Becoming a Professional OTC Trader from Scratch (Part 4)

After the first few articles were sent out, many friends asked me various questions through WeChat. Here I ask everyone, if you have any questions, just comment at the end of the article. I will try my best to answer all the questions before I send out the next article. Now I receive a WeChat message asking a question every once in a while. I can’t reply when I’m busy, and I forget about it after a while. This is not good for you and me. I am very happy to answer your questions, but try not to send me WeChat messages casually. I saw that I have 1400+ WeChat friends today. If you ask me a question casually, I may not be able to do anything. I don’t want to use this WeChat for fear of being affected. I ask for your understanding, please!

Chapter 6: Enter the Pit

Old members in the cryptocurrency circle all know that falling into traps is the norm, and there are few senior members who have not fallen into traps. The reason for so many traps is that Bitcoin itself is too new and too revolutionary, with infinite possibilities. Infinite possibilities also mean infinite opportunities and risks. Opportunities and risks have always been a pair of twin brothers.

Similarly, there are countless pitfalls in OTC transactions. If you are not mentally prepared enough and have a strong will, it is almost inevitable to give up halfway. Let's take a look at the pitfalls that may occur in the early stages of trading.

1. Ransom orders

When newbies set up transactions, they often don’t know how to set up protection mechanisms correctly. Some bored guys will discover this flaw of newbies and set up a large number of transactions to lock up the trader’s coins, and even ask for a certain amount of coins to cancel the order.

Countermeasure: Ignore him and be patient. As long as you don’t release it, he can’t get anything. At most, he can wait until the appeal window period to complain. The trader’s road is long and he doesn’t care about this little time.

2. Invalid orders

There are many reasons why remittances cannot be completed when making overseas remittances. Therefore, you must have a good attitude towards any order. Do not release the coins until you receive the payment. Even if you have checked that the remittance is valid, but have not received it successfully, you must not release the coins. Once the coins are released, it will be meaningless to say anything.

3. Fraudulent orders

The buyer transfers the money completely according to your payment information, but sets a lock. In fact, you cannot complete the collection, but it is normal for you to check the transfer status online. You can also call to inquire about the transfer, but they will tell you that it takes time or the other party to release the lock. However, the other party will desperately urge you to release the coins, and swear that the transfer has been completed. If you soften your heart and release them, you are giving the other party money for free. Don't expect to get it back. The way to deal with this situation is the same as the previous one. Before receiving the payment, just treat the transfer as non-existent. Transactions require such cold-bloodedness!

4. Account Lockout

Western Union charges a large number of small transactions of around US$100, and the account can be easily locked. This is due to the global anti-money laundering mechanism. I will not go into details about the specific reasons, but there may be a chance to restore the account after 180 days after being locked.

5. Price Fluctuation

The price of Bitcoin fluctuates more than any other asset. If you don’t hedge well, you may not be able to buy it back tomorrow if you sell it tonight. That is actually a real loss. How to hedge well is also a science, and I will tell you how to solve this problem later.

I encountered all the situations mentioned above. I will use this article to describe the process of my account being locked and the solution.

Chapter 8 Account Lockout

This article explains in detail how my Western Union account was frozen and why it was frozen. I will give the explanation in the following chapters.

The transactions on July 12 should be the reason why my Western Union payments were frozen. On July 12, I completed 13 transactions for US dollar payments. In fact, there should have been 20 transactions established by customers on that day. For a novice, this is an extremely brilliant record. Since I set the transaction limit to US$100, more than 9 completed transactions were less than US$200, and the transactions that were not completed in the end were basically between US$100 and US$200. But suddenly starting from a certain transaction, all my remittances were locked. I remember that there were about 6 transactions at that time, and none of them could be confirmed to be received. I called Western Union, and the other party just said that it might take time, but the collection could not be completed.

There was even a transaction of $120. Western Union told me that it was completely normal and I could go to the bank to collect it. I confirmed it again and again, but the other party urged me very urgently. Under the joy of too many orders, I finally made a fatal mistake. I released the currency to him. You can imagine the consequences. I lost the $120. If Western Union had not locked my account on that day, I might have been able to collect the money. But the account lock that I did not expect appeared. When I checked the account in the evening, because of the lost $120, an exciting trading day that created brilliant results became a waste of time.

At that time, I didn't know that my account had been locked. I miraculously completed an $800 transaction the next day. However, since then, I could no longer receive any remittances and many transactions failed. It was not until a customer told me that I could not complete the remittance under your name that I realized that the account under my name had been frozen!

I called Western Union to inquire about my account status, but I was always told: No comment, we cannot provide you with any information. At that moment, I deeply experienced what "arrogance" meant. After I made repeated phone calls, an operator gave me a suggestion: Try receiving the payment under a different name!

Then I googled and found that many people had the same situation, and their names were inexplicably blocked by Western Union. This confirmation was a huge blow to me at the time. Western Union was my only channel to receive foreign exchange, and the only name of the recipient I could think of was myself. I was at a loss as to how to proceed in the future. Was my trading career coming to an end?

I am on a business trip today, so my Alipay group has stopped sharing. I will just briefly share some market information:

Bitcoin has experienced another round of slump, and many holders have begun to doubt their lives. Looking at the historical K-line, the market has been repeating the same story. When it rose from 1500 to 3000, it returned to 2200 in a few days, and then it took several months to trample 3000 underfoot. This process made countless people lose their chips. How long will it take to trample 5000 underfoot this time? No one knows.

Personally, I think that if you consider Bitcoin as an asset, then don’t worry about short-term price fluctuations. The probability of being wrong when buying and selling is much greater than the probability of being right. Who knows if it will go up to 4,500 again in a month?

The following is a post on my WeChat Moments that received a lot of likes. The current market conditions also show that I really cannot predict short-term prices. Buy Bitcoin or blockchain assets with the mentality of a farmer planting crops. The investment will pay off, but it takes time and luck. The crash provides an additional opportunity for low-cost buying for those who want to participate.