Black Friday in the crypto market : 30 tips for New Cryptocurrency Traders

I don't think it is right, if we all overlook the event that happened today, because I know what alot of people are going through and it's tough.

What happened today with prices of cryptocurrency was very disheartening, not very bad for the old and professional holders but for those who are still news, it was bad.
I know myself I got liquidated not once but twice, and I know alot of people have gone through the same thing and so I wanted to take this time to address the event that got most people heartbroken and what's the next step from here.

First what happened was what we call dump in cryptocurrency.

Cryptocurrency pump & dump : what is it and how does it happen?

A cryptocurrency dump is a sharp decline in the price of a digital asset caused by its massive consensus sale. In most cases, the collapse of the value is a logical consequence of the pampas - artificial "pumping" of the course of a particular coin. As a rule, a dump leads to the enrichment of large traders. Small holders of cryptocurrency (hamsters), on the contrary, incur huge losses.

As mentioned above, a sharp decline in the value of a digital coin caused by its mass sale is called a cryptocurrency dump. Often, the collapse of an asset is a natural consequence of a mirror-opposite process called a pump, in which the rate of one or another coin is artificially “inflated”.

In most cases, the organizers of the pump and dump are large cryptocurrency holders (they are called whales), but this is not always them. Such users begin to buy a crypto asset at a low price, forming the appearance of interest in it. This naturally leads to an increase in the price of the coin. The increase in value attracts inexperienced traders (hamsters) who start buying the same coins in order to get rich in the future. When the heading indicator reaches its peak, the hamster trimming process or dump begins. Pumpers massively place sell orders and "drain" the accumulated asset at a much higher price. Hamsters are left with a bunch of depreciated coins that no one has any interest in. Usually, the price returns to the original point, but often falls even below the fundamental level.

The pump and dump of cryptocurrencies are always carried out in a coordinated manner by a group of people. Thanks to well-coordinated actions, pampers manage to sell their coins at the peak of value. Beginners who do not have time to grasp the essence of what is happening lose a lot of money. At best, they can remain in a small minus, but, as a rule, their losses are more noticeable, because the purchase begins after the rate increase.

Is it a Normal Occurrence?

I won't say it wasn't expected because that's what every crypto holder should always prepare for.
Most of the prices of cryptocurrencies during last week rose and it was predicted by expect for us to experience a drop in price.

But really what am going to talk to you about is the emotions that you may be going through, because I know alot of persons out there are experiencing such a pull back for the first time. I mean to be honest, we haven't had such a huge drop for past months now, though we had it some months ago but it wasn't this massive.

The effect one cryptocurrency had on the other was clearly seen.
But something to thing about is that you might be going through depression or sadness or anger, but that's part of the market, it's all market psychology.
You have to understand what charting is, what candlesticks represent, they don't represent price action per say, they have an open and a close and a top and a low. They have wicks and bodies. But the thing is, do they really represent human physiology ?
The way that a human reacts when the price hits a certain point, because they are certain levels where people say like "Okay, right here, when it gets up here, I probably should sell because it goes down often" . And then of course, the opposite for support.
When the price drops to a certain level, people say. Okay, from here, it looks like it will go up," and for the years have been studying human psychology, I can predict how humans generally behave .

Now, there are elements of market manipulations, we certainly know this, we've seen it with Wallstreetbets and you know, wall street in general, the traditional markets, centralized finance, but with defi and cryptocurrency, there isn't as much market manipulation but it does certainly exist.

We all know that when it comes to remembering the crypto markets, especially with altcoins and ethereum specifically, the market cap is not very large.
When you have people investing on leverage, you have to understand it's not $1 to $1 ratio between the market cap and what's actually invested into those, alot of it is IOUs.
So when you have somebody comes in and dumps a huge amount let's assume, he is investing 3,000 Bitcoin in the Bitcoin market, that's a pretty considerable amount of money, especially if that's on leverage as well, so there is market manipulation.
But the psychology is when the prices go up dramatically, at some level people are going to think to themselve, "Hey, you know what? I think it's a good time right now if I take out some profits just to be safe, Let me pull out my original investment and let the rest ride" we see that alot. While others talk about strong hands in crypto, it's important to remember that. That's very easy when everything's going up, everyone talks about strong hands when the prices are going up, but in reality, it's a very hard thing to do when the prices are going down because there's not a safety net. There is no safety net in crypto.

