I am new to this game. I got into it during late last November. I was bored beyond comprehension and got tired of watching Netflix all weekend, and I kept on seeing the rise of Bitcoin on my news feed. I thought, 'Heck! I might as well get into this'. Ironically, that is the definition of FOMO, fear of missing out, as I quickly learnt. My journey has been hectic, to say the least.
The point of this article is to share the lessons I have learnt as a noob trader.
Never go "all-out" on your savings : Thankfully, I didn't but I did invest more than I should have. Moreover, I made some bad trade calls due to either greed or fear. But the point is, it's ok to make bad calls. The lesson is, give yourself room to cushion the blows from such calls. In crypto, never put in more than you are willing to lose. If your mortgage depends on it, don't put it in crypto. Yes, you might lose out on potential gains, but you avoid worse consequences when you lose the money.
Diversify your portfolio: This is an important one. Every good investor, be it a crypto or a stock investor, has a diversified portfolio. Don't put all your money in altcoins because of the dream of higher gains. During a big dip, the alts suffer worse than the mainstream ones. Balance out your portfolio: have a huge chunk in the mainstream ones i.e. BTC and ETH, and have a smaller chunk in alts. People might disagree but I think this lets you ride out the storms better. Moreover, if you have more BTC/ETH, you can use those to buy alts at the dips. Double win!
Have some FIAT ready to roll out: You know what does not decrease in value in a crypto crash? FIAT! Oh how I wish I had some FIAT in my GDAX or Bittrex account! Instead of waiting for money to transfer, which will take 2+ days atleast, I could have bought more coins right away at the right time. Instead of waiting for my BTC/ETH to show up in my account in 5 business days, I would have gotten them right away and use them to buy other coins. Yes you can use your credit/debit card and get cash instantly, but you have to pay hefty fees (atleast in Coinbase/GDAX). I vow to have some FIAT with me, so that I can take full advantage of the next "crash".
Take partial profits: This is hard to do. When you see your beloved token go up in value in multitudes, you just want it to keep going up and up. But the thing is, you probably won't be able to time the peak everytime. Never shy away from taking profits. Yes, you might get $100 more if you sell tomorrow, but you can also make $200 less. Or even worse, make no profit at all. Ripple taught me a hard lesson on this. When you feel good about the value of a coin, sell a bit of it and keep the money handy for the next dip or invest it in other coins and diversify your portfolio.
Average out your trades: Let's say you have 100 coins of XCoin and they have a nice linear growth. Because you read my article and loved it (duh!), you want to make some partial profit. And let's say you want to sell 50 of them. Do you sell all 50 at once? No. Sell 20 at the current price, and have limit-sells at current_price + 10% and so on. This way, you have more chance of selling some at the peak and getting a better overall value. Same logic goes when buying too.
HODL: Don't let fear dictate your actions. Invest in projects you like and believe in. Always research the company before investing in them .If they have good product and they add value, they will rise from the ashes. By the way, is there a PhoenixCoin? I call dibs.
I am going to live by these lessons during my future trading. I hope you find these helpful. If you think these are absolute rubbish, I would love to discuss them with you! I don't claim to know the best strategies. There are way too many crypto gurus running around and claiming to know the best strategies or coins (Tai Lopez anyone?). I just wanted to share my honest opinions.
