Explaining Crypto Risk (Important!)
However, there are various categories and levels of risk. The goal of investor/speculator versus of a gambler is to have the risk in your favor.
I woke up knowing I have to write this message. Because so many new people enter crypto and not understanding what's at stake properly. And I, with Blockchain Whispers team want to educate you to the best of my abilities and arm you with what you truly need.
So let me repeat: Every investment is a risk of you losing it all.
People have made fortunes putting a proper risk to reward and having it play its expected course. Read this sentence again, properly.
It means that, EVEN IF:
your risk to reward is FAVORABLE - you can still lose it all.
There are great, I know a guy who came from 0.05 btc to 160 btc in 4-5 months trading... there are great traders who are not complete as investors.
I will get back to his story, however I am trying to keep this organized for you to follow clearly.
D Man's Rules of Crypto Risk Management:
Rule 1 - Be Aware You Can Lose It AllRule 2 - Have a proper money management. This article should help you. And about the trader in example above - he lost it all as he simply didn't have good enough money management.
Just these two simple rules sum it up - EVERYTHING is ALWAYS at stake, and money management controls that risk, aka your exposure.
Now, I will go and try to explain SOME categories of risk, rank them (in my subjective order) and try to find the one you forgot or weren't aware of.
Now, please allow me some chatter as it will explain things, paint the picture more vividly.
Risk of exchange
"But, D, I put money in XLM and Bitcoin on Binance, these are big caps, it can't go down right?"
First of all, Binance can go down. No matter how big exchange, it can go down. It did go down. Big exchanges did go down in past. They got hacked, they got rekt.
Risk level: 1-9/10 depending on an exchange.
Risk of wallet
Your wallet can be hacked.Bitcoin wallet is considered extremely safe, and the risk is very very very low... however there is risk of you having money on your wallet and it being gone.
Risk of a transfer
This is the best thing, thing I LOVE about crypto and that is you can't go and cry to mommy if you are stupid, unprecise, overconfident. I have seen many people, and I mean many, do transfers by mistake. We have seen guys transferring 30,000 ethereum but he put in transfer field 3 and in mining field 30,000 - so he paid 30,000 ethereum for 3 ethereum transaction.
I absolutely love it, as a balance to what world in the last 20 years or so started breeding us to become - idiots. Moms suing sons. Husbands suing wives. Police handling light domestic disputes... the world has gone in the direction of us always asking for some 'protection' from big brother. And as we know from Mafia movies... protection always comes at cost. Cost of your freedom, privacy, and intelligence.
Yes, it can happen to me, you and yet - I know that once transferred from BTC it's gone forever, I check. When I was transferring coins that someone else gave me to invest for them in a fund of one trading team... my hands shaked - I checked like eight times... to make sure it goes on the correct wallet, as I want to eliminate the risk of me in already risky trading activity.
Which brings us to...
Your trade can go against your prediction.I have seen many times running the most accurate and most ethical crypto signals service on the planet, that people misunderstand that accuracy for no-risk trading, no matter how many times I told them. I always use the same example to make them a point, and most listen to me. Some don't.
If a winning trader that has 9/10 SUPERB (world class and more) level accuracy has no money management and always invests all in his trades, he will go BROKE.
If a 50-50 trader has a good money management, most likely he will end up in PROFIT (yes, you read that right).
So money management is by far the most valuable lesson you can learn when beginning trading.
The coin can completely disappear, vanish, seize to exist.Just because you guessed it right, doesn't mean that tomorrow the news can't appear stating the coin owners actually don't have any coins, it's all spent and all like a house of cards... causing coin to drop to zero. (google or youtube story of Bitcoin Cash... sorry, of Bitconnect :)
I will try to challenge you more and more about trading risks as I want you to be AWARE of them.
Risk of the community
Tell me, who do coin makers like? Gamblers or investors?
If you answered investors, you're wrong.