What we believe

We believe prices will never go to zero, and obviously I wouldn't be doing this if I thought that they will. But there is no line to where we say. "No one would ever sell below this price" . It can always be made an argument for everything. And the interesting thing is, and I'll tell you what i saw all throughout the bear market, was so many people said things like, "Man, if Ethereum got under $200, I would sell my house and put the money in" well what happens is once it actually gets down to that level, people are then scared and they don't do that.
I'm telling you, I know so many friends that said " When this coins gets to this price, I'm going to go all in" but then it gets there and there are very scared.

Trading vs Investing

Before trading, you have to know the difference between trading and investing, trading is much more emotional than investing, if you are looking at cryptocurrency as an investment, and you tell yourself " I have this amount of money, I'm going to put it in, and I'll let it ride". Then you are probably not going to have nearly as strong emotions as you may, if you were trading. You know, it doesn't really matter because you know you're going to hold on to it no matter what or atleast throughout this bull market. We don't think it's over. But for those who are trading, it's much more emotional, you could lose your money.

Advice for Novice Traders

1. First, understand how to survive, and only then how to succeed.

2. Don't be a blind bull. ALL markets are cyclical. Do not be afraid of pullbacks and market crashes - these are the moments when you can get the most profit.

3. There is a huge difference between trading and investing in cryptocurrencies.

4. Entry points are certainly important, but risk and cash management is where you lose or earn the biggest gains.

5. Beware of gurus and experts offering instant money schemes.

6. Do not assume that if you managed to make a lot of money in crypto, then you can just as well enter other financial markets. More than 95% of stock exchange traders LOSE money. Trust me, this is a negotiated game and manipulated. Stick to what works for you.

7.The best way to trade cryptocurrencies intraday is NOT!

8. The best way to make money in any market is to invest in the early stages in projects that you think have great potential, and before the bulk of the population realizes it. Invest knowing that you can lose 100% of your capital. Such an investor is called a business angel.

9. You should not blindly follow the signals, especially if they come from people unknown to you on social networks or instant messengers.

10. All financial network marketing projects are pyramids, period.

11. If you've made a huge amount of money that dramatically changes your life, do NOTHING for the next 30 days.

12. Trading is not about entering the low, but exiting the high, but about catching the right direction of the trend.

13. Everyone considers themselves a genius in the bull market. However, real traders not only survive, but also thrive in a bear market and high cryptocurrency volatility.

14. The best indicators in charts are price movement and volume. Others can be used, but there is no guarantee that they will make you a more successful trader.

15. Trends can go far beyond what seems rational.

16. Do not trade on the eve of big and important news - it is impossible to predict the market reaction.

17. In most cases, the key problem for a trader is his or her ego, or the need to always be right.

18. You can lose half of your investment and still be profitable if you manage your risks correctly.

19. The best entrepreneurs and leaders are usually lousy traders and investors.

20. The people with the highest propensity to invest successfully tend to work in high-risk occupations such as piloting, firefighting, or the police.

21. You ALWAYS step on every rake. Don't judge yourself harshly when this happens, but try not to repeat your mistakes again.

22. The crypto market is open 24 hours a day, seven days a week, 365 days a year. It's impossible to catch every trend, so if you missed one, don't worry, there will ALWAYS be another.

23. Don't invest in a coin that you haven't studied thoroughly.

24. Beware of coins with low trading volume and market cap. They are easy to manipulate.

25. Don't trade with the money you need to live. This is called "speculative capital" for a reason.

26. The hardest part of trading is doing nothing. However, in some cases, this is the surest step.

27. More than 90% of the quotes of all cryptocurrencies will eventually slide to zero. Consider this when investing.

28. The psychological aspect of trading is the most difficult to master, this skill is not appreciated by anyone at its true worth, but it is he who will play a key role in large wins and losses.

29. The three key problems traders face are overtrading, hesitating to enter, and premature exits before reaching their goals.

30. You should not trust someone other than yourself in trading. Manage your investments yourself even with high risks or don't participate at all.

I hope this article was helpful.
Let's stay positive, our coins will bounce back.