My nephew is trying to get my sister into crypto. I'm of one mind but would love to hear feedback. Bad idea? Good idea?
@Jezibaba As a long time Forex and crypto trader and the author of a crypto trading bot I have a couple pieces of advice:
1. Never trade money you can’t afford to lose.
2. Avoid NFTs. They’re all scams.
3. You can make money trading crypto but it’s gambling. Crypto isn’t money (yet).
@ScionAltera so 1 maks sense. 2 I agree with. 3. She would not likely be trading it at all. So let's say as an investment??
@Jezibaba Historically “HODL” has been a really good strategy and it may continue to be. But if the bottom falls out it will be very fast. So use a platform where you can set a “stop loss” order and sell automatically if it drops too far. You don’t want to be the one holding the bag after everyone else bails out.
@ScionAltera Since I know very little about it, does it trade like stocks?
@Jezibaba Yeah, it’s similar to stocks especially in the USA because brokers don’t allow margin trading anymore (so you can’t short). The difference is stocks have a lot more fundamental information about the companies. Forex and crypto are driven heavily by the news. The order types are the same as you’d get with stocks or forex.
@ScionAltera perfect. Thank you. That I can handle when talking to her. I appreciate the help.
@Jezibaba Any time! Glad I could help!
@ScionAltera I have a question about bots. Got a sec?
@Jezibaba Sure! What's up?
@ScionAltera can you program them only for hypotheticals for tracking while learning and how would I be able to compile the data?
@Jezibaba I think you're talking about paper trading? Where you analyze the data and pretend to trade but never submit a real order? Almost every bot I've seen has a mode like that so you can test your theory and see what your results would be like, including the one I wrote.
@Jezibaba A lot of the crypto brokers have "game" modes with fake money so you can learn to trade. They almost all allow you to trade very small amounts too, which is different from stocks. You can put $50 in and make small trades without risking anything beyond your original $50. You aren't going to get rich that way but you won't lose big either.
@Jezibaba I learned how to do this in college 15ish years ago on a forex site called OANDA. I still use them and would recommend them. They have a game mode and allow trades as small as $1. Crypto trading turned out to be very similar to forex so what I knew translated well when crypto exchanges started to pop up. For crypto I'd probably recommend Kraken.
@Jezibaba Any time! Glad to be able to help out!
@ScionAltera huge thank you!!