nothing can predict the future! :)
What tools and indicators and experience can do is they can help you position yourself on a higher probablity trades or set up.
There are infinite number of indicators. You can make your own fairly easily. I have a few that I made myself for my custom set up. You don't need any programming background for that.
Ah, such a lovely read. You might just have sparked my interest in trading with your experience, and for one thing, I also really liked the "DYOR" written all over this.
Thank you for inviting, I'd definitely take part.
That's wonderful! Knowing it made you interested in trading certainly brings joy to me!
And yes, "DYOR" is generally the way I roll! ;)
Thanks for the encouragement mate!
Good to see you in!
In my first trade i lose twice. I buy then it goes down and out of fear of having more downfall i sell in loss
Sometimes i make profit and sometimes lose but i learn something from that.
All the best bro.
Yes, all those initial losses are teaching us, they are not that bad when you think in this way.
Thank you. Same to you.