t i’ve learned in my seven years experience as a full-time trader and investor to cover some of the worst crypto mistakes that you can make as a new or even experienced crypto investor.
Day Trading, Crypto Investing, and Personal Finance Tips
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Crypto Safety and Security Best Practices
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Essential Security Measures for Cryptocurrency
all right so the first thing that i want to cover is security safety and best practices that you can do with cryptocurrency.
Recognizing Phishing Attacks and Scammers in Crypto
i want to talk about phishing attacks scammers people imitating crypto figures like even myself or other youtubers two-factor authenticators and just understanding how blockchains and transferring funds work.
Tips to Avoid Financial Loss in Crypto
because all of these things can end up causing like i said a ton of financial loss if you’re not doing them properly so i’m going to give you some of my tips towards some of these things.
Understanding Phishing Attacks in Crypto
so first thing i want to talk about is phishing attacks okay basically when someone creates a fake website imitating something that you’d connect your crypto wallet to or something that you would attach any sort of financial account to.
Avoiding Fake Websites in Crypto Trading
okay anyone can literally take a real website and make a fake version of it so we’re gonna go over to pancake swap this is the real pancake swap okay so they even warn you on top but if we just send in a quick google search okay of pancake swap this comes up as well and many other phishing sites or fake websites are gonna pop up okay we can see right here https pancake swap with two p’s this is a completely fake website imitating pancake swap and if i am to go over here and hit this connect wallet button over here and if they get my password in my private key which you have to enter whenever you’re attaching your metamask to a new device they can literally go in clear your funds out and change your password and you can lose everything.
Using Coin Market Cap to Avoid Fake Crypto Sites
so you have to be extremely careful now my tip for avoiding this is always using coin market cap as essentially your google so if i want to go on to anything like any swap pancake swap sushi swap if you click on it through coin market cap this is going to be the real one and you can see right here this is a completely different url than the fake one they can steal our identity.
Beware of Scammers Imitating Crypto Figures
- Okay, something else to keep in mind is scammers. Okay, so this Instagram account, this is just one of many of the fake Instagram accounts that people use to imitate me and try to get people to sign up for things, send money. It’s awful what goes on and this is so, so rampant.
- If we just searching Craig, okay, this is the real account, fake account, fake account, fake account, fake account, okay, they’re everywhere. So just be really, really careful.
- one’s gonna reach out to you and ask you for money. And if you ever want to verify this, the something that you know is official and look at the associated socials. That way you’re never getting scammed out of money. It is awful what goes on, so be really careful of imitations.
- Just be very wary when you’re sending any money or people are asking you to sign up for things.
- And going back to the seed phrase or recovery phrase for your MetaMask or your Trust Wallet, okay, this is your code that should never be relinquished to anyone. Okay, no support, no one is going to ever ask for this. If it gets out, anyone can change your password and steal your funds. So just make sure that you’re keeping this very private and you’re not sending it to anyone.
Setting Up Two-Factor Authentication and SMS Verification
| Topic | Details |
|---|---|
| Two-Factor Authenticators and SMS Verification | It’s a very good idea to set up these security measures on exchanges. Without them, someone with just your email and password can access your account and transfer funds. Ensure to configure these settings when opening an exchange. |
| Transferring Funds | Be cautious to avoid costly mistakes. Different blockchains like Ethereum ERC20 (mainnet), TRON TRC20, KCC (KuCoin), Algo, and EOS are compatible with USDT. Choosing the wrong blockchain can result in funds being irretrievable. For instance, sending USDT to an Ethereum ERC20 address from a Binance Smart Chain wallet will result in the funds being lost. Always verify the blockchain compatibility before making transfers. |
Importance of Transferring Between Compatible Blockchains
so be very very careful when you’re doing this and make sure that you’re always transferring from compatible blockchains another quick tip it’s just very good idea to send a small test transaction i know the eth fees are a lot i know sometimes fees can be a lot but if you’re going to be sending a large amount of money just send 10 or 20 dollars over make sure that that process goes through so that you know if you repeat it it’ll end up working and your funds will be safe otherwise you’re gonna make a mistake i sent five thousand dollars usdt from binance smartchain over to my coinbase and it’s gone because it’s an erc20 so i just lost five grand like this be very careful okay it happens to the best of us always double check and send test transactions before you pull the trigger on any large sums of money and the second tip that i have is to avoid leverage if you’re not an experienced trader okay.
so leverage can be a great tool if you understand how to use it in your experience and you have the proper guidance however if you don’t know it can be a very very fast and scary way of losing a lot of money very very quickly so i want to explain exactly how leverage works very simply and then explain how you could use it to your benefit okay so basically let’s say you have five hundred dollars in an account with no margin if you want to buy dogecoin at 50 cents you’re gonna have a thousand dogecoin at 50 cents 500 okay use the whole position in order for your account balance of 500 to go to zero it has to go all the way from here down to legitimately zero for you to lose all of your money now .
let’s take the same exact situation let’s take it with a 500 account with five to one margin or five to one leverage okay that means that the exchange is willing to give you five times more than the amount you’ve deposited to take trades with so now you have twenty five hundred dollars worth of capital in that account and if you use all of that to buy dogecoin at 50 cents you’re gonna have 5 000 dogecoin but now in order for your 500 account value to drop to zero the price of dogecoin only has to go down by 20 or one fifth of the way to zero so if we take a look if dogecoin goes down to 40 cents your entire 500 position is going to go to zero so even if it recovers that equity is gone but if you do know what you’re doing and you use leverage to your advantage it can be a crazy powerful tool and i’m going to just do a quick example so let’s say for example .
we want to short mahadel at 3.52 cents okay so we set up our short position so the difference between this entry and your stop loss where you’re accepting that you’re wrong and you want to leave the trade is nine cents if we wanted to risk a hundred dollars worth of our capital on this trade so if we’re wrong we’re willing to lose a hundred but if we’re right we’re going to make 3.8 times 100 so 388 okay in order for us to use cash to facilitate this trade we would have to enter this trade basically 1100 units so if we take 1100 units which is the difference between this and this and multiply that by the price of mahada that we want to shore into it’s going to cost us 3 900 to even take this trade even though we’re only risking a uniform 100 now if we were to take this trade but instead we have an account with 20 to 1 leverage we can divide this by 20 and the capital requirement for this same exact 100 risk trade is only going to be 195.
Understanding Leverage in Crypto Trading
so obviously you shouldn’t be risking 100 on a trade if you’re a total account balance is 195 dollars but the point is is that if you’re starting with two thousand or three thousand dollars and you risk a hundred dollars per trade you still have 30 attempts to go into profit and if you have that leverage you’re not taking on any more risk but you’re able to take trades using less capital and use that other capital for long-term equity positions or to make multiple trades during the same session to be able to increase the earnings and have more opportunity to get into larger cryptos where the
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