The Journey Begins
I’ve recently begun dabbling in the world of cryptocurrency, and decided I would start a blog, both as a way to document things I learn and experience along that way, as well as possibly help someone else that is also trying to get into this figure out some of the basics and useful resources.
For the usual disclosure, I am not a financial advisor, I don’t even work in finance at all. My day job is as a telecommunications software engineer. Treat everything you read here as some educational resources and not financial advise. Some of the links you find on here will also be affiliate links, so using them will benefit the both of us.
I started about a little over a week ago with some researching. Just general Googling and hitting up the ole YouTube. There are a ton of great resources out there, but one YouTube channel I’ve found especially helpful is Coin Bureau. I found his content to be very approachable for someone who knows nothing about the financial industry, and he does a very good job of explaining things so that even a layman like myself can understand.
I’d recommend starting with his videos on Technical Analysis and some of the basics of trading to get a good idea of what you are up against, even before ever looking at what exchanges you may want to look at. I know when I first started looking at it. Knowing a little bit of the TA side of things will make something like this pricing chart make a hell of a lot more sense:
Once I’ve got a bit more understanding under my belt, and have fleshed out my personal approach to technical analysis, I’ll do a series of blog posts outlining it, but for now, if you want to learn more about that, I’d give some of Guy’s videos a watch.
DYOR — Do Your Own Research
One phrase that has come up a lot in my research, is Do Your Own Research. From what I’ve seen, this is not just something people say, but rather something that people really should be doing when getting into crypto. It helps you avoid getting manipulated by, lets just call him the Meme Lord, into doing something for his benefit that may not benefit you.
This extends beyond just being able to read pricing charts and knowing how to play the market. There are so many shit coins out there, that it can be easy to have the wool pulled over your eyes and fall victim to bad times. There is this term called tokenomics, where you look at all aspects of the crypto, the team the founded it, the developers that are creating it, the miners that maintain it. Does the crypto have a specific use case in the world that may make it valuable? Or is it just a meme that some people holding large quantities of it are just hoping a bunch of people jump on board to pump the price so they can dump and turn a profit.
I’ll do a more detailed post later on about it, but basically you want to look at the market cap (total amount of currency multipled by the current price), the average trading volume (if its too low the coin could be dead, if its too high it could be used for something like money laundering, or just to churn the price up). The general consensus seems to be that the volume should be somewhere in the 10–80% range.
You combine those data points with what you know about the crypto itself and that can help you decide if the crypto is something you want to throw your hard earned money into, and HODL (Hold On for Dear Life) it to the moon. This of course applies to the long game, and not if you are playing more in the day trader style.
Some of the site’s I’ve been using for research have been Coinbase, Coin Market Cap and CoinGecko. The first is an exchange (and also a referral link), and the other two are just good sites for basic data analysis. These are where I start when I’m looking into a crypto for the first time and want to at least understand the basics. CoinGecko is also a good resource for seeing what exchanges a given crypto is on. Coin Market Cap also has this data, but I have found it to not be as complete.
HODL versus Day Trading
I want to cover something that took me most of the first bit of research to realize, and that is the fact there is really two different types of trading going on. There is HODL (Hold On for Dear Life), and Day Trading. There is also Scrum trading, but I just consider that high strung day trading, and definitely not something I plan to dabble in any time soon.
HODLing is when you find a crypto you believe in and think is going to do well for the long run. You then buy it, hopefully when the price is right, and you hold it in a wallet, usually off exchange, and you sit on it until the price sky rockets. Or forever. Maybe the value goes up enough you decide it’s not just something to pump up your coffers, but becomes something that is also a very good store of value like Bitcoin (BTC) itself. Or maybe you have it staked and are making those sweet, sweet Return on Investments and don’t want the ride to stop.
