My First Day Crypto Day Trading
An Idiot's Successful Attempt at Making Some Dosh
"$3617!!!!!! In a week?" I was in shock.
My son had called five minutes earlier with, "Have you looked at your Coinbase lately, Mum?" in the whiny voice that usually intoned a plea for an unrepayable loan.
"Sod off, will you!" I flinched at the memory of my disastrous investment in Crypto at his behest in 2018 and steeled myself for more teenage nonsense even though he's a full-grown 22-year-old.
I didn't want to look because it had been a whole load of pain I just wanted to forget. Back when this Crypto thing kicked off I was in the middle of my divorce when my son came to me raving about all his school chums having $50,000+ in the bank. I couldn't believe it. But then I couldn't believe anything that was happening to me at the time, my life was in freefall. I thought it might be fate and this was something I could do with my newly found freedom.
He had said to me back then, "You've got to get into Ripple, that's where it's at!"
With no idea what he was talking about, the part of me that's a bit of a risk-taker, thought, "worth a punt, they seem to know what they're talking about, and after all, if 19-year-olds can work it all out..."
To get into Ripple there were several processes to go through. I can't obviously remember the deets now and but it went something like this: You couldn't buy it with British £s, you had to set up a wallet with Coinbase, send them some cash, then buy some Etherium with it, then get the eToro app, send your Etherium there and then convert that into Ripple. Or something like that. If it's wrong I'm sure someone will find the need to correct me.
The point is it was all too complicated and with my chaotic life, I only got as far as setting up on Coinbase and then got diverted by a sudden flurry of interest in Etherium. So I piled into that with the $500 I thought I had spare.
That did really well and I thought in my 'Whoopee! I'm rebelling against my family and it's working!' mode that I had found my own little secret thing to enjoy privately like a fairy Godmother no one else could see, it gave me a sense of security and sprinkled some magic over my days spent emptying two garages full of 30 years' worth of paperwork, laying them all out on the floor, organising and analysing them in defence against my psychotically delusional husband.
It continued to do well and I ended up putting in yet another £500 I thought I had spare. Then something happened to Etherium, it was like an amoeba that suddenly split itself in two. There was suddenly Etherium and now Etherium Classic. This was weird, things in conventional financial markets didn't do things like that with my hard-earned savings!
Was it true about what everybody was saying, it was all a scam?
I didn't put any more in, and then the whole Crypto bubble thing burst and what had grown to about £2000 shrank in what seemed like a nanosecond to £150 and I was like, "Right, see? Should have listened to the Bank of England, they know what they're doing! When are you going to learn? You've got a whole PhD's worth of paperwork all over every floor of the house that's making a case for never listening to your lunatic ex and now you've gone and thrown money you can ill afford when you've got solicitors tearing at your gullet, at nonsense his son's now got you into! Can you see a pattern here?"
So I stopped. There was no point taking out the money, there was barely £30 left but the time I'd stopped gasping, so I left it to ride and put it all down to experience. That is until he called me last week needing some money to move to London now that lockdown is over. He wants to start a new life in the Big Smoke and who can blame him, I did the same at his age.
Lo and Behold, the £30 was now worth £2304. I can't tell you how I felt.
That was a week ago and I thought wow, that's great I can give him the rent money he needs to start him off. I thought of it as his money and I thought about the fairy Godmother who'd known best after all. I stared up into the clouds and winked at her.
Yesterday he needed it sent over and it had risen in just a week to just under £5000. I cashed in what he needed, celebrated being finally appreciated as a not so nutty Mum, and kept in the rest to play and see what I could learn this time around, now that I can focus properly and am not in an emotional state convinced the world is out to get me. I deserve it.
I played all afternoon with the charts and graphs and got excited about a few growers like CTSI Cartesi fresh out for sale. I ploughed into that with $100 which shot up to $150 in no time so I ploughed in another $1500 and then it started to fall and I thought about all the advice from years ago about not buying at the top of the market. But then how could it be at the top, it had only just been released? People were probably just taking early profits, it was bound to recover.
Then, playing around with Coinbase I realised that the platform doesn't charge you for converting one Crypto into another, there's just an exchange rate but the loss is minimal. So I thought, 'Well it's no loss just spreading it around a bit, then I can have some fun following a few and by spreading it I'll have more chance of catching a similar wave on some and make up my inevitable losses.'
I put £100 each into 5 currencies I liked the look of with no more market knowledge than an idiot, drunk at a company day out at the races and left £500 in Cartesi taking a £200 loss, I was sure it would recover, and left £500 in each of the Etheriums. I like round numbers and being able to remember what my original stake is. One quick glance at the portfolio and I can see how I'm doing, I thought.
I then couldn't sleep all night worrying that the articles the love of my life kept reading out to me about how the whole Etherium bubble couldn't last much longer and the whole Crypto thing was going crash again. I panicked that I wasn't really cut out for this type of thing, punishing myself for leaving money that maybe I can't really afford if Son is to stay in London, on the table for any wandering shark to come by and swipe in my sleep.
In the morning, Hallelujah, I ran to my phone which we promised never to have by the bedside and the portfolio had kept its value more or less only iExec, who I'd put £100 into had doubled in value, so I cashed in the profit, kept my original stake in and established that I have to be a day trader, I can't let these numbers wander off unwatched overnight, my nerves can't take it.
