My biggest mistakes as a cryptotrader: part 1

Even though my time as a cryptotrader has been more lucrative than I could've imagined, it is quite a hectic life. Every day one takes multiple high risk decisions, some of which turn out well while others don't. As a full-time day trader who depends on making profit in order to put food on the table, you need a thick skin and be able to accept that not every decision turns out the way you had anticipated. In this series I will list my biggest mistakes as a trader, I will reflect on what I could've done differently and how I will adapt my strategy in order to avoid the same costly mistakes in the future.

As a matter of fact, as a daytrader I make mistakes on a daily basis. No-one can predict with certainty how the market will evolve. The key to successful trading is to make more positive trades than negative trades and end the day with a positive balance. In this series I will not talk about the daily insignificant mistakes that are being compensated by positive trades, but about mistakes that have a serious impact and require me to reflect on my strategy.

Agrello Delta

It was somewhere in September 2017 when Agrello Delta had just completed their ICO. In those days it was customary for ERC20-tokens to be introduced first on EtherDelta, a decentralized exchange. Often you could buy new tokens at or even below their ICO price, without having to go through KYC-procedures. Agrello Delta seemed like an interesting project, so I took it upon me to compare the ICO-price with the best sell-order on EtherDelta. I checked the DEL-ETH orderbook and saw that the tokens were being sold under the ICO-price. I then decided to buy the tokens for a total value of 1 ETH (about 300 USD at the time).

After having received confirmation of the transaction, I noticed to my dismay that the ticker of Agrello Delta wasn't DEL, but DLT. After further investigation it seemed I had bought tokens from Delphi, a project in the field of 'prediction markets'. To make things worse, according to this Medium-post, the project had recently ceased to exist. Delphi had organised a refund, but the end-date had already passed. This was also a time in which the crypto-markets had taken a dive, my portfolio was 'in the red' and I hadn't learned yet how to be consistently profitable as a trader. There I was holding a bag of useless tokens.

Turnaround

Ultimately I was able to turn the situation around to my advantage. "If I make this mistake so can other," I thought, after which I offered the tokens for sale again through EtherDelta, but this time at a price of 1.7 ETH. To my surprise, they were sold 5 minutes later. So in the end, this embarrassing mistake has actually turned a profit of 0.7 ETH, which was about 200 USD at the time (even though Ethereum was worth a lot more when I actually cashed out into Euro).

Lessons

Obviously learned a few lessons out of all this. Now I always double-check a token ticker before I place an order. Am I actually buying the right tokens? The best way is to go to CoinMarketCap.com, look up the token, click the tab 'markets' en then click on the specific market of the exchange where you want to buy the tokens. This should link you directly to the correct market. However, I often buy tokens that haven't been listen on CoinMarketCap yet. But some additional research will quickly point you in the right direction. If necessary, you can always ask around on the Telegram-channel of the project.

This was also the first time I smelled trouble when it comes to EtherDelta. At that time EtherDelta was the biggest decentralized exchange when it comes to daily volume. Nowadays the exchange is but a mere shadow of itself for a number of reasons. While most exchanges will promptly delist a project that is no longer active, this did not happen on EtherDelta.

Furthermore I also learned that cryptotrading is a ruthless business and that the least mistake can cost you dearly. It also thought me to diversify well and never to put too many eggs in one basket. Currently I own at any given time about 50 different tokens and I will never invest more than 5 ETH in one token. You never know what can happen.

This was the first significant mistake I can remember. But many have followed. In a next article I will talk about coins that I have sold way to fast. To be continued.