Here are two simple rules my trading mentor who's been in the game for 30 years taught me.
1. Put 5-10% of your net worth in crypto. No more as you might lose more than you can afford, no less as you won't see much difference.
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2. Have a strategy. Every month, on a particular day you have chosen, take 50% of your profits in fiat. No ifs, no buts, no waiting for the market to get better or for the price to rise because you "know it will rise 100%". And when it comes to the other half, invest 50% of it in assets you believe in for the long-term (Bitcoin, ETH, Neo, etc.) and leave the other 50% for speculation (alts, shorting).I myself have broken these rules on a few occasions as I got greedy and it didn't end well so I had to HODL, check my portfolio every 5 minutes, deal with a massive amount of stress...
If you leave the decision-making to the strategy you follow, not to your emotions, it will make the whole thing much less painful. These two rules are super simple to follow.
"But I made most my crypto money from crypto." "But I am sure there will be a bull run, I will make more money when I put all my savings." "Why only 10%?"You can NEVER be sure if a price will go up or down. Even technical analysis can mislead you as the crypto market is not regulated, it's the wild wild west and anything can happen. ANYTHING. Good or bad.
We still live in a fiat-dominated world where you pay your bills in fiat (USD, EUR, YEN, etc.). So when your bills come but you've put all your money in crypto and it's going down and you kinda have to HODL, how are you going to pay them? I did that just recently and it was pretty tough to fight with my fear of losing and regret that I didn't sell at the peak.
If you don't need the money, great. Leave it in crypto. But the moment you lose a big amount (and this will happen at some point if you are in the game long enough) you will start panic selling and thinking about all the things you could have bought with that money: a trip, your yearly rent, a yacht, 5 years of freedom from work, etc.
A better way is to slowly regain your initial investment and let the profits make profits. Or take as much money as you need to live comfortably if crypto is your main source of income.
This is where the second advice comes in handy.
Take profit, even when it's counter-intuitive.
"This advice comes from many times of sh*#$ing my pants over the years," – experienced traders lose money too but they only come out stronger.
And finally, don't trade under the influence of your emotions:
FOMO – when it's going up and you've missed the train... but then you buy and it dumps. Happens many times to all of us
If you've missed the train, don't run after it. Wait for the next one (next dip).
FEAR OF LOSING – you're panic selling and then it pumps back up.
Warren Buffet might be a crypto FUD-meister but he's right about getting greedy when others are fearful and getting fearful when others are greedy.
GREED – this is the trickiest of all emotions. Most humans are greedy. It's our nature. And yet most will tell you they're not greedy if you ask them. I am greedy, and so are you. In trading or investing, we realize we've been greedy only after losing money. There is no easy way to learn this lesson but if you follow the two rules above you won't let greed run the show.
I hope this is helpful.
Stay tough! ;-)
I think you should not hold on to this point, you can see that the market is showing signs of recovery but in the long term, bitcoin prices are still in the long-term downtrend so bitcoin prices can continue to decline sharply at any time. So I think that this time you should only short-term investment in bitcoin and not long-term hold the risk will be very high.