Smart investor sets a limit buy order, checks the charts, and patiently waits.
Gambler goes market order, causes the price to pump, making their coin look better.
Which brings us to
Know your statistical improbabilities!
Go back to the case from the beginning of this message - about a winning trader with statistical improbability... still losing.
Poker players call it bad beat... bad streak...
You must know, and be truthful with yourself is your trading a real bad beat or you didn't have a true edge to begin with.
Coin makers, community, will almost NEVER talk about winning traders with proper money management, and proper accuracy.
The (stupid) community, coin makers and all are against us by promoting gambling all-in lottery-winning stories of a guy who did 100x.
In 2018 I didn't do 100x even on one single coin, yet I managed to bring the ENTIRE Blockchain Whispers (smart!) community to make 20x on Pundi X - in which I had early, almost-insider news - I knew exactly what's going on, why it was undervalued etc.
Would you rather make stupid 100x or smart 20x?
Well - most would answer 100x, but those same greedy, uneducated, self-centered guys would over the next couple of trades make that 100x into 2x or 0x by losing very very soon afterwards.
Because their entire model of investing is based on stupidity and luck. And luck takes turns, while stupidity remains (unless you deliberately takes steps to change it, like educate yourself.
Blockchain Whispers is a community of insidersI can now say, we, the Blockchain Whispers have so loyal community, that when we introduced the sentiment rating button, our community as a whole had an impressive strike rate of accuracy.
It shows that we, the Blockchain Whispers community, are more educated, and superior to the outside following-cnbc-and-coindesk type of community.
And I don't even talk about our premium signals yet.
I talk about me singlehandedly succeeding to build the most loyal, most intelligent, most focused crypto community on the planet.
By talking to you and educating you about things (like this one!) that matter and that are not in anyone's interest (coin makers, exchanges, pro investor groups) to be shared.
Because at the end of the day, I want to help an ordinary guy to become rich and free. It's little known, I came to crypto rich. I made more money with my previous business (which I ended up giving away) than in crypto. I do what I have a passion for. I will have very little joy seeing some hedge fund getting rich. While I'll love to see a guy who followed Blockchain Whispers driving a Lambo, banging chicks, or even helping his family and friends.
This is why I started Blockchain Whispers signals, so that I can bring a pro team, A+ level, a type of team I could NEVER build in Wall street and banking world reserved for not most intelligent, but most connected... and give you an edge over everybody else in a fair market.
All the above mentioned risks remain. And you, my friend, I want you to be aware of it at all times. Never borrow or use any money you can't afford to lose to put it in trade or in crypto for that matter. Yes, crypto provides an opportunity for absurd riches, however, fools-test comes first. If you pass the fools-test, then you have a bigger chance to start winning.
The fools test is: are you attracted to 100x one-timers, lottery winners types or of a steady gainers who truly make money?
Even if you don't know anything about crypto, trading, ... by being disciplined, and intelligently-focused, you can be in advantage over the idiotic-mass who will just donate you money.
If you feel you are ready, I invite you to do another smart thing and that is... put a team behind you, a well-researched, odds-in-our-favor, working-like-a-dogs type of passionate team that will serve as whispers in your ear telling you that tonight's gonna be your lucky night. :)
With Blockchain Whispers premium package, you get access to the best of the best (remember that smart community that voted correct sentiment? well, this is the best, most filtered section of it). You get access to our crypto signals, for coins we think are a good buy.
You still need to follow your discipline, money-management, and decide what makes sense for you to invest in and what doesn't. It is your call, however, with us on your side, I think you are stronger, and you have an edge strong enough to beat the outsiders the mass, the industry that wants to take your money... and earn a bunch on the 'donations' of undisciplined idiots that are not willing to take an extra mile or that don't have us to guide them on the journey.
P.S. This is what our members say about Blockchain Whispers.
P.P.S. This is about our Premium membership.
P.P.P.S. Risk always applies. Be aware of it.
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