I lost about US$5000 between 2015 and 2018 on cryptocurrencies. When I started trading cryptocurrencies, BTC was trading around US$250. It is now trading at US$42,900 on Binance (as of the time of writing this article). It even went as high as US$69,000 last year. These were the reasons why I lost such money:
1. Derivative trading:
I started derivative trading very early instead of sticking with my spot trading and I did this with leverage so my loses were huge. I remember one time I traded with leverage that BTC would go above US$600 but BTC dropped to US$280 from US$500. I lost over US$800 in that single trade.
2. ICO scams
I bought into Initial Coin Offerings (ICO) that never materialised. The developers run away with the monies even before the coins were listed on major exchangers. Some of the coins seemed promising but the developers were just thieves. I lost over US$1,000 through these scams.
3. Buying after ATH:
Some coins got to their All-Time-Highs even before I heard of them and instead of reading and analysing their past data to make a decision, I just bought into the hype. Never forget that, if you see someone seriously hyping a coin, then it is possible that he has invested in the coin and is doing that so that others could invest, raise the price for him to sell and take his profit. Don’t just invest because you heard a coin has made others rich, maybe it won’t go up above that price in the next 3 years.
4. Trading for others for a fixed percentage of profit.
At the heat of the crypto season, I started making some profit and I trusted my trading instincts so started calling on people to bring their money for me to trade for them for a profit of 10% a month. It was one of my worse mistakes.
After BTCs heroic rise to US$19,000 in December of 2017, the coin dropped all the way back to US$4,000, bringing all the smaller coins down with it. Though, I was down, people needed their money together with their interest. I was lucky I didn’t enrol many people. A lesson learnt the hardway.
What were some of the mistakes you did in crypto trading? Share with us.