|
Everyone, who had ever traded cryptocurrency, managed to make some money at least once. But for to achieve significant results, traders need to test different strategies, to join crypto communities, to follow actual trends, etc. Some of the gains can be categorized as a “luck”, but an overall success is being achieved by a hard work, based on fundamental principles, right habits and experience.
Cryptocurrency market is known to be extremely volatile. The fluctuations of rates concern all the investors – including me and you. But good trading habits allow to soften losses and to maximize gains.
Note, that no one of the paragraphs below is an investment advice. Remember, that all the investments are the matter of your own risk!
1. Never invest more than you can’t afford to lose
During the crash down of January 2018 most of investors-amateurs went bust. Posts about total despair and suffered losses were followed by photos of broken displays and smashed laptops (I’m kidding, guys).
I’d like to note, that all these 9 rules are organized in a certain order, which is based on their importance. So, you can be sure, that the first rule is the most important one.
Once you turn your cash into cryptocurrency, you can consider it to be gone forever. The real money is the money in your pocket. There is no any guarantee, that you will manage to get your investments back. Not all the losses happen due to market crash downs. Force majeures – like hacker attacks, software errors or governmental regulations - can lead to the situations, in which you will never see your assets once again. Using of credit money is a way to bankruptcy.
If you are going to invest money which you cannot afford to lose – turn back around and reconsider your actual financial situation, because what you are going to do is a desperate step. By the term “money, cannot afford to lose” I mean money from credit cards, mortgages, selling of your belongings, etc.
2. Always pay attention to Bitcoin’s behavior
Most of altcoins (I mean any cryptocurrency besides bitcoin) depend on Bitcoin more, than, for example, Asian currencies depended on US dollar during the Asian financial crisis. If btc price drastically pumps, altcoin rates can decrease: a lot of traders are selling their alts to purchase bitcoins. And, conversely, is Bitcoin rate crashes, altcoin prices can go down as well: people are trying to sell their altcoins and get back to fiat money. The best time for altcoin growth is when Bitcoin demonstrates common moderate growth or small decline, or during the long flat.
3. Never put all eggs in one basket.
Diverse your portfolioYes, your chances to gain more increase along with amount of money you invest in on coin… As well as the risk to lose everything. The best way to hit the jackpot with minimum risk is to make profit with several different coins.
Let’s look at the crypto market in a global way. If we consider the market capitalization to be at the first stage of its existence, than, most probably, all the current markll increase with time. What are the chances that it would totally depend on only one coin? The best way to make money with growing market capitalization is to invest in different coins.
Let’s take one fun fact. During the period from January 2016 to January 2018 Verge increased by 13 000 times. For the same time the rate of BTC increased by “only” 34 times. Yes, you made exciting profit with Bitcoin – but just imagine, how much money you could make with diversifying your assets!
4. Don’t be greed!
There is no any trader in the whole world, who have never lost his money after making a significant profit. More rate the coin gains – more greed is growing inside us along wit h prices.
Yes, sure, when coin’s rate increases by 30% you can continue to make money with it. But remember to withdraw some part of funds right after it reaches the first target (30%, for example). Even if you expect it to grow up to 40-50-100%, you should take some profit for a case if the growth stops or the rate crashes down. When you are waiting for too long, you are risking to lose the profit you’ve already gained (or even to turn your plus into minus).
You should get used to withdraw your profit and to search the re-enter point, if you want to continue making potential profit.
5. Syndrome of a lost profit. Do not give in to FOMO syndrome
That’s the stage where people most often lose their money. Let's see how it was possible to increase the Bitcoin from $10,000 to $20,000 in December. This required the following:
· manipulation
· media hype
· news from the Chicago Mercantile Exchange
· news from the Chicago Board Options Exchange
· FOMO syndrome
Due to these components it got to the moon!
More than 3 month have already passed. During that period touched a level of $6,000 for 1 BTC; now it is trading at around $8,000 - $9,000. It's easy to say, looking back: "If I had waited just one month, I could have bought BTC for $6,000 instead of waiting for bitcoin to break through the $20,000 mark so that I could finally hit the jackpot". But in fact, here's a 100% working combination to always buy at the highest level:
1. be greedy
2. invest blindly
3. have a FOMO syndrome
Even in a crazy and unpredictable cryptocurrency world, there is a rule: "What is growing fast today, tomorrow will fall rapidly, it's just a matter of time."
Speculative pumps are almost always accompanied by meltdowns. I'm sure most of you will agree, that if you don’t try to jump into a rushing train at full speed (you probably remember James Bond movies), but just wait for it at the next stop, then you can probably stay alive and even keep your hands and feet.
6. Divide your investments into categories and always look at the long-term perspective!
If you begin to conduct your research, then in the process you will eventually understand that there are several categories of coins. You will notice, that some of them are headed by ingenious development teams with excellent vision, stunning advertising and practical experience for a successful future. If you find such a category – that is great! Put them in the vault for a medium or long term and let them brew like a good wine.
When the price falls, do not even think of giving way to panic and selling these tokens, because the assets in your medium or long-term portfolio must remain untouched for a certain amount of time.
7. Always learn from your mistakes.
Never accept total defeat. Always take a sober look at the situation and try to find out why all this happened to you. Take this experience as a valuable contribution to your next step, which definitely will be better, because you already know a lot more than you knew before. Even the most successful traders were once just amateurs. And it's natural that we all lose money during the whole trading experience.
In the first month of trading we all usually lose at least half of initial investment. I also lost it by selling at a loss because of the fear of being left with nothing. Nobody is perfect and there are no such people who would win every deal. Do not let the losses cut the ground from under your feet, because in reality every loss makes you even the better trader, if you, of course, decide to learn from your mistakes.
8. Always check the ticker symbol of the token being traded!
Ticker symbols are not universal and in rare cases may vary depending on the exchange. Nevertheless, such cases occur and may have a negative impact on your portfolio, especially in the year of hard forks that happens with many top coins every month.
For example, Bitcoin Cash trades on some exchanges as BCH, while on other exchanges it trades under the symbol BCC. BCC is also the BitConnect ticker symbol, which was recently released under the Ponzi scheme. If you bought a BCC thinking you were buying Bitcoin Cash, you definitely lost a lot of money. A vivid example of exchange with incomprehensible indices and coins is YoBit.
|
Show Posts
