BTC? ALTS? Daytrade? Long holds? My 5 New trading strategies

Aside from writing really cool short stories :) I spend the other portion of my free time trading and studying cryptocurrencies.

For many months, I fought with myself on how to invest in bitcoin and alt-coins. My entry in cryptocurrency was purchasing a small amount of bitcoin on Coinbase, and trying to sell high and buy low on the company's GDAX trading system, which didn't go too well. GDAX has some good features, but I found it too clunky for daytrading.

I was intrigued by Poloniex, and started an account with my Coinbase bitcoin. Around this time I was also investing in Ethereum and the DAO just hit. It was an exciting time for investing. Things went sour fast when the DAO got hacked and drained a third of the ether from the DAO's account. My initial investment in cryptocurrency doubled in the first month, and then dropped 75% in the second, leaving me with half of what I invested.

But instead of giving up on cryptocurrency, I decided to diversify. Going all-in on a coin would never happen again --- I guess you could say I got Post-Crypto Hacking Disorder.

I decided to buy a few recognizable cryptos and hold them. But the ones that were gaining in value by Sept 2016 were obscure alts. Hmmm. It was like playing whack-a-mole trying to figure out which one would pump next. I made two good buys with FLO and NAV, but then all the alts started to drop by late fall, and my account just kept getting smaller.

So to hedge my investment, I decided to keep 50% in BTC and 50% in alts, which eventually led to 33% in BTC, 33% in ALTS and 33% in USDT to "Tether" some value so that it wouldn't keep dropping. But on the flip side, my investment wouldn't gain in value either. I was in a slump.

By this time I had gained back 30% of my loss, so not all was bad (and this is actually still better than investing in stocks or mutual funds). But I still was not anywhere close to the amount that I felt my investment should be given the time invested.

Things didn't begin changing for me until my trading changed with these 5 new strategies.

1) I stopped daytrading 100% of my portfolio

My first change was to stop daytrading 100% of my portfolio and commit to only 30%. One reason why I would lose money was because of the dips... I would let emotion get a hold of me and sell during dips. There is an old adage: "Buy red, sell green." This is very true, as selling red means that you are buying green. When you sell in the red, you are buying out of emotion and fear. When you sell in the green, it is best to accomplish this by setting automatic sell orders. Many coins can move up 50% or 100% in one day. Setting your automatic sells at 40% or higher will capture great profits.

2) Holding long on the best coins

Daytrading a smaller portion of my portfolio also means that I am holding the best coins, which often go through spurts of intense gains. These are the LTC's, DASH's, and ETH's of the cryptocurrency world. If you are not holding these coins when they initially go off, forget it. You will never come out ahead, only lose when they drop 50% of the 1000% gain. I realized that I could save up on the best coins when they dipped or dumped by purchasing a small amount here and there and keeping them in my Poloniex piggy bank!

3) My top goal became the # of coins I owned

The key switch in my mindset is this: instead of looking at the percentage of increase of a coin and purchasing based on that, I look at how many coins I own. It's really that simple.

I create a list of 30 coins I want to own and set goals of how many I want of each. Most are based on the top 20 on Coinmarketcap.com (with a few of my other favorites added to "THE LIST," like BELA). Then, when the coins go deep in red (15-20% or more) I buy up as much as I can. The good coins always bounce back. They bounce back during dips. They bounce back during dumps. They bounce back when BTC rallies for months. And they even bounce back when a major hack occurs, such as ETH. The only time they don't bounce back is if it is NOT a good coin (i.e. pump and dumper, zombie coin, etc). The DAO, although a great idea, was dead on arrival. So it was a zombie coin that would not have made THE LIST.

And when they bounce back, they rally higher.

So I created "THE LIST" of a few coins and my goals for coin ownership over the next 2 years. I may not reach all of them, but its a good start:
ETC - 1000
ETH - 100
XMR - 100
MAID - 10,000
BTS - 50,000
DOGE - 1,000,000

(I have to get DOGE. Shouldn't we all?)

There are more coins on THE LIST, and I hope to purchase them all. My new strategy is wonderful, as I daytrade the pump and dumpers, and whatever small winnings I make on them get invested in THE LIST. My investments in these other coins are small and if they get delisted or go down in value there is not much of a loss. But when they pump, my stops will sell them and I will make a tidy profit.

4) I began to LEND instead of MARGIN

Let the pros short and borrow to form long positions. As a beginner, I succeeded here and there, but the really bad shorts killed my portfolio in the end. Also, are you really borrowing at 2% per day on that Litecoin short? My best lend so far was a 2.9% daily rate on 16 CLAMS for 30 days. It was a bit of a surprise, and opened my eyes to the possibilities that I could actually make more lending, especially since I was holding the same coins that Poloniex lends.

And don't get me started on the wonders of a lending bot! :) I now have much more time to do other things in life, like write!

5) I have another big strategy: hold STEEM in a STEEMIT wallet.

This has really been a wise investment!

Thanks for reading about my ventures in cryptocurrency. Although I am not an investment counselor and this article is just an autobiographical account, after the FUD lately due to DDOS and the uncertainty of ALT coin prices in general this last week, I thought I would put my own story out on investing. Please take a look at my fiction as well! Comments are appreciated and I will write more about my thoughts on cryptos if you are interested!

The Girl and the Pendulum
Hunting the Wolf
Escape from the Noh

Facebook page: (https://facebook.com/michaeladamparis/)
My Blog: (http://www.michaeladamparis.com)
Thank you all for your support and encouragement.

All images used with their respective creative commons licensing.
Image Credits: geralt | skitterphoto | PublicDomainPictures | mauricemikkers (Steemit Coin based on original concepting and sketches from @mauricemikkers)

Follow me @michaeladamparis