Recently, web service and social network for traders, TradingView was discovered a serious bug related to incorrect display of trading indicators in the analysis of graphs in the theory of Elliott. Later it turned out that the indicators were not correctly displayed only on a logarithmic scale, but, nevertheless, as a result of this error, the traders could suffer losses. This news once again demonstrates how great the risk of cryptotrading and how difficult it is to consistently earn on it. DeCenter considered the basic strategy of earnings on cryptotrading and the dangers that will lie in wait for the traders when trying to get significant income.
In traditional Finance it is believed that a real professional trader is able to profit in any market situation, however, cryptotrading it is not so. If in 2017 cryptotrading was synonymous with wealth and success, in 2018 a crypto-funds and traders went bankrupt.
When deciding to capturadora better to be guided by the results of technical and fundamental analysis. Technical analysis a method of forecasting future price of financial assets on the basis of their value in the past on the charts.
The use of technical analysis in the field of cryptotrading very different from traditional due to the large volume and volatility, and also due to the manipulation rate of the crypto currency, technical analysis may fail and the «false breakout» level to enter capturadora misleading.
As for fundamental analysis, it is based on market and financial indicators that affect the price of the underlying asset. The stock market is primarily the price of bitcoin and other top cryptocurrencies, and also consider myself a crypto-asset and its analogues. For example, taking a decision on buying these anonymous cryptocurrencies as zcash for, Dash and Monero, it is better to analyze the demand for each of them and then make a decision on entering a position. DeCenter previously talked about the features and differences of these approaches.
Even with a winning strategy and psychology of a successful trader, you can lose all money if we translate and keep them on the exchanges. Moreover, we should always remember that none of the market today are not immune from hackers, and whether it will be ready after the attack to return the lost funds — is unclear.
According to The Wall Street Journal, 2011-2018 years on the crypto currency exchange with ICO was committed 56 attacks that claimed more than $1.6 billion, almost a billion ($473 million and $533 million, respectively) was removed during two major attacks on the exchange Mt.Gox and Coincheck. However, only from January to July last year, hackers stole more than $800 million with a five kryptomere, higher than in any other year.
Also, when storage of all crypto-asset on one exchange there is a risk of losing them in the bankruptcy, as recently happened with the stock exchanges Quadriga and Cryptopia. Thus, the user of the forum Bitcointalk nickname natakirta said that as a result of hacking your account on Bittrex and bankruptcy Cryptopia, she lost more than 1.5 BTC.
The user of the forum Bitcointalk talked about their losses due to hacking of exchanges Bittrex and Cryptopia.
Therefore, large amounts are best stored in cold wallets, to exchanges froze the funds that the trader holds on them, please pass KYC and all other required procedures for verification of the user.
As already mentioned DeCenter, the best option for storage is to use two different wallets — hot and cold. So make the most of the large companies that work with cryptocurrency.
Pump and dump — it is a common scheme of manipulating the price of the asset that was first used on the us stock market long before the advent of cryptocurrencies. Pump artificial price-fixing of cryptocurrency due to its buying up on the exchange. Usually, the organizers of this scheme are working with little-known coins on exchanges such as Yobit. Participants Pampa at a certain point, buy is assigned to the organizer of the coin, expect growth of the price in 1.5−3 times, and then sell. But usually by the time when the participant joins the Pampa, he had been buying a coin at an inflated price by the organizer and likely will not have time to sell it, which means losing funds.
This scheme is very dangerous, and definitely earns her only the organizer. Unlike the unregulated stock market, traditional exchanges, this practice is illegal, and the use of pump and dump schemes are strictly regulated by the financial authorities of different countries.
The organization «big pampow» known John McAfee: after accolades about the coins in his Twitter account has been a sharp growth (and then collapse) courses such coins as Verge, Electroneum, and Burst.
The simplest arbitration based on the difference in prices of cryptocurrencies on the different trading platforms which allows the trader to buy crypto-asset is cheaper on one exchange and sell higher on the other. A more complicated strategy here is to play on the price difference between multiple cryptocurrencies. Unfortunately, the Tribunal only looks like a win-win trading strategy as there is a large risk of losing money in arbitration.
First, the crypto currency exchange is not like arbitration specialists and create problems for them in the transaction of the coins between the exchanges. Second, the arbitration takes a lot of time and favorable price difference remains not for long: it means that a trade deal that could bring an 8% profit 20 minutes ago, now will provide the trader with a loss of 5% of the amount.
Talking about it, and users of Bitcointalk. One of them, normal.80, believes that to capitalize on the arbitrage is still possible, but it makes sense only if the trader has at least 50 esters, and the trade would take quite a large amount of time.
Indeed, the exchange block users: user Cryptoman writes that he had an amount of more than 50 esters, and the market has locked them in one of the week. So, although the arbitration and can earn better to do it using special software in the form of trading bots and invest a small amount.
This trading mode allows traders to trade on borrowed money in proportion to his own, and the loan is usually taken from the crypto currency exchange, it charges interest for the use of them.
The greatest leverage with the ratio of equity to debt of 1 to 100 gives exchange BitMex. However, the shoulder 3-5 times provided by the trader has a large amount of trading risk and new traders generally do not use margin trading. Otherwise they can expect a sad ending.
So, an anonymous Reddit user (now deleted their account) a year ago told how he consistently earned the cryptotrading during the year and turned 3 BTC into 200 BTC, but then lost everything due to margin trading.
Today in the Telegram and other social networks there are many groups and channels who publish trading signals and recommendations. Many of them create a private chat with paid access. However, the quality of published there signals is often poor. This applies to learning content.
For example, the user Energy_Coin in a special topic on Bitcointalk says that lost three of their Deposit after passing the training courses.
The best advice you can give to aspiring capturadora to enjoy the first free content and expert advice that are published in open access and paid content be purchased only if it is really valuable and has real good reviews.
The damages and losses incurred by traders are not only with the wrong choice of positions, but also with the emotions that prevent traders focus on, is the greed and fear of loss. For fear of the traders out of positions ahead of time, fixing minimum profit with a small increase in the price of crypto-asset or loss when it is falling, but just had to wait.
Greed and the desire to earn millions in one day forced traders to go on excessively risky combination. They are based on the syndrome of loss of profits (FOMO) or fear of losing everything (FUD).
DeCenter wrote instructive story of a Reddit user under the nickname SuperDuperDerp. He invested in bitcoin back in 2012 and $400 bought 100 BTC. He believed that bitcoin will grow strongly, but growth was very slow, and when he needed money, he decided to sell the coins at $8, hoping that the exchange rate will collapse, and he will be able to re-enter at a low price. However, this did not happen. SuperDuperDerp writes: «I watched the growing bitcoin exchange rate, and when it has reached the level of $100, again I have invested, but now at 8 BTC. In 2013, I several times went on about their emotions and panic sold and bought back bitcoin. At some point, I needed money so I sold almost all of their cryptocurrency. Now I still have 2 BTC, that in any case, in comparison with 2012, better. I want to believe that if my financial situation allowed me, in 2012 I would have invested in more bitcoin for the long term and wouldn’t sell them so swiftly. But who knew? To make money, need money».
And, of course, traders need to follow the law in the country of residence and in the jurisdiction in which the act of exchange, exchangers and other shopping services they use.
For example, recently the Tax office of Sweden demanded from capturadora Linux Dunker to pay 300% tax (just under $1 million) from cryptotrading. Probably after the legislation of Russia, Ukraine, Kazakhstan and other CIS countries will be established the procedure of taxation of transactions with cryptocurrencies, speaking capturadora also have to pay their taxes.