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Today I woke up £0.64 richer.

Back in June, inspired by the huge variations in the price of cryptocurrencies when Elon Musk opened his mouth, I decided I would dip my toe into the water of cryptocurrency "investment" (speculation) to see whether I could make a profit.

The good news is I am now in profit to the tune of over £30.

How did I do it? Very simply. I have a online bank account accessible via a mobile phone app. It lets you convert from Sterling to Euros, to trade in stocks, some commodities apparently (precious metals) and cryptocurrencies.

I'm quite cautious with money, so I decided to limit my speculation to no more than £10 at a time. I spent an afternoon looking through all the cryptocurrencies available through my app to see how they behaved hourly, daily, weekly and monthly. I saw the big peaks and troughs in all of them when Musk spoke.

The various cryptos all behave a bit differently, but some follow certain patterns, and you can kind of get a feel for their behaviour over time. The most useful ones to me are those with general up or down trends over a period of days, but with hourly variations around +/- 5% or so. You can get a feel for the period of the variations and set limit orders to buy on the troughs and sell on the peaks.

There's a fee for trading, and sometimes the rate you convert at is a bit different from the market (by some small percentage). By inspection, I seem to be paying fees for buying of about £0.26 or £0.27 (some as much as £0.4x) which, of course, means an instant loss of a few percent. However, if timed correctly on or near the trough, it soon goes positive again. There's a similar fee when selling.

As usual, the middle man is making a lot of profit out of this, but so far, so am I so I'm not unhappy.

I found that after I while I started over-thinking things and getting a bit greedy, so wasn't making a profit as quickly. I was over-thinking in my calculations for the peaks and troughs. The best way to do it is to be conservative and to aim to buy near a trough, but not too near. Trying to be too clever with the calculation resulted in missing it by some tenths of a percent. Similarly with selling, it's best not to be too greedy and optimistic about where you think the peak will be.

On the other hand, some of the cryptos are quite "spiky." They amble along varying by a small amount and then all of a sudden (over a few minutes) spike up by tens of percent, sometimes even by over 100%. I recently made 15% this way. I could have made >60% if I had been less conservative. Then they gradually sink back down with a few small upward bumps along the way. Some spike downwards, and then gradually climb back up. Unfortunately, that can take weeks or months!

I have a friend who wrote his own commodities and stock trading software (C++ on Windows) which he runs from time to time when he needs a few extra £ for some toys. I was thinking about doing something similar (but on Linux and in a sensible language, perhaps a LISP) for crypto. I would need to get an API from somewhere and an account on a trading platform.

I have a savings account in the bank. The interest rate is 0.4% PA. The rate of inflation is much higher. I'm getting poorer.

Update: Since I posted this journal entry I have made another £1.64 profit (on £10 gambled a few weeks ago), bringing today's winnings to £2.28.