Cryptos 101

My 7-day course on how to lose money on crypto

Day 6: Look Ma, no robot!

The good thing about bot trading is that you probably know nothing at all about the tokens you are buying. So no emotional investment.

You don’t even have to set the rules. Just take the defaults, usually the Relative Strength Index (RSI), Stochastic result, Bollinger Bands and StochRSI. Look these up on Investopedia if you want but you don’t need to. The defaults will buy when the indicators show that the cryptos are oversold and sell them when they are overbought.

I tried it for a week. This was the result after four days:

dashboard view

I COULD HAVE HODL’D AND LOST AS MUCH

Looking at the individual tokens was even more alarming Some were 15% down. What are your chances of recovering these percentages? That was about the record in June for bitcoin (BTC), 16.3% down compared to 30 days before. I could have lost as much by putting my savings in bitcoin and HODLing.

I COULD HAVE BET ON EOS

If I had been really courageous and bet on EOS mooning because of its mainnet launch (doesn’t the jargon sound impressive!), I could have lost 28%. I had my eye on other tokens that could have lost me close to 50%; the consumer credit token BCPT *built to last” and the green energy trading platform WPR.

After 5 days of this I decided I might as well lose money by my own efforts. So I decided to cash out some of the biggest duds, take my losses and follow the bot recommendations for buys and see what happens.

THE PSYCHOLOGY OF INVESTING

The following blow-by-blow account might seem dreary. If so, just look at the charts and skip to the summary. But I think the detail could be psychologically interesting.

First I sold NEO (-7%), GNT (-10.09%), OMG /-7.92%), XMR (-6%), QTM (-7%).

They weren’t the worst but they had the most invested in them and seemed most likely to find buyers. A number of plonkers, flagged earlier as buys, seem to interest no-one else as a prospect.

Among these I’d put BOX (10% in two days), LSK (-7% in two days), REQ (-16% in 3 days), AST (-10% in three days) and SNM (-16% in 1 day). It gave me over 3.5 ETH to reinvest. However, the default is to cancel a sell order after 5 minutes, to avoid being caught by a crash. So I had to go back and try others (ones that had the lowest loss) and ended up with 8 ETH.

BATTLING THE BOT

I bought SNGLS immediately and waited for a new signal. The automat also wanted to put BNB (Binance coin) — the platform token that saves you on trading — up for sale, so I set the BNB to hold. It is 21.25% up in dollar terms though down 1% against ETH. Half an hour later the bot flagged GNT, a previous choice. I bought, giving me a total of 9 ETH invested and a 2.67% loss.

MTL failed to sell. So did XMR and ZNC. I put them up for sale again but I had 9 ETH invested. Within 15 minutes XMR came up with a triple buy recommendation. I cancelled the automatic order.

This was just the first morning. I decided to follow just these tokens for the moment. I put them into a spreadsheet to track what was happening.

THE FIRST DAY’S SPREADSHEET

By the end of the day, this was the result, without trading: The BCPT record caused problems.

first chart

THE MORNING AFTER

The next morning this was my record. A number of trades had taken place automatically, if there were profits. I sold off all the tokens that were more than 2.5% down, around six nd bought more with my 4.7 ETH released. But I had to repeat my order to sell stORJ, at 4+% below purchase price, and finally had to go to the exchange to sell MTL at a 10% loss.

second chart

MACHINE LIFE

So the bot ended the first 24 hours $179 down and I came in next morning $15 up. That would have been encouraging,, except that I had to spend an hour on checking out the investments. Pretty much minimum wage (less than that in Switzerland).

WHAT I CONCLUDED

From my previous experience, this is what I expected. My assessment is that allowing all tokens to be the machine’s choice is not a good idea. So next I decided to restrict the choices to tokens I thought had enough of a future — or in other words, those likely to have enough investors that a single trade could not sway the market.


 

You have finished Day 6 of my crypto investing course following up on superforecasting cryptocurrencies (I never found a way)

Please don't take this as financial advice, It's meant to be entertainment.

Day 1: Get some tinkerbell tokens and HODL
Day 2: Pick something that will be useful
Day 3: Now Trade!
Day 4: Technical Analysis: Chart your way down
Day 5: What my robot taught me

TOMORROW: WHERE DO WE GO FROM HERE?