Like many others, the crypto hype in 2021 sparked my curiosity. I wondered if it was actually possible for amateurs to make money day trading with tiny amounts of capital.
To find out, I decided to conduct an experiment – attempting to turn Ksh1,000 into profits by day trading cryptocurrencies.
While earning life-changing wealth starting with Ksh1,000 was unrealistic, I hoped to learn the fundamentals and evaluate if crypto day trading could be viable as a side income stream.
Over the course of a month, I documented the results.
Here is the inside look at my beginner crypto day trading experiment in Kenya and the key lessons learned.
Table of Contents
Learning the Basics First
While eager to dive in, I knew learning the basics was essential before risking any capital. I spent several weeks educating myself as much as possible.
I took a cryptocurrency trading course online, read guides, and watched hours of YouTube tutorials to understand technical analysis and trading strategies.
I also researched the top exchanges, opened accounts on both Binance and Coinbase, and familiarized myself with their platforms using demo accounts.
Additionally, I tuned into live streams of professional traders every morning to observe their processes in real-time.
This self-education gave me just enough confidence to give live trading a try without handing over my money blindly.
Starting Small with Ksh1,000
Many experts advise beginner traders to keep risk exceptionally low when getting started.
I decided Ksh1,000 was a reasonable amount I could afford to lose as a newbie while giving me skin in the game.
I transferred exactly Ksh1,000 from my bank to my Coinbase trading account.
Given my limited starting capital, I couldn’t afford trading fees from jumps between multiple coins.
So I decided to keep it simple and focus solely on trading Bitcoin (BTC) to start. This would allow me to tinker and learn without getting overwhelmed.
My goal was to see if I could grow the Ksh1,000 into at least Ksh1,500 through savvy trades. Any profits would help build confidence and cover some fees.
Learning the Hard Way – My First Few Losing Trades
Eager to put my learnings into action, I made some rookie mistakes right out the gate. I took a few emotional trades based on FOMO (fear of missing out) without adhering to my trading strategy.
For example, I bought Bitcoin while it was spiking at $47k after seeing lots of hype on Twitter. Minutes later it dropped back down to $45k and I panicked sold for a quick loss.
Letting emotions like excitement or fear control your trades is a recipe for losing money quickly.
I also learned the importance of setting a stop loss to limit potential downside.
After a few silly emotional trades, I took a break to refocus. No profits yet and my portfolio was at Ksh900.
Shifting to a Disciplined, Data-Driven Approach
I realized that consistent success would only come from sticking to a methodical trading approach free of impulse.
Going forward, I committed to applying what I learned instead of trading impulsively:
- Technical analysis – Using indicators like moving averages to identify momentum and trends.
- Risk/reward ratios – Only taking trades where the potential profit exceeds potential loss by a minimum 2:1 ratio.
- Entry points – Waiting patiently for prime “buy zone” entry points instead of FOMO buying.
- Stop losses – Setting stop losses on every trade to limit downside.
- Position sizing – Risking no more than 1-3% of total capital per trade.
This structured strategy required patience and practice, but soon started yielding promising results.
Turning Things Around and Hitting My Goal
Sticking to my trading plan day after day, I began seeing progress.
My first big winning trade came when I bought Bitcoin at $38,500 after analyzing that the daily charts signaled an upswing.
I set a take profit order at $40,000 and stop loss at $37,800 to control my risk exposure.
48 hours later the trade closed at $40,300, netting me a tidy 4% return, or approximately Ksh600 in profits.
This gave me the confidence I could trade profitably over time using savvy analysis.
I let trades like this compound for 3 full weeks, taking small positions in ideal market conditions. There were still a few losses along the way, but by sticking to strict risk management, these were minimized.
After 20 days of trading, I grew the original Ksh1,000 to Ksh1,530 – achieving my initial goal!
Key Takeaways So Far
- Technical analysis helps identify high probability trades
- Letting FOMO or emotions control trades leads to losses
- Risk management is critical even with small positions
- Patience pays off when waiting for ideal entry points
Continuing On and Hitting 10% Returns
Buoyed by hitting my initial target, I decided to keep the experiment going and see how much more capital I could accumulate through disciplined crypto day trading with my small account.
I continued applying lessons learned, focusing on higher probability setups and cutting losses quickly when trades went south.
There were many ups and downs, but sticking to the risk management rules prevented any major drawdowns or wipeouts.
One full month after starting with Ksh1,000, I had grown the account to Ksh1,100 – a 10% return! This was extremely positive for a beginner trading with such a small amount.
I felt ready to start scaling up the capital and expanding my technical analysis education. My goal was to keep doubling the account over time with measured risk-taking.
Key Lessons Learned
While I only traded for one month and kept amounts small, this experiment taught me valuable beginner lessons:
- Master fundamental education first – Understand technical and risk concepts before trading. Study successful traders extensively.
- Start small – Trading tiny amounts helps learn without large losses.
- Stick to the plan – Let data, not emotion, drive trades. Follow rules of calculated risk management.
- Losses happen – Even the best traders take losses. Keep them small through stop losses.
- Patience pays off – Waiting for high probability setups based on indicators leads to better trades.
- Analyze mistakes – Review losing trades to improve. Study winning trades to repeat what worked.
Is Crypto Day Trading a Viable Side Hustle in Kenya?
Based on my beginner experience, I believe crypto day trading can be a viable hustle or income stream if done responsibly after putting in extensive education and skill development.
Of course, there are never any guarantees of profits. Cryptocurrency markets remain exceptionally volatile.
Major risks like hacks, regulations, and price crashes have to be accounted for. Most day traders end up losing money in the long run.
But for disciplined learners who manage risk wisely and develop expertise in market technical analysis, the potential is there, even starting with tiny amounts.
My small wins taught me that applying robust trading strategies can yield consistent returns over time, if expectations remain realistic.
I’m excited to continue growing my capital and skills incrementally to evaluate if crypto day trading can evolve into a sustainable side business. But only time and practice will tell.
The most important lesson for now is detecting and avoiding common beginner mistakes that drain capital quickly. By surviving these early challenges, aspiring day traders position themselves for better odds at long-term profitability.
The journey is just getting started!