Is Crypto Trading Worth Investing in? Here's My Experience

I've always thought of financial trading as a very risky endeavor that requires years of learning and practice to even stand a chance of making money.

And I avoided anything trading for as long as possible.

I've had a friend try to convince me unsuccessfully about starting forex trading, but I just couldn't risk my money and time on a system that I know could wreck me financially.

However, crypto came around and grew so much that it became part of our everyday life.

I get paid in crypto many times. I hold a few wallets with crypto savings, and I make payments for my Namecheap hosting with crypto.

So, you can see that many things I do on a daily basis revolve around cryptocurrency.

But in all these, I never thought of trading crypto or risking my money in any crypto related venture.

My First Taste of Crypto Profit

However, things changed when I received a notification on Binance to farm crypto tokens for free.

All I needed to do was use part or all of my crypto savings to support new crypto tokens risk-free and I would earn free tokens before they launched.

I was convinced.

I tried it once, twice, thrice, and it felt good.

I earned a few tokens before they launched and exchanged them for stable coins after launch, without losing any money.

I would get back all the crypto I used to support a crypto project once the farming period was over.

It felt really good.

I would follow new crypto projects and watch the time tick in seconds as they launch.

However, I didn't know that these activities were fueling my greed. As I watched new tokens launch, I saw their prices skyrocket.

I remember a particular token, SATS, which was touted as the new mini-bitcoin. It rose by almost 30% within the first 24 hours of launch.

This crypto token had a lot of momentum and continued to soar in price as the days went by.

So, I thought to myself, what if I try to buy a newly launched crypto token and sell quickly after making some profit.

That should be a good idea, right?

Right?

Well, I was wrong.

My First Big Crypto Loss

Within the next few days, I received a notification about the next crypto project launching on Binance.

I could make money by farming this new crypto and also by scalping it for profit within the first few hours of launch, so I thought.

I quickly committed funds towards the launchpool and made a few bucks after some days of crypto farming.

Now, it was time to play big and earn some quick profit, I thought.

On the day of the launch, I watched as the timer counted to zero. I then placed my order of $800 to purchase this new token with the belief that the price would rise sharply.

Alas, I was wrong.

My order was at the peak, and the price continued to drop. As I watched, the price continued to drop.

I could feel my heart pounding and my hands getting sweaty.

As the price was dropping, I didn't know what to do. Should I sell and take my loss? Or should I hold with the aim of recovering all my losses?

I couldn't guarantee that the price of this new token wouldn't go to zero, or that it would rise back up.

So, I decided to do what felt sensible to me at that moment.

I sold it.

I got back $280 which represented a 65% loss incurred in a matter of minutes.

That experience felt surreal. I mean, I just lost more than 700,000 Naira in less than 1 hour.

Who does that?

But something else was even more strange.

That was just the beginning of my experience with trading cryptocurrency.

Learning to Trade Crypto Markets

With me losing a huge chunk of my crypto holdings, I felt that I needed to cover the knowledge gap and go fully into crypto trading.

At the time, I didn't know that revenge trading was starting to build up.

I was fueled by my desire to recover my losses, even as a complete newbie in the market.

I quickly hopped on YouTube and started watching every video on crypto trading that I could lay my hands on.

I watched videos on different trading strategies and concepts, and the psychology of trading.

I watched videos of people who lost money trading crypto as beginners and what they did to improve their trading.

I watched videos of traders backtesting their strategies and making recommendations on the trading strategies with the highest probability for profit.

I soaked in all the information I could find on crypto trading and felt a little confident to start trying things out.

Trading the Spot Market

My first plan was to start from the basics. Buy low and sell high. So, I started trading on the Spot market.

I made a few profit at the beginning but quickly realized that I couldn't trade on the opposite side.

That is, if my analysis showed that a particular crypto would drop in price, I couldn't do anything to make money from that information via the Spot market.

I bought a few crypto that dropped in price instead of rising as expected. I would then do what crypto enthusiasts call “buy the dip” which means to buy more of the crypto as it hits new lows.

The issue is, that strategy works for only traders who are bullish on the token and willing to sit on it until they realize their profit.

I, on the other hand, just want to make money via crypto as quickly as possible. I wasn't ready to tie down my money for months just because I'm bullish on a crypto that continues to dip.

So, I moved on to the next logical step.

