The title of this post is a bit provocative and it may not be too popular – telling people on a cryptocurrency site that they are probably crap at trading cryptocurrency is a bit of a low blow
But the simple fact is that it is true –granted not for all of us, but certainly for the majority of us. The data on this is clear. Most people that actively trade, be it in common stock, in forex, in crypto, in options, in commodities, in oil, in coffee, in whatever, will over time lose money. Just google it and you will find thousands of articles explaining why most (90% seems to be the number most commonly quoted) active traders fail
So why do people continue to trade?
Bar a few exceptions on this site (I imagine just a few, and I don’t know who they are), ‘we’ as individuals, for the most part, do not have the necessary tools to succeed in crypto trading
But still people do it – day after day after day I see many posts with price predictions based on charts with candlesticks and lines and specific patterns drawn on them
And to be clear there is nothing wrong with this – I follow a number of people that do this as I am interested to hear what they think. The mistake is for other people, who don't have that knowledge or skills, to try to copy them
But I get why everyone is into it - because trading is cool, and traders are successful and rich with big houses and nice cars and beautiful women
Well no, according to the evidence a maximum of 10% of them are… The other 90% see the 10% posting about their successes and they get sucked in to trying to copy them…
…and then trading for them ends up like this
So what traders do we have on Steemit?
Group 1: Those that are successful – congratulations those of you that are genuinely in this group, you are making money!
Group 2: Those that are unsuccessful, and have realized this and have changed their behavior – congratulations those of you that are genuinely in this group, you are saving money!
Group 3: Those that are unsuccessful but continue doing the same thing thinking that something is going to change – oh dear, you are losing money
So, who am I to talk?
Well, firstly I am not a trader. I haven’t sold a stock for a couple of years now, and I have never sold a cryptocurrency
I have no clue about technical analysis, and therefore I don’t do it. And I don’t need to understand it or do it, because instead I use other things – skills, traits, whatever – that help me – not at trading, but at investing
- I have the insight to know that I am no good at trading – so I don’t trade, I invest
- I have a strategy – to identify and invest in things that I think and hope will be bigger in future than they are today and which will pay me to own them. That could be crypto, it certainly is STEEM, but it could equally be a company that brews beer
- I have time and I have patience – to wait for an investment to come good, in a month, in a year, in 5 years. I will never be forced to sell at a loss to pay my bills
And that’s it – that’s all I need
How do we avoid failing?
For most of us, the only way to avoid failure is to not trade. Or at least to only trade with money we are prepared to lose. Most people here will also have the three traits I mention above, and many here will have many more that I don’t have or perhaps am not even aware of. The key is to work out what traits/skills you have that work to your advantage, and to use them
And for most of us, this may be boring, but that means buying and holding
- Identify a goal - % return / $ amount / retirement at 40 / whatever
- Identify a timescale
- Identify investments that you think will deliver on that goal in that timescale
- Make those investments
- Wait a bit more
- Wait a bit more
- Wait a bit more
The World is not a get rich quick scheme, it is a get rich slow scheme
Steemit is not a get rich quick scheme, it is a (hopefully) get rich slow scheme
Cryptocurrency investing is (mostly) not a get rich quick scheme, it is a get rich slow scheme
Common stock investing is (mostly) not a get rich quick scheme, it is a get rich slow scheme
Most of us should not be trading, we should be buying high quality cryptocurrencies, and holding onto them for dear life
Don’t lose your money quickly, get rich slowly
And one last point. If you read this post and think…
…then there is a 90% probability that over time you will prove my point for me. I highly recommend that you take the time to honestly evaluate which of the trading groups above you fall into. Chances are it’s Group 3
Thanks for reading