I've been trading crypto for a year and I'm by no means an authority on the subject, but I've learned a lot of lessons along the way, some the easy way, some the hard way. As the explosion of interest in Bitcoin continues, I'd like to pass these ideas on to anyone getting started in this minefield called crypto trading...
Buy low, sell high. And boost your chances with knowledge.
It's a very simple principle, but it works, and you should never forget that profit is your goal. It doesn't matter whether you make that profit with an initial investment of $100 or $10000.. It doesn't matter if you do it with Bitcoin or a shitcoin. If you're buying low and selling high, you're doing it right.
Think of the crypto markets like a fruit market. Some days bananas are really cheap. Some days you can sell them for huge profits. If you educate yourself on the coins you're trading, you can tell the difference between bananas, apples, and shitty diseased potatoes. This will help you be more efficient, and avoid buying crappy coins, even when they seem cheap.
It's not over 'till it's over.
Dramatic comebacks aren't that unusual in crypto. Bitcoin did it. YOYOW did it. STEEM did it. A friend of mine bought a load of STEEM, this time last year, when it was 15 cent. Seems obvious now doesn't it? But back then, very few people believed it had potential to bounce back so dramatically. I wish I had have done the same. Lots of coins die off into obscurity, but if you can spot a good coin that's simply having a bad patch, it might be worth picking up a bit.
HODL
Hindsight is rampant in the crypto world, but the most common regret must be trading crypto for fiat. I sold Bitcoin a couple of years ago to buy about 1000 euro worth of camera equipment that I didn't even need. That Bitcoin would have been worth about $30K. Yep, I learned the hard way. Crypto isn't mainstream yet. HODL!
No FOMO
FOMO = "Fear Of Missing Out". Essentially it means buying a coin at an all time high price, because you irrationally fear missing out on the opportunity. This approach will lose you a lot of money very fast. There are new opportunities in crypto every day. Chill.
Be clinical. Not romantic.
Steemit user @mughat is a tower of intellect and rationality. He thought me to separate emotions from trading decisions and this approach has proven valuable. Don't get emotionally attached to any coin. Don't be too proud to sell at a loss if the prognosis is bad. Don't feel guilty for making a profit. Don't hate yourself if you make a mistake. Learn from mistakes, dust yourself off, and come back wiser, better, calmer, more objective.
Crypto usually moves fast, but not too fast for a quick Google search.
Not everyone is checking their portfolio every hour. Crypto prices react fast to news, but the whole "movement" may take a few days. Before selling that coin that has jumped 20%, (or buying that coin that's down 20%) take some time to do some research. You might be best to hang on longer, or pass completely. Recent price action on IOTA is a good example of this. Some bad news came in and the price immediately dropped, but it continued to drop steadily for days.
Diversify
Holding a number of coins reduces your risk, while not ruling out huge rewards. Don't put all your eggs in one basket.
Create a news stream.
Twitter, Steemit, Investfeed, Facebook, Youtube. These places are all great sources of information. You can subscribe to feeds and news reports that will keep you informed and ahead of the crowd.
I hope you found some of these useful. If you have anything to refute or contribute, please comment below.
DISCLAIMER: This article is opinion, and doesn't constitute financial advice.