Trading vs. Investing

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For the vast majority of people, buying a coin and holding it for the long term is a smarter move than actively trading one or multiple coins at once. You see, cryptocurrency trading is rife with uninformed “traders” who simply buy and sell on a whim and inevitably end up broke, even in the bull market conditions.

Luckily for you, if you take some time to study the basics, you can outwit and outtrade these people and take consistent profits for yourself.

Trading Cryptocurrency vs. Big Board Stocks or Penny Stocks vs. Forex

If you’ve dabbled in trading securities before, then you’ll probably be familiar with some of the concepts discussed in this course. However, there are a few major differences between trading cryptocurrency and trading traditional
stocks or even penny stocks.

The main one of these is that the cryptocurrency market is open 24/7 365. There are no weekends off, there are no market closures at 1 PM for holidays or anything like that. As such, traditional trading advice such as “the best time of day to trade” falls by the wayside here.

Price movements can happen while you sleep because the Chinese market is already up and trading, or there is a large volume of buy order coming in from Korea. Events like this aren’t uncommon, and you need to be aware of these factors before committing to trading.

Mistake 1: Falling for Pump & Dump Schemes

Opt-In Pump & Dump Emails

Another thing to be aware of. These are a hangover from the mid-2000s when penny stock trading was all the rage, and scammy stock promoters would send out emails to their list promoting a certain stock. Either because they were paid to do so by the company, or the promoters had already invested big themselves. They then wait for the email recipients to invest and push the price up even more, before dumping their shares on the market for a profit, leaving the email recipients holding large losses.

Unfortunately, due to the lack of regulation by the SEC, companies regularly do this for cryptocurrency as well. That is why I recommend you don’t subscribe to any of these types of emails, whether a free or paid service. Your trading should be done based on market condition and technical analysis, which we’ll go into in more depth later on in this course.

Technical Analysis

Mistake 2: Not utilizing technical analysis

Ok guys this all for today. See you in the next class. Have a great day!!