Warning: This article contains spoilers for Game of Thrones, the TV series.
For a lot of young pups, trading on Bitcoin order-book exchanges can be a daunting task -- a Meereenese knot of technical jargon, complex user interfaces, and more graphs than you can shake a Greyjoy sausage at.
But you don't have to have a maester's intellect or a Lannister's purse to get started with trading. You can start off small, making a few trades now and then and keeping at it until you become comfortable. As you spend more time on the exchanges, the desire to find more detailed guides and experienced mentors will manifest naturally. Keep these tips in mind, and you will be mothering dragons in no time.
1. Learn the jargon
A "bull" market means the prices are going up, a "bear" market means the prices are going down; bulls attack people by thrusting upwards with their horns, and bears attack by swiping downwards with their paws. The jargon is the single most important thing for newbies to learn, since most exchanges devote little effort explaining it. Without a grasp of the vocabulary, you will be hopelessly lost. Don't worry though; over time, terms like bid, ask, or wall will be as second-nature to you as the word "friendzone" is to Dothraki.
2. Keep your portfolio low-risk
Navigating the volatility of bitcoin's current price is much like navigating the labyrinth of life politic in King's Landing. Maintaining a balanced portfolio of 50% bitcoin and 50% fiat is a good way to hedge your bets in either direction, so no matter which side eventually wins, you'll be able to recover quite nicely. (Or at least until the imp finally deals with his daddy issues.)
3. Learn from the masters
Wading sword-in-hand into an exchange with little or no preparation is a quick way to lose all your money. Thankfully there are plenty of places -- from blogs and forums, to fellow bitcoiners -- where you can learn the basics. As you learn and improve, the level of mentorship you'll require will also change. Before you know it, you'll be needling throats with the best of them.
4. Don't get too emotional
Of all of the commodities out there, bitcoin probably has the highest amount of emotion attached to it. Traders buy and sell bitcoin as if they were waging a sacred war against the Iron Bank of Braavos. The same traders curse plummeting prices like they would the murder of their beloved sisters. The important thing to remember is that you will always have an advantage as long as you keep your wits. Don't celebrate prematurely, and above all, mind where you're stepping!
5. Figure out what kind of trader you want to be
Are you an obsessed day trader who stares at the exchange fourteen hours or more per day, trading non-stop, and paranoid that you might miss a key opportunity? Or are you a more detached swing trader, who only checks in once a day to quickly make adjustments to your position, never spending more than a couple of hours a week in total? Most people will start somewhere in the middle, and over time will naturally gravitate towards one style or the other. Don't forget that even the cool swing traders can have bad days though, and occasionally, the neurotic day traders do go flying.
6. Watch the whales
Whether you're monitoring their moves, taking an opposite position, or just plain trying to stop them from poisoning your son at his own wedding, there's no disadvantage to watching what whales (traders with large amounts of currency) are up to. Some whales are so big that they influence the entire ecosystem with their very presence, as was the case with the US$9-million bearwhale a few weeks back. In most cases, whales are impossible to ignore, so primarily make sure, if you're currently in their way, that you can get out of it.
7. Break the rules
Sometimes you have to look beyond the wall to improve your position. However, bear in mind that you know nothing.
8. The Lord of Light is always right
A year ago, every bit of positive news would predictably cause the price of bitcoin to jump up, and every bit of negative news would cause the price to spiral downwards. As the Bitcoin market matures though, the correlation between the price and hype -- or FUD (fear, uncertainty, and doubt) -- becomes less and less pronounced, and the trading desk narrative begins to take on a life of its own. Consider the fact that we went through a series of amazing announcements over the past three months (Dell, Braintree, PayPal) and Bitcoin value is still stuck below $400 US. Bitcoin moves in mysterious ways, and it is not up to us mere mortals to direct or predict where it will go next.
9. Don't lose your head
Going all-in is never a good idea, and this holds true whether you're plowing your life savings into Bitcoin, or staging a coup in King's Landing. Given the plethora of factors that currently influence the direction of the market, and the relatively unstable state of affairs, only the most reckless traders (or the most naive lords) would put everything they had on a single big move.
10. Not today
Bitcoin's death has been lamented multiple times over the past five years, and if it has taught us anything, it's that the flagship cryptocurrency is remarkably resilient. Every major price jump will be followed by a huge downward spiral, and then finally settle on a small price gain that is a multiple of the original value. What we don't know is how high the peaks are (as high as ten times sometimes) or how long the troughs last (as long as one and a half years). If this is the kind of trading experience that sounds exciting to you (and it does, almost criminally so), then you're in for a wild ride.
With contributions from Oliver Frazer, Sabina Lopez Vergara, and Camill Vazquez