This is not financial advice. Do your own research and trade within your Iimit.
There has been so much buzz around Bitcoin and Cryptocurrency the past few months. When theres hype, there’s often a ton of misinformation. This post is to share my history and and help you dispel some of the nonsense. This is not a comprehensive guide, just something to address some of the recent ambiguous information I’ve seen on the market.
My background in cryptocurrency
My interested began in 2013 and between 2015-2017, I was a super active crypto trader. The contrarian in me loved it; I liked that it was a small community and everyone in the real world thought Bitcoin was a complete Ponzi scheme. Whether it was or not, I didn’t care. I liked the technological character behind Bitcoin. I was involved in so many areas from mining Ethereum with lessons from Michael Wuehler, I had my team build into the lightning network, I got burned on defunct projects. I was obsessed. I exited shortly after bitcoin first touched 5 figures and after that, every crypto was declining for like 4-5 months, and like anything I got bored and moved onto unrelated projects. I held my remaining crypto in a cold ledger and didn’t look back until Jan 2021 rediscovering what was junk crypto now a small treasure trove. Here’s what can I share from my lessons in the past:
Winning doesn’t make them experts
In a Bull market, almost everyone makes large, so they become self-proclaimed gurus or experts. Don’t believe most of the noise that comes out of them. Their aim is to make content to gain followers, investors, and build a name in the market. Some will go as far as making a ton of posts with every speculation, a few weeks later they’ll remove all the wrong posts and make an updated post referring back to the only correct post that wasn’t removed. Some will go as far as skewing the math on earnings in their screenshots by injecting more fiat (cash) to promote the crypto. What you can learn from the winners are the tools they use that help with speculation such as cross exchange trade for unlisted cryptos on the local trading desks. Use those tips to draw your own.
Trade within your means
I learned the hard way back in 2017 that trading crypto is more dangerous than trading in the stock market because I could trade 24/7 on P2P exchanges like Kraken and LocalBitcoin. I was staying up day and night when I was managing over 35-40 different crypto’s, making careless mistakes and missing orders.
I suggest setting a limit of how many crypto’s you can manage. While working full-time, my personal threshold currently is a maximum of 20 crypto’s with half being traded regularly. Get sleep so you can make smarter buys.
Splitting your portfolio
I haven’t heard any experts speak on this but most of your portfolio is holding and watching the pattern and fib retractment. You hold in confidence that the crypto project will gain interest and make some type of newsworthy breakthrough. My portfolio rule is 50% are long term lIke BTC, ETH, ETC. and 35% are short term. Note: I don’t park my crypto; I actively trade them. The last 15% are for Hail Mary’s for that wishful 100x gain. I don’t hold onto any of these crypto’s. I buy then sell, and move onto the next pump. Most of the time, I hold these cryptos for less than a day after doubling. Remember if that 15% is gone, it’s probably a sign you should quit and focus on the rest of your portfolio.
Every loss has its lesson
Not all your trades will be gains or breakeven. Don’t get attached. Promising crypto projects and your hunches will be wrong at some point. I personally do not average down on a bearish crypto. I cut my losses and trade into something else and learn why that crypto or my trading method failed. Losing also builds tolerance to make objective calls in the future. The next time your hunch kicks in on a solid crypto, your emotions will steer clear and you’ll trade without hesitation.
Know what you’re getting into
Look for the signs of a long term project and a pump and dump. I’m not saying don’t get into the latter but it’s important to know how they work and when to get into them. Most pump and dumps have the following qualities:
– White paper usually plagiarized another project, so run it through a plagiarism checker;
– If charts have vertical lines at the early age;
– They don’t show verified bios of the creators or founders
I find pump and dumps can be fun but if you don’t get into what is called the pre-sale, you’re at odds to lose. Personally I have gotten them right 1 out of every 9 times. I have gotten in and exited in within a few hours after listing and doubled, which would rarely happen on a crypto project with merit. In 2018, EMC2 was getting some hype and my hunch told me that some traders will make the mistake and buy into EMC, so I bought into EMC and gained three fold in a day. Crypto is wild like that.
Here’s the mantra I want to leave you with
Understand fast money is measured in months and years; not days. Focus on the crypto’s fundamentals, technology, management, and influence. Develop the hunch that will lead you. Trade what you know and within your means. I hope this helps some of you. Feel free to shoot me a message with questions. I may or maybe not respond. Happy trading!