An investor, a trader or a "crypto-currency hamster"? The main types of earnings on crypto-currencies

Hello dear friends!

Today I would like to touch upon a question that has recently become of interest to an increasing number of people. To date, thanks to the Internet and the active introduction of blockade and crypto currency technologies into our lives, such concepts as an investor and a trader are becoming available and interesting to more and more people.

More recently (3-5 years ago), trading was associated with most people with forex trading, currency and commodity exchanges, and seemed somewhat distant and inaccessible. Similarly, in the field of investment, the knowledge of the majority of ordinary people was limited to a savings book in Sberbank.

Just want to make a reservation at the beginning, in order to avoid criticism from the pros. This article does not apply for scientific work and is designed for beginners. Therefore, it will contain as few abstruse words and turns. As they say, I'll try to explain everything with a simple "balalaika" language.

So, let's begin.

Thanks to the sharp introduction of our life crypto currency, both concepts: a trader and an investor broke into the lives of so many people. These two types of income literally in a single moment captured a large number of people, different social strata. Today, thanks to the media and the word-of-mouth radio, only lazy people try not to try themselves in this area.

Paradoxically, if before, the majority believed that trading and investing is something complex and it needs to be learned, at present every second person considers this to be a feasible task for himself. Well, why complicated? It is necessary to register on the crypto exchange market, it will take from ten minutes to half an hour, create a crypto-currency purse 10-20 minutes, set up funds for the stock exchange and you are almost an investor! We buy the crypto currency, we bring it to our crypto-coin and wait, when the growth of the rate of the crypto currency will bring us revenue. The expected profit depends on the growth rate, the desired results and the strength of the nerves.

Just everything is simple with the process of trading. Trading is the exchange of goods, the main task of which is to buy cheaper, and sell more expensive. Well, what could be simpler?

In this article, I'll try to explain the essence of these two processes and what features and pitfalls it is worth waiting for on their way to beginners in a simple, "balalaika" language.

Let's start with investing.

Investing is a more peaceful and long-term process. The only thing you need to understand is that you are investing money not for a day and a week, but for a much longer time. At least half a year. The maximum limit is limited only by your "hangers" and greed. I will explain what the foundation lies in investing in crypto-currencies. It's simple. You can go to the resource and see the dynamics of the development of the main crypto-currencies in the top twenty list. For example, I take all the famous Bitcoin, because it more graphically demonstrates the dynamics and perspective. In order to have a concept, I will compare with the common deposits in the bank.

Investment for one year: 04 January 2015 year rate bitcoin was 281,45 $. 03 January 2016 year rate bitcoin was 431,45 $. Accordingly, buying bitcoin in January 2015 year, and selling in January 2016 year, you would have received a profit of 53%.



Investment for 2 years: 04 January 2015 year rate bitcoin was 281,45 $. 01 January 2017 year rate bitcoin was 963,06 $. Accordingly, buying bitcoin in January 2015 year, and selling in January 2017 year, you would have received a profit of 241,77%.



From the above figures, I think everyone understands the prospect of a long-term investment in bitcoin. Given that at the time of writing, the rate exceeds $ 4000, each of you can calculate the benefit. Agree that it is much more profitable and exceeds any savings deposit in any bank.
Given that all analysts predict the growth of bitcoin over time, although they predict a decline in its path, it can be confidently asserted that investing in bitcoin for the next 10 years remains a very profitable business.

Now let's move on to the process of trading.

I want to say at once that this is a much more complicated process than many beginners seem to require, requiring some fundamental knowledge in the field of technical analysis, as well as understanding and tracking information processes in the field of the crypto-currency market. Everything is very simple. You can not successfully and professionally engage in trading without studying this process, just as you can not skillfully drive a car without going through driving instruction. Of course you can get behind the wheel and even go, but I think the result at 90% will be deplorable.

I think that many readers will now say – "Yes, there is nothing terrible. I already trade a few days, months, etc. and I earn ". Before further discussion of the topic, I propose to conduct a small test.

Answer yourself to the following questions:
"What are Elliott waves?"
What are Fibonacci levels?
– What are the levels of support and resistance?
– What do you know about the combination of Japanese candles?
– What is EMA, SMA, RSI, ADX and MACD?
– What is divergence bullish and bearish?
– What are oscillators?
– What is short and long?

