Cryptocurrency Investment Journal: Lessons from My Past Mistakes

Reflecting on my past cryptocurrency investments, I’ve come to realize that there are valuable lessons to be learned, especially from the mistakes made during the early phases of market upswings. In this journal, I hope to shed light on these experiences, both as a means of self-reflection and to help others avoid similar pitfalls.

Taking Risks Early

Recently, I decided to inject an additional 10 million KRW (approximately $7,500) into my crypto portfolio. This decision was partly influenced by advice I heard from an experienced trader, emphasizing the importance of assuming risk early. When I reflect on past investment decisions, particularly those fueled by leveraging debt, I see a pattern: while the outcomes weren’t flawless, the results were undeniably positive. Without those calculated risks, my financial standing today would likely be very different.

To outsiders, the concept of leveraging debt for investment may seem reckless or even unwise. However, for those who understand the dynamics of market timing and capital, this approach can offer significant benefits if managed correctly. My own journey serves as an example, and I believe taking early calculated risks is essential for anyone aiming for substantial returns.

Reflecting on Past Dissatisfaction

Despite the profits, I found myself dissatisfied with the 2019–2020 bull market. Looking back, I realize this dissatisfaction stemmed from several strategic missteps. My investment journey during that period was riddled with impulsive trading decisions, often influenced by emotions rather than rational analysis.

Key Missteps During the 2019–2020 Bull Market

In the early stages of the 2019–2020 upswing, I became overly immersed in complex strategies like buying calls and shorting calls. As a result, I succumbed to frequent, impulsive trades, which ultimately led to significant market losses. My brief foray into futures trading only exacerbated this issue, creating a situation where my investment capital was highly fragmented and inconsistent.

The lessons from that period were hard-earned. Although I managed to recover quickly, the journey was far from easy. These experiences highlighted the importance of disciplined trading and the risks of getting too caught up in market hype.

Failing to Observe Market Patterns

One crucial mistake was my failure to recognize the market patterns of previous bull runs. In early 2019, only Bitcoin was showing notable gains, while altcoins were lagging. Rather than patiently observing this pattern and adjusting my strategy, I became fixated on potential gains, disregarding essential market signals.

This impatience led to a pattern of constantly switching positions between assets, resulting in a repetitive cycle of small gains and losses. Instead of capitalizing on the initial momentum of the bull market, I was caught in a loop of “chasing” profits, which eroded my overall portfolio value.

Lessons for the Future

As I continue investing in cryptocurrency, I’ve set new rules based on my past experiences:

1. Risk Early but Calculate Carefully: Taking risks at the beginning of an upswing can maximize potential gains, but it’s essential to do so with a solid strategy. My recent investment aligns with this mindset, leveraging early-stage risk for long-term gains.

2. Avoid Emotional Trading: My experiences with call options and futures trading underscore the dangers of emotional trading. Impulse-driven decisions often lead to unnecessary losses, particularly in a highly volatile market like cryptocurrency.

3. Understand Market Patterns: Recognizing and understanding market patterns is crucial. During the initial phases of a bull market, Bitcoin often leads the way, with altcoins following later. Recognizing this dynamic can help prevent impulsive, profit-chasing behavior.

4. Stick to a Clear Strategy: One of my main pitfalls was the lack of a cohesive strategy. A clearly defined plan, coupled with disciplined execution, can prevent the frequent position switches that ultimately harm profitability.

Conclusion

The 2019–2020 bull market was a period of learning, filled with both successes and setbacks. While I eventually recovered from my mistakes, the experience left me with valuable insights that I carry forward today. By adhering to disciplined trading principles, recognizing market patterns, and taking calculated risks early, I aim to maximize my future gains and avoid the pitfalls of impulsive decision-making.

This journal entry serves as a reminder of the importance of self-reflection in the investment journey. For those entering the cryptocurrency market, I hope these lessons prove helpful in navigating the volatile landscape and making informed decisions.