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My Bitcoin story
06 Feb 2018 (173 views)

STORY STARTS IN 2004

I started paying attention to Bitcoin about four years ago. The daughter of my friend asked me if it is all right to invest in Bitcoin. The price had increased from US$100 to $1,000 over a year. I advised her against speculating in it. She said that she and her friend had studied this matter and were confident about it.

A few months later, Bitcoin dropped about 50% due to a problem with a Bitcoin exchange. I asked her if she had invested in Bitcoin. She said that she avoided it.

Bitcoin went up and down over the next few years until it reached $1,000 in 2017.

RUN UP IN 2017
Bitcoin ran up in price in 2017 and reached $6,000 in December. See the chart below. 

I decided that it was crazy, so I took a short position on Bitcoin. But I did it with a demo account using $100,000 of demo money. It was not real money. 

Bitcoin continued to run like mad until it nearly touched $20,000 within two weeks. By that time, I had lost nearly $50,000 in my demo account. I decided to hold on to my short position until my money run out. 

After a few weeks, the price fell below $10,000. My loss was reduced considerably. I decided to take another large short position.

Within a few days, my loss had turned into a profit of $40,000.

LESSONS
It was an interesting period for me. To be frank, most times, I do not know whether the price would go up or come down. I knew that the price was crazy, but it could get crazier.

I decided to hold on to my short position because I could afford to. My money did not run out. I just had to be patient.

My patience paid off. Out of the blue, Bitcoin dropped and it kept dropping. Again, I did not know what was happening. So I just sat tight.

The big lesson that I can gain from this episode is - never think you can read the market. It can just go crazy.








 


My Bitcoin story
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STORY STARTS IN 2004

I started paying attention to Bitcoin about four years ago. The daughter of my friend asked me if it is all right to invest in Bitcoin. The price had increased from US$100 to $1,000 over a year. I advised her against speculating in it. She said that she and her friend had studied this matter and were confident about it.

A few months later, Bitcoin dropped about 50% due to a problem with a Bitcoin exchange. I asked her if she had invested in Bitcoin. She said that she avoided it.

Bitcoin went up and down over the next few years until it reached $1,000 in 2017.

RUN UP IN 2017
Bitcoin ran up in price in 2017 and reached $6,000 in December. See the chart below. 

I decided that it was crazy, so I took a short position on Bitcoin. But I did it with a demo account using $100,000 of demo money. It was not real money. 

Bitcoin continued to run like mad until it nearly touched $20,000 within two weeks. By that time, I had lost nearly $50,000 in my demo account. I decided to hold on to my short position until my money run out. 

After a few weeks, the price fell below $10,000. My loss was reduced considerably. I decided to take another large short position.

Within a few days, my loss had turned into a profit of $40,000.

LESSONS
It was an interesting period for me. To be frank, most times, I do not know whether the price would go up or come down. I knew that the price was crazy, but it could get crazier.

I decided to hold on to my short position because I could afford to. My money did not run out. I just had to be patient.

My patience paid off. Out of the blue, Bitcoin dropped and it kept dropping. Again, I did not know what was happening. So I just sat tight.

The big lesson that I can gain from this episode is - never think you can read the market. It can just go crazy.