Day Trading is more like the cowboys of the investing world, and you play the price in the short term, and don’t even really need to worry too much about what the crypto is or does, other than you may want to make sure it’s not scam or something else waiting to pull the rug out from under you. And of course this also accounts of leverage trading and all the advanced trading like that. I’ve done a little day trading, it is fun, and I’ve actually managed to stay in the green with about an 8% gain rate (working off a very very low test deposit).
I’d probably avoid any kind of leverage trading, as it can get real bad real quick, which I’ll talk about why in later posts, but if you find you want to give that a short early on, as I had a hankering to do, and you’re also paranoid about blowing your stack like me, Binance has leverage tokens you can buy which help to mitigate some of the risk, but really, don’t do it unless you know what you’re doing, or you’ve very prepared for that stack you stick in to go to $0 very quickly.
The last big topic I want to get into before I go over what my current favorite crypto is, is exchanges. This is where you will be turning that dirty ole fiat currency, into that shiny new digital crypto currency. There are tons of them, and most of them are sketchy as all hell, or charge big fees.
KYF — Know Your Fees. I’ve just coined that and I’m going to keep using it. The first thing you want to look at before you send any money or crypto over to an exchange is their fees. And there are three of them you really want to look at.
Deposit fees, where they might take a cut out of whatever you are putting in. I find a lot of the more reputable ones don’t tend to try and stick you here, but it’s worth making sure, especially if you’re using a strange method of funding.
Trade fees, these are important as you trade higher and higher volumes, but also tend to drop with volume. It’s good to know how much out of each trade they are going to snake, so you can account for that when you figure out at what point to exit a trade and reap your profit, the exchange is going to want a piece of it.
Withdrawl fees. This is the big one and where me and a friend of mine got a little screwed at. We landed on using NDAX (purposely NOT a link), he threw some money in, but luckily I was waiting for pay day and only threw in $2 CAD. bought a tiny bit of crypto and went to send it to my Exodus wallet, and what did I discover. Fucking $25 withdrawl fee across the board, crypo to fiat. Gross and unnecessary.
The last thing to care about with your exchange is if it has the crypto you want at it, but really, once you’ve converted fiat to crypto, it’s easy to move exchange to exchange to get what you want.
I want to recommend Newton for any Canadians out there, but full disclosure, my first deposit with them did not go smoothly. I am still planning to try it out one more time next time I get paid, and see how it goes. I will report back after and hopefully it goes better, because my deposit was held up for 3 days because my bank included my middle name in the email money transfer and failed the “name verification”. Their support was also impossible to just reach, and gave me a canned response when they did get back to me. But they have zero fees, and support Canadian’s using email money transfers, so I really want them to be my on/off ramp for turning fiat to crypto and back.
Now the bit I’m sure most people that stumble here will be most curious. What’s my current number one pick crypto from my whole week of research and a couple of days of trading? Well, I’m going to have to seriously throw my hat behind Cardano (ADA). Currently 4th in market cap, holding a little bit of value above what a lot of cryptos are holding during this current downturn of the market, and the tech they have coming up from their roadmap is simply great.
They also use a proof-of-stake (PoS) versus a proof-of-work (PoW) method to maintain the blockchain, so that checks off the boxes a lot of people are complaining about with the work based cryptos like Bitcoin (BTC). That of course is not a sentiment I believe in, I actually am in the camp that thinks that is actually going to be a driving factor to green energy, because miners want the lowest costs, and green energy is fucking cheap as hell,
I’m planning an entire blog post dedicated to why I think this is going to be one of the biggest cryptos going forward, and why it’s the one I currently have in my HODL’ing wallet. Plus, you can stake it and earn some interest, and who doesn’t want to earn more money, on the money that is sitting there and hopefully growing in value. It’s a total win-win,.
I think I’ve said enough here in my initial blog, more is definitely going to be coming down the pipes. I plan to post at least weekly, possibly more if I have something good I want to write about. We’ll see, but one thing is for certain, you’ll want to go ahead and bookmark this site, and come back and see what else I have in store!
Until Next Time
Not a Financial Advisor