Part 2
I just posted an intro to crypto, and this time I want to share a little story about how I got into it.
When I first got into crypto, I stumbled upon an exchange that I can't name, and wow, they had a wild variety of coins from A-Z without any prior knowledge (definitely don't try this at home).
The funny thing is I bought one of the trending coins at that time (I forgot, sorry) because I was confused, with everything from green to red, my simple logic back then was, 'Why would I pick red when I can choose green?' (but I was still nervous inside).
Finally, click buy.
And indeed, once it dropped, I was shocked, 5 million turned into 4.5 million, how to get that money back and sell it, panic set in.... And you know what? That was my monthly money that I used and I put in full haha, so reckless and foolish I was, not even separating it for my wife's needs.
Just looking for ways to sell, it dropped again to 3.5 million, (because the price is already high and I don't know if the decline is healthy or something like that).
In short, I sold by clicking sell, and ta-da! Sold.
So on and so forth, a few minutes later trying again. And it shrank down to 1 million.
Well, that's roughly how it is if you only have guts and buy coins without knowing what micin is or what stable means.
The first lesson is to never try to buy coins that you don't know what they are.
The second lesson is to start buying with stable coins, especially in the crypto world where Bitcoin is known, why not try buying it?
(I will discuss this in more detail later)
Third lesson, never go all in with your money on 1 coin. Remember the average principle here. It's simple; if you understand the math, your total money divided by the number of coins bought means the more coins you buy at a low price, the higher the selling value when the coin goes up. For example, if I buy coin A for the first time at a price of 2 Rupiah, and I have a capital of 1,000,000 Rupiah, then my total ownership of the first coin is 500,000 coin A. (1,000,000 divided by 2)
It turns out that the coin's value dropped to 1 Rupiah. If sold, it would be worth 500,000 and the rest would be lost since it has already been sold. Just like buying 1 kg of eggs for 30,000, the next day the price drops to 15,000 if sold, then of course it's a loss. Eventually, there will be a red notice (-50 percent).
But if I buy again at 1 million Rupiah when coin A is at 1 Rupiah, then my total ownership of the second coin is 1,000,000 coin A. (1,000,000 divided by 1)
There are 2 variables
1. Total ownership of the first and second coins
2. Total amount of the first and second money
So, the average principle is my total amount of money divided by the total ownership of all my coins
So,
A. 1,000,000 + 1,000,000 = 2,000,000
B. 500,000 coins + 1,000,000 coins = 1,500,000
So, I bought 1,500,000 coins with a total capital of 2,000,000, giving me those coins at a price of 2,000,000 / 1,500,000 at coin A's price of 1.3 Rupiah. When the coin's price dropped from 2 Rupiah to 1 Rupiah, I didn't sell, but instead reduced my losses by buying back at the lower price and so on.
This is called the DCA (Dollar Cost Average) principle.
Lesson 4
Never be afraid of value drops. Because a decline is a normal thing. (This requires a lot of knowledge about micro and macroeconomics, even technical analysis of charts)
Thus, the decline in the value of the coins you bought is a floating loss (a value that hasn't happened yet, just recorded) that will eventually rise again.
Last lesson
From the many crypto exchanges out there, choose the one that makes it easier for us in terms of technical aspects like transfers, swaps, conversions, withdrawals, especially with many tasks like on Binance (like a game, if you level up you get bonuses or like a job, if you work overtime you get paid more). My assessment is objective. Many other exchanges also provide tasks that earn bonuses if completed according to the terms and conditions.
Whatever the exchange, Binance is still my personal choice.