I played around with previewing trades and established that unlike in the old days when broker fees would clobber you, even if I just cashed in £5, it would only cost me 99p to cash it into Sterling. For £11–25, it would be £1.49, up to £50-£1.99 then up to £200-£2.99, then a flat fee of 1.49% thereafter.
It may seem silly to sweat the small differences but when you consider the penny values of the currencies at my entry-level, every penny saved has the potential to run to pounds tomorrow. So I won't sell £201 worth, I'll sell £200. If you're doing that a few times a day, it all adds up to a poor writer like me.
As long as my cash stash is increasing when I cash in so that I can get some sleep at night, it seems much more attractive than leaving it in the bank or in the fake tin of beans I bought my son to hide his cash in at Uni, that he never used.
My son is adamant though that rather than losing any money on trading by converting it into cash, I should just leave it in Tether currencies, these being crypto that more or less is as stable as the Dollar. I've looked into it and while that seems true looking at their valuation patterns, not all these currencies have been forthcoming with proof that they really are tied in in some way. I've decided to put half my stake in the Etheriums which have now calmed down, Litecoin and Bitcoin as a kind of bank, made tiny punts on things like Shiba Inu, just in case they rally cos at $0.000016 that would be awesome, some into Dogecoin while Elon Musk's narcissistic pull is sadly forcing me to read his tweets. But then I'm hardened to manipulative bastards.
And the rest? Well, I do like to sleep and a 1.49-20% conversion cost on something will always beat 20% of nothing.
I started to check the time in various states of America and top cities around the world, thinking about the psychology of investors and whether they cashed out at midnight to get some sleep like me. I started watching different news channels for signs of the bubble bursting again. "It's all psychology!" my lovely love kept saying, "and it's all nonsense! You can't predict anything!"
And of course, he's right in my case, I really didn't know what I was doing. So I thought I'd better do some proper research and find out how others make a modest return with a little flutter, to cheer themselves up on lockdown.
So what is Day Trading?
Day Trading is the practice of buying and selling currencies or shares (instruments) in intervals shorter than a day. By watching movements in their values, day traders can take advantage of arbitrage, price discrepancies and news-based volatility to predict the market's movements and take profits out of their investments over a matter of hours, minutes or even seconds.
Whereas traditional commodity trading hours are fixed, cryptocurrency exchanges are always open, which makes them uniquely lucrative for talented day traders. Here's hoping!
Apparently, 95% of intra-day traders never make any money because if it were that easy we'd all be millionaires, but there are some basic strategies and principles to help you avoid the pitfalls of many who like me just treated it like a girl's night out at a casino.
What I have learned on my first day from general advice available everywhere on the internet:
Set clear goals for every trade.
- Set yourself a time limit then take whatever profit or loss you have and close your position, convert it to cash in other words. If you keep hanging on trying to chase your losses or guessing the maximum return, you could lose most of your investment. Day trading is just that - in and out.
- If like me you're too emotional about your hard-earned, use Stop Loss orders. You can do this on your app to protect the money you can't afford to lose and to stop you from chasing losses like a wild-eyed gambler!
- Don't trade at the weekend. I'm looking forward to the break, to be honest.
My amateur "Noddy" Strategy
I learned that what I do is called Scalping:
I've put £20 in each of the Coinbase currencies. As soon as one's value rises, the listing rises to towards the top of my wallet or portfolio so I can quickly see those that are on the move when I look up wanting to take a break from work or writing. If they go to £23 or above, I scalp the value over the £20, so £3+. Depending on how my Bitcoin and Etherium are looking, if they are growing, I'll put it in there so little cost to transfer. If they're falling I put it into cash. My son says I've got it the wrong way round. But I like to see concrete evidence of my success.
I check my phone all the time, so sometimes I can make £10-£50 in an hour, sometimes nothing, but as I've left the money in there at say £17, I haven't made a loss until I sell which I won't; I've only put what I happily, hand on heart, will not cry about if it all disappeared. I'll put it down to experience and a good old one at that!
So far all the stocks regularly dip below my £20 position, but they also regularly climb to above too. I'd love to be able to have an alarm on them all because I've missed out on some whoppers. I'm sure that's a thing. My son says it's easy to sort on Binance. He says to use Take Profit/Limit orders which are like Stop Losses you can set to take profit, selling your coins as soon as your target return (1–2%) is realised to prevent you from holding on in the hope of bigger gains. (I have found in my short time and at the current market conditions that rises often reverse before you can react and you can go from a nice 2% return to a -1% loss in the blink of an eye)
But everything's easy for youngsters. I'm still getting my head around it, it looks super scary after Coinbase and I don't want to risk wiping myself out at the press of the wrong button!
I still haven't got into Ripple, by the way, that may or may not upset me if I could do the math. But I don't believe in looking back. Je ne regrette rien! As Piaf sang, so do I.
Will I continue? Of course I will.
I'll report back soon...
I am NOT a professional investor and I do NOT know what I am doing. I am a complete idiot who is playing at gambling with money she's more or less written off but sees as free, as it was the result of a mistake made long ago. To follow any advice you may infer from my insane ramblings on the matter would be very foolish, to say the least.
Trading and investing in cryptocurrencies (also called digital or virtual currencies, crypto assets, altcoins, etc.), initial coin offerings, commodity futures, and equities involves substantial risk of loss and is not suitable for every investor. There can be no guarantees of profit nor of avoiding losses.