Aside from tips that may help you to trade and invest in cryptocurrencies — including technical analysis, knowledge of each token and their technologies, among others — I believe it’s massively important to enter into this world with the right mindset.
The world of cryptocurrencies is so new, and in many ways, without precedence in history. This is why it is so necessary to instill the right ideas to make sure that you are making proper decisions at every single moment.
Here is a list of fundamental ideas to plug into our brains both before and during our activities with cryptocurrencies.
1) Don’t invest more than you’re willing to lose
This is just tried and true advice, and I didn’t make it up. But let’s just begin with this one as it’s so critical.
Of course, nobody puts their money down expecting to lose it. Yet in the face of high volatility, the uncertainty around whether certain tokens will survive technological adoption and even regulatory measures, there is absolutely no way to know whether our reserves will remain as valuable, if they will increase in value, or in the worst of all cases, we will end up in the negative.
The best way to avoid the emotional rollercoasters is to invest an amount that in the worst of cases and in the face of a massive loss will not affect our lives drastically.
I’ve heard of crazy stories in which people are plunking down their whole life savings, selling their homes, or taking out loans to place on cryptocurrencies. Not only is this an enormous risk, but at the same time there will be no peace to invest under the anxious burden of knowing that any loss — even temporary — will place your finances at risk… and even the lives of your loved ones.
2) Take a pause
Before clicking that button to make a trade or transfer funds from one wallet to another, think and triple-check what you’re doing to make sure that you are inserting the right information in the right places.
There have been countless errors reported by people who have lost a lot because, for example, they transferred funds of one type to the wrong wallet. This usually happens because they rush to get things done quickly, and unfortunately in most cases — if not all — this error is irreversible.
And whatever you do, never, never, never send funds or make trade decisions under the influence of alcohol.
3) Forget the past, act in the present
So many people I speak to say they are frustrated because they would have liked to have invested in BTC when it cost only $100.
Should’a. Would’a. Could’a.
You know what? That train has already left the station and won’t ever come back.
Even if you have a bit more experience to know this much, this regret from that past could still bite us. ¿What would’ve happened if we would have invested in this or that coin before that nice bull run upwards?
Staying stuck in these ideas doesn’t help us one bit. Moreover, the so-called FOMO — Fear Of Missing Out, in case you’ve never heard of the term — is precisely what makes us take sudden decisiones and place our money right when the price of a coin is at its peak and just about to drop.
If you couldn’t take advantage of an opportunity, release the thought, accept that this one passed you by and observe to see if you can catch up to the next one.
4) Play your own game
It really doesn’t matter how much other people’s portfolios have increased, whether they’re your friends, acquaintances, or YouTube celebs. The only thing that matters here is where you began, and where you’re at now.
If your friends have increased their portfolio by +1,000% but yours is only up by 13%, well guess what? You’re still winning!
Don’t feel that all of a sudden you need to make risky decisions to somehow “catch up” with your friends. Of course, you’ll want to take advantage of opportunities to increase your own growth percentage, but think about this number relative to what you have made up to now, not constantly comparing yourself with others.
5) Never decide to lose
Many times, you’ll by into a coin and its value will instantly diminish. This is normal! At that moment, you need to be armed with patience and wait until it rises again.
Whatever you do, don’t get desperate and sell, just to jump on another coin that you believe is about to rise. This would be a terrible mistake. You will end up reducing the over all value of your portfolio without the assurance that you’ll recover it.
Look for a tool — an online alert or a mobile app with alert functions — and set up an alert at the price in which you bought in. Then forget about it completely. Don’t check in on it on a daily basis, you probably have much more valuable things to invest your attention into!
When your alert fires off, you can go back to your favorite exchange and decide whether you want to sell right then at a break even, or in the most ideal scenario wait a bit until it rises and you can sell it profitably.
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I hope these ideas will help you make good decisions, and support you to have peace with your decisions.
If you have any question or I can help you in any way, just let me know. 😀