Today I want to try and formulate a quick guide that could potentially help you avoid losses. These are some of the questions I’ve come to ask myself before investing into any one cryptocurrency.
1: Are you FOMO’ing? (Fear of missing out)
How many noobs do you have think been rekt by FOMO? Tens of thousands, hundreds of thousands… millions? FOMO, A.K.A greed, will surely lead to your demise. ALWAYS ask yourself if you’re feeling that FOMO in your bones, if so, you might want to pass on that buy. Sure, you might be able to hitch a ride a bit higher, but on the retrace, you’ll like be in the red.
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2: Are You Buying Low and Selling High?
No… not the meme buy high sell low, get that pleb idea out of your head. You need to get into the habit of finding undervalued coins that are pushing sideways, or slowly, and I mean slowly making higher highs. I talk about the importance of higher highs in my Masters Guide to Crypto Trading article.
3: Are You DCA’ing?
Dollar cost averaging has to be one of the most elegant investing strategies to ever exist. So simple, so clean, so smart. Essentially, taking the same dollar value say once per month and investing into X coin. Doing so reduces volatility and provides an easy investment plan. More people should DCA.
The crazy part about the crypto is if you compare the returns to the traditional financial system, it would takes months, or perhaps years to see the same returns the crypto world experiences in a week. What’s that old saying? The hardest thing to do in investing is nothing.
How To Win – Follow The Whales Game
If you watch whale wallets they have a simple, yet interesting strategy. They don’t go out FOMO’ing 100% of their money into one coin, rather, they find coins that are pushing sideways, or highly undervalued (<15mcap). Then they either put a small portion (2-10%) of their portfolio into it, or they DCA and build a position over time. Then they play the patience game. Coin 10x’s, they exit, rinse – repeat!
The problem is human emotion. Can you mimic the whales? Or will you FOMO into a 10x that is already 3/4 the way up. Can you remain patient on the sidelines? Emotions are a bitch. Control them, and you win. Can’t? Sell at a loss – NGMI.