So, friends. If you now with confidence answered at least the 4 question, congratulations! If you are not a professional trader, then at least take it seriously, stand on the right path and can proudly call yourself this title! If you are at a loss to answer them, but also the first time you hear, my friends must disappoint you. You are not a trader. You are an amateur and most likely, sorry for the rudeness of speech, you are a "hamster". Just want to explain that I did not want to offend anyone. In the language of traders, a hamster is a beginner who absolutely does not understand patterns, or understands rather superficially. Without analyzing, without thinking, he asks advice from others. At the slightest fluctuation of the rate down – sells, with the slightest upward swings, expecting growth – buys up. It is on these users that professional traders make a profit.

I will open the topic a little more. What is a "hamster"? This is a commonplace newcomer who somehow received information that it is very profitable to trade on the currency market today. Having picked up superficial knowledge on the Internet, as well as having read various articles talking about prospects and watching numerous videos on YouTube, the beginner decides to start trading and become a trader. I will not dwell on the issue of registering on stock exchanges, opening purses and ways of exchanging fiat money. We lower these procedures.

Having gone through all of the above, the novice directly comes into contact with the trading process. Here, in principle, many do not face difficulties. The process is simple and straightforward. Has bought more cheaply, has sold more dearly. The novice takes the first timid steps, buys and sells. And here he wants it or not, he still faces a problem. Has bought more cheaply, has sold more expensively – all is simple! But how do you know when it will be cheaper to buy? And when that threshold is more expensive to sell?
And here you have three friends. The first is to start seriously studying the issue of exchange trade. This process is long and difficult, in principle, and any process of learning in any field, if you aspire to become a professional. On this path, I will not focus attention, so as not to complicate the article.

I will dwell on 2-x second paths, which all beginners choose with pleasure. Both of these roads are similar in that you choose the "hamster" way. Differences consist only in the fact that you have a choice, you can be either a wild "hamster" or a domestic one. So, let's dwell on the differences a little.

Let's start with the wild kind. Wild "hamster" as a rule, in solving the main question "when is cheaper to buy? And when is it more expensive to sell? "He hopes for himself. He looks for the answer in social networks, blogs, YouTube, in chat rooms of various messengers. But the decision on the information received tends to take itself, as a rule chaotic, on the basis of own experience, analysis and intuition. For example. In some chat room there is information that there is super news, or 100% is planned for a pamp of any crypto currency. Our "hamster" with a running start rushes to this news and begins to buy. As a rule, stuffing his cheeks, he begins to wait for the moment when it will be possible to sell and make a profit. Here, luck by and large depends on greed. Considering that the majority expects to make a profit a lot and at once, at least 50% then they wait until the last. As a rule, luck in such cases leaves immediately after the purchase. The coin suddenly ceases to grow, and even sharply falls down and our hamster stays with what is not able to chew. In the end, nerves can not stand up and our hero begins to sell in order to return something.

I'll try to explain very simply why this happens. To begin with, all newcomers, as a rule, either do not have large sums for bidding, or follow the instinct of self-preservation and trade with small funds. Therefore, as a rule, the first steps are made on little-known coins, or coins worth up to 10 $. Here, even at the psychological level, the magic of numbers plays a role. Well agree that it is more interesting? On 100 $ buy 0.023 bitcoin and even if you grow even in 50% get the profit 0.035 bitcoin. Either on 100 $ buy 1000 coins worth 10 cents and sweetly calculate what will happen if the price of one coin rises to at least one dollar! And up to two! And if it's ten? Here it is a fabulous wealth !!!

So back to the essence of the process. Why failures occur. I will describe an exemplary process. Imagine that a group of experienced people, conditionally in the amount of 10 people have the means and experience in trading. They create, we call a conditionally pamp group. This group creates their blogs, chats on the topic of cryptor trading and usually comes in a large number of different chats of the same theme. Further, as a rule, a small coin is selected, plus on the exchange with a small volume of trades. Now imagine that these people are beginning to buy coins gradually and in small batches. For example: 100 purchases for 50 $. Accordingly, the coin rate starts to go up. Whereas to the eightieth purchase in blogs and chats of both their own and others, exclusive, one hundred percent information is being delivered that there is a big growth and movement of the coin to the skies. Personally, I know at least 5 chats, where the audience reaches up to 2000 people, and there are many more. Now imagine that at least one and a half thousand "hamsters" will bite on this information. Accordingly, they fly in and start buying. The course of the coin certainly continues to grow. In order for a coin to buy "hamsters", somebody should sell it. After having finished all their purchases, the pamp group starts selling coins bought accordingly at a much larger rate than bought (remember, they bought first). Imagine that one and a half thousand "hamsters" will buy coins each on an average of 50 $. And now simple arithmetic. The same volume of coins was bought by a pamp group at 5000 $, and sold at 75000 $. How are you? Eventually, instigators of the pampa make a profit, the coin reaches the limit of purchasing power, because the turn and appetite of "hamsters" are not eternal. What's the result. The Pump Group shares profits and prepares a new attack, and a large number of hamsters remain with full cheeks and, as I described above, begin to sell the coin at a loss, trying to discourage even a small part of the invested funds.

