As a New Crypto Investor Try Not to…

Invest first, research later. The rush to get money to market may feel exciting, but like most other things in life, taking your time leads to better results. Of course, we can’t control the outcome of a trade but we can control how we go about taking that trade in the first place.

Buy first – plan the trade second. What is your goal with this trade? Where are you looking to enter? At what point will you take profit? Will you cash out the whole position or just a portion? If the trade goes against you when will you sell? Will you close the entire position or scale out? Is this a short, medium or long-term trade and exactly what do you mean by short, medium and long? Planning your trade will definitely reduce the level of stress it brings to you whether on its way up, down, and everything in between.

FOMO (fear of missing out) into a trade. Buy red – Sell green. That 30% move you’ve already missed, let it go. In all likelihood the price will revert to mean over the coming days and weeks, giving you plenty of time to decide whether you really do want to invest your capital in that particular project.

Go all in on one trade…start small, find your way in the market. Make the mistakes we all inevitably make without squandering the majority of your capital on one throw of the crypto-dice. This market is only just forming, you have plenty of time to get involved.

Over-invest in crypto, if you value your sleep, health, and general sanity only invest what you can truly afford to lose. This is a new asset class and who knows what lies ahead? Many, indeed the vast majority of crypto projects are likely to fail, so do yourself a favor and take this risk reality on board. Losing a 100% of your kid’s college fund is not something you want to worry about or experience.

Frequently jump positions. Buy Cardano, sell 5% down, buy Neo, sell 7% down, buy whatever lose some more….If you’ve researched your investment and the fundamentals appear sound, why sell on a dip even a substantial one? Chasing profits and crypto jumping is most likely to simply diminish your core capital.

Buy because some YouTuber promises x100 on investment. Sounds too good to be true, then it almost certainly is. Shills abound, they are promoting for their own gain and care not-at-all for you or your money. There are reliable sources of information on YouTube etc. but it takes time to sift through the many promoters and marketeers.

Buy or sell on reflex based on one news report or story. Research the source, find other stories that support or refute its thesis. Reflect, then make your decision. FUD (fear uncertainty and doubt) and irrational exuberance and hype can be equally damaging to your investment. Crypto is dead, crypto to the moon are two sides of the money-losing coin. Be skeptical, take your time and strive to make considered, calm, decisions in an ever volatile market.

Be the counter-trend guy just because you think the market will turn. Obviously, picking the exact bottom or top of a market can lead to great returns, but it’s almost impossible to do. At a base level, the trend really is your friend. Provided you have a set stop loss or guidance as to when to get out of a losing trade, a sudden market turn shouldn’t hurt too much and once established you can always ride the newly established trend in the other

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Responses

  1. MonkeyCrushR

    Love it! Just about everything I did when I first jumped into crypto, LOL. You learn fast or lose half your investment – and that’s if you are lucky. Hopefully this article helps some new investors to skip some painful lessons. Keep up the great work, CD!

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