Moving on to Margin Trading

Margin trading was quite interesting because I could fully trade crypto and utilize all the strategies I was learning.

I could buy and sell crypto for profit, so whether the price of a particular crypto is projected to fall or rise, I could be in a position to make some profit.

This worked so well at first. I made a few profits here and there, and a few losses that didn't eat into my profit.

However, I discovered that margin trading was too manual and slow. I had to borrow tokens for every “sell” trade and make careful calculations on how much I could make or lose.

This meant that I either entered trades late or made a wrong calculation which often led to a loss.

One time, I even mistakenly forgot to repay a borrowed token and used it to enter an opposite trade, which led to a loss.

It was at this period that I got my first liquidation calls.

First, from my cross margin wallet:

And then, my isolated margin wallet:

Margin trading was all confusing, and I needed a smoother experience.

Trading Derivative Contracts - Perpetual Futures

Trading perpetual futures was a real breath of fresh air. It did exactly all the things I thought margin trading could do, and faster too.

Now, I could really put my trading strategies to work and start making money trading crypto.

I made gains and made losses, and I really enjoyed the learning experience while trading perpetuals.

I learned and implemented different strategies that worked and I still believe that many of those strategies still work.

However, trading crypto and any financial markets for that matter, requires more than a good strategy.

A lot of things are at play, and you need to have most of them in your favor to stand a chance of making consistent profit.

A few things went against my crypto trading plan, and I want to highlight them below.

Low Capital

I never knew that having a low trading capital could be a significant factor in whether you become a profitable trader or not.

However, I now know why a lot of experienced traders favor trading with funded accounts rather than trading with their own capital.

With a funded account, you can make reasonable daily returns without exposing much of your capital to risk.

Here's an interesting read from Babypips experts:

Trading small accounts is not just worth it. You either go big or go home!

Imagine trading with a $50k funded account. If you trade with just 1% of that ($500) and make a profit of just $50 per day, you could easily make over $1000 per month.

However, my experience was quite different.

At this point, I'd lost a lot of my capital via revenge trading, and was left with a little above $100.

If I traded with just 1% of that ($1), it would take me years to make a reasonable profit, otherwise, it'll all be a waste of time.

So, I was left with the only option, a risky one, where I exposed the bulk of my capital to risk.

At a point, I was risking over 50% of my capital just to make a reasonable profit.

And this isn't sustainable over a long period. It takes just a single big price fluctuation to liquidate my account.

And it did happen:

But some other factor contributed to my losses.

High leverage

With derivatives, I was exposed to very high leverage opportunities. Unlike with margin trading where I could do up to 10X leverage, I could do up to 100X leverage with perpetual futures.

And you know what that means to a crypto trader with a small account. I could make gains plenty of the time, but I often get wiped out eventually.

I was having liquidation calls back to back, almost on a weekly basis, and the more I lost, the more I came back in with more funds.

And the cycle continued until I got to a point where I had no more funds to get back into trading.

Greed is the worst thing that can happen to a small trader, especially one that has a history of losses and is looking to recover.

It's all a trap that you might never recover from, if you let greed take the center stage of your trading.

Is Trading Crypto Worth It?

Now, to the main question.

Is trading crypto worth investing the time and money?

Should you learn to trade crypto as a legitimate means of making money online?

Would I ever get back into crypto trading if I get the needed funds?

Well, my opinion is that newbies should avoid trading crypto markets. There are easier and less stressful ways to make money online apart from trading cryptocurrency.

You could trade crypto as a p2p exchanger, you could farm crypto for profit, and even put your crypto in interest yielding savings wallets, but I'll advise you to avoid trading the markets.

A lot of things are involved when you trade, and it doesn't matter how good your trading strategy is, because it takes just one wrong move for you to lose.

Heck, the volatility of the crypto market means that you could do everything right with crypto trading and still be rugpulled overnight.

However, that doesn't mean that you shouldn't hold any crypto that you're bullish on. That doesn't mean that you should abandon the several opportunities showing up in the crypto space almost on a daily basis.

By all means support the crypto projects that you believe in, and participate in crypto activities that have potential for profit, but use only funds that you're willing to lose.

Personally, I believe that I'll get back into crypto trading in the future if I'm able to secure a funded account. But for now, I'm quite happy to stay on the sidelines.

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