Just want to clarify that I have simplified the process as much as possible. In fact, everything is much more complicated and many-sided. But if I start to go into all the nuances, the article will become longer and incomprehensible. I just tried to make it as simple as possible.

And so, with us it remains to consider who are such homemade "hamsters" and how they differ from wild ones. It's pretty simple. Home "hamsters" are newcomers who have found their harbor and most likely joined a group of "pros" (and most likely a pamp group). They sit in the blogs and chats of this group. It is very likely that they bought some super training courses or participation in private chat rooms, where the latest and accurate signals for trading in promising crypto currency are given. The advantage of home "hamsters" is that they receive information from the pamp group, one of the first, respectively after the hosts. The owners are interested in those who are full and prompt in time when to sell in their secret chat, which is deprived of wild "hamsters". In this connection, they have the opportunity to purchase one of the first and, accordingly (curbing greed), have time to sell, earning even a small percentage of their profits.

Well, dear friends, we have reviewed, as simply as possible, what awaits newcomers to the fields of investment and trading in the field of crypto-currency. Of course, not everything is so sad. The devil is not so terrible as he is painted. Indeed, for today, this sphere is really promising and allows us to make good profits. You just need an approach with your head.

What I would like to advise beginners.

As for those who are going to invest. Accordingly, it will be necessary to promontory the market and analyze the news background. Would recommend considering coins from the list of the top twenty Another tip. Do not invest all in one coin. Break your money into several pieces and put in a few coins. This will allow diversification of risks. Accordingly, the main asset is to make Bitcoin. I described the dynamics and prospects above. Determine immediately at the initial stage, for how long you are investing. This will make the goal clearer.

Now a couple of recommendations for those who decided to become a trader. First, start by reading the material part. I highly recommend reading the book "Memoirs of the Exchange Speculator" by Edwin Lefevre. Very interesting book. It is read as an art. And although it describes the events of the 20-ies, not at all lost its relevance and will allow to understand the essence of exchange processes. The second postulate that must be gnawed is "Technical Analysis" full course, author Jack Schwager. Here everything will be much more boring and abstruse, but the game is worth the candle.

I understand that there will be many who will object. "Like I do not have special knowledge, but I manage to earn". Yes, I agree, but it's more a feature of the market. We all know, for example, how bitcoin can grow. When all media and analysts say that there has been a big and continued growth, it's a sin not to make money. But we are not talking about investments, but about trading, and this is a game of short-term ups and downs. A professional trader earns not only on the ascent, but also falls.

It is also necessary to understand that a professional trader does not trade every minute, hourly and every day. He does not trade for the sake of simply trading. It is not the process of commerce that is important, but the making of money. A professional trader can, like a lurking predator, sit in ambush for days and weeks, waiting for a favorable market situation.

He makes deals when he is confident of success on 90%. Of course, traders often take risks, but here they already rely on their knowledge and rich experience, which allows them to minimize risks.

Summarize the above in a few simple rules:
– never work with borrowed, credit money and shoulders.
– Before you go into the market decide how much you are ready to lose.
– on the exchange about 1000 coins, and days in the year 365. You can always earn money. If in doubt, take a break.
– a professional trader does not have a price high to start purchases, or low to start sales.
– Your biggest enemy is your nerves. Control emotions. Remember that you do not have to trade every day. Do not go into the market just because you have nothing to do.

Well, friends? So my brief excursus has come to an end. I hope that my pearls will be useful for those who begin their hard way on the path of investment and trade in the field of crypto-currencies. I hope that everything I said helps you avoid mistakes and falls on your initial path.

Author: Evgeni Yakubenko, Analyst Freedman Club Crypto News
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