Reasons why investors lose money in the cryptocurrency market
After participating in the market for a while, I noticed that you guys lost quite a lot, so today I analyze to show you why they lost. Hope to be of some help to you.
Connected with INFORMATION
Dev information of the coin: Team Dev missed holding enough money to pay a visit to Las Vegas to gamble and then don't care regarding anymore. The child it gave birth to it doesn't care anymore, who cares about that Coin anymore shop for it.
Example: Dog DOGE. Information about the coin is about to be wiped on the exchange or?. If you accidentally hug the coins that are about to be wiped out on Polo, for example, Bittrex. Too much negative money in Balance, Primexbt. What ought i do? Other information.
II. COMPLETE CHARGES
One transaction you lose 0.25% Polo fee or 0.5% Bittrex fee, and Overnight fees of derivatives exchanges like binance future, primexbt trading. You try to calculate how many orders you trade in a month and multiply it depending on your Balance. If your account is small you will not see clearly but the large account is completely different. Although it is very small, it will WASH gradually and your account will gradually decrease.
Even though you don't lose. It means your initial account is $ 10,000 after 1 month of trading your account is still $ 100,000, in fact you have won a lot absolutely no the number of your trading directives. If you trade less, your winnings are tiny and conversely, the more you trade, the you are winning. But the other winnings are temporarily you have fork out to the floor. So you are just like an unpaid employee.
Did you pay attention that when you order, you will also lose the same fee? That fee is the difference of BID, ASK, sometimes you want to obtain out quickly, you may set the price higher or lower depending on whether you are buying or selling. So, the floor will be added that amount. Exchanges live on transaction fees mainly. So, those of you who are passionate about surfing, check about it.
I'll do an example: Assuming your account is 10,000$, every time you go into the ALL To be to prefer it, you lose 10,000$ * 0.5% = 50$. So make an Excel table, then after 139 times one enters the order you have $ 5007. So do go out and in 139 times, you will suffer 50% of the account, associated with whether shipped to you or lose. If you enter about 3 times a month, 16 days, you will evaporate 50% of your account. The number looks small, but the calculation is terrifying.
III. LEGAL LIABILITY
A person have buy a certain Altcoin, but have no idea about it, accidentally click Buy, then sit back and don't know what the future will look like. One fine day you need money and want to sell some to take care of one's work, but when you click sell, no one buys. Only then will you know that the coin is not liquid. Because it is an extremely lousy coin for people not to take let alone sell. You can for you to the yobit.net floor, which has many kinds of coins.
so choose the exchanges with great liquidity, primexbt is a good choice because our system is built separately, the slippage is relatively low compared to other exchanges
IV. NO CAPITAL MANAGEMENT When you do not manage capital, the following can happen:
You follow someone who believes this bet is good and all hands (ALL IN says as if Poker is still Play). At that time, 1 is the first you do not consider. I just consider that at that time the Coin you bought it dropped dramatically. And in that moment you see a lot of opportunities. You want to buy potential coins, but your account keeps getting smaller and smaller and you can't continue with your plan.
When you do not manage capital, it will lead to extremely bad risks. You accidentally hugged a bad altcoin but the amount of money you bet on it has a lot of % in your account. In the bad case it plugs into the ground like SC or DGB for example, what should you do? I still have to click my tongue and say: "Ignore it, it won't come up anyway". That is, I have not calculated the Spread = The coefficient between ASK and BID when you enter the order.
You see that the DGB dropped from 2300 sts to 250 sts. If you hug, TK will almost fly away.
Conclusion: Please manage capital closely, set aside a necessary amount of capital to save for times of need. Just like you always save some money for unforeseen circumstances such as sickness, illness or ....
V. DIFFERENCE OF BTC AND ALTCOINS
When you buy 1 coin A you use BTC to buy it, it has the form A/BTC, I call this coefficient X = A/BTC. When BTC increases, this coefficient is smaller, meaning A will lose value gradually compared to BTC, which means it's SML like everyone else uses (however, I'm old, so I'm not used to this word). So when BTC increases, A decreases sharply, So when BTC decreases, does the X coefficient increase or not? Not necessarily because BTC is too big for 1 Altcoin. What is wrong in this problem is the comparison of an unequal pair.
Therefore, if you trade for a long time, you will notice: When BTC increases, you are holding Altcoin accounts that decrease over time. When BTC decreases, you see Altcoins increase and you sell, you also have to go through BTC, then BTC is falling, you sell through you will still see a loss or still charge according to BTC but BTC is decreasing. still no word.
Conclusion this always: Limit trading altcoins with the tail BTC because almost 99% of you will lose.
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