This is an accumulation of good advise that I have come across

I started out in blockchain technology due to it's decentralized nature and the revolutionary future this might bring. But let's be honest. We all want to get rich when we invest. That's just human nature.

But how to go about it? Which coin to invest in? When to do it? How much should you invest at once? What about the good old FOMO?

The following tips are bits and pieces that I have written myself or found during the time that I have been investing in cryptocurrencies. Some are obvious (only invest what you can afford to lose!!!), some were eye openers to me.

Without further ado

The first rule in investing or trading in a given cryptocoin is deciding if it has a value proposition:

1. Can it draw fiat currency (USD, Euro, Yuan etc) in such a way as to give it a valuation that is fully independent of pure speculation?
2. Is it unique?
3. Is it rare? A limited supply with a low or negative inflation rate will lead to increasing price as demand goes up.
4. Are there significant risks associated with the value proposition?
5. Seek Platforms Not Features

• Marketcap is derived from the price, not the other way around. Until a cryptocurrency generates significant revenue independent of it's speculative valuation this will remain the case.
• Price is determined by the day traders, not by the holders.
• The spot price of any given cryptocurrency is determined by the patience of the seller and the impatience of the buyer.
• Price of most cryptocurrencies is derived from bitcoin unless they have a direct fiat gateway. Unless a significant amount of trading volume occurs via the fiat gateway, the price of that cryptocurrency is still heavily dependent on the price of bitcoin.
• Bitcoin is (for now) is the gold standard of cryptocurrencies. Because it has the largest marketcap (by a very massive margin).
• Market manipulation means that large holders in more valuable currencies (large marketcaps) can tamper with and set the value of much smaller currencies (i.e. smaller marketcaps).
• Bitcoin's price itself can be manipulated by investment banks, governments or firms who trade in multi billions of USD daily. This is because the daily trading volume is almost 5 trillion trillion USD (which is several thousand times larger)
• There is nothing wrong with investing or trading in cryptocurrencies with low daily trading volumes and marketcaps, just be conscious not to put more money into them than their long term buy support can handle.
• The concept of liquidity in a market is important relative to the amount of fiat you are planning to invest or trade in it.
• Whether day trading or investing, pick cryptocurrencies with good fundamentals i.e. excellent development teams, good marketing and strong value propositions that will provide the cryptocurrency in question use and value independent of speculative valuations. You are less likely to get manipulated or scammed in the long run that way especially if you are a holder.
• Be very weary of trading or investing small amounts of money in larger markets that allow leveraged trading. Those markets will behave irrationally and not follow the fundamentals in the short term.
• It is up to you to study the depth charts, order books, candle bar charts, daily trading volumes and news cycle to discern the patterns. The price is a composite of this and the psychology of people who don't understand this. You will learn more about day trading this way and more importantly learn to trade/invest independent of the price.

Cryptoasset Value

• Principle 1. The value of a cryptoasset is determined by an expectation of what participants can do with it.
  If you can exchange a bitcoin for something valuable (fiat money) the the bitcoin has the same value as its dollar price. If you can exchange Filecoin for a decentralized storage service, its value is the value of that storage service.
• Principle 2. If you issue or pre-mine your own cryptoasset, you have just created something that has zero value.
  Principle 2 is an operating principle until Principle 1 (expectation) kicks in successfully.
• Principle 3. Value is relative. The only meaning of the price of a cryptoasset is to compare its value with that of the asset in which it is being priced. Absolute value does not exist.
  Principle 3 comes into play when you think about such things as stablecoins. This is where it is easiest to lose track an implicitly decide that value is absolute. Unfortunately, the answer is that there is no such thing. You can only control the value of a coin (Principle 1) if you can control how much people want it. You can only have a stable value if you express that value in another coin (Principle 3) and (again, Principle 1) offer that other coin or its equivalent in exchange for your stablecoin. Otherwise you have something that has zero value (Principle 2).

Concerning Fomo:

• When you are in the right place at the right time, commit fully.
• As soon as other people say FOMO, it's already too late.
• As soon as you feel FOMO lasting more than an hour it's too late.
• You can lose BIG with FOMO so if you don't understand what you are buying and why, but merely following a chart then always buy small to minimise potential losses and maximise reasonable safe gains.
• If you don't understand something or don't believe in it never blindly hold it after you've bought it regardless of whether you are selling at a loss, or a smaller gain than you desire. Sell those altcoins sooner rather than later to buy altcoins you do understand and believe in and you'll regret it way less further down the line.
• There is always opportunity elsewhere or at another time if you are looking or willing to be patient.
• I no longer join FOMO rallies. I've seen them end too badly, suddenly and unless I know the coin well I often time entry too late. Most of the time you will too.

The only way to discern if the sudden rise in coin value is due to pre-rigged market manipulation is to look at:

• the value proposition of that coin
• the order book
• the depth chart
• the pattern of change on daily trading volume (and liquidity)
• the price charts (15 minute, hourly, 1 day, 3 day, 7 day, 1 month, 6 months)
• the news cycle relevant to that coin

A sudden rise in coin price heavily out of proportion to the rise in daily trading volume should be the first sign to alert you to a pump & dump scam.

It is best to attempt to explain the reasons for a currency’s price swings before making the decision to invest. Did they recently make an encouraging announcement? Have they procured a promising partnership? Did something in their environment change favorably? If you can’t see indicators for why the price may be moving, it is likely nothing more than a momentum trade, and you must be prepared to weather the probable volatility that will ensue.

Professional traders risk less than 1% of their capital in a trade, 2% in a maximum commitment. (To be fair. I know almost no crypto traders who do this. But the lesson here is, don’t go all in or all out on a trade.)

Look for tokens that are very central to the operation of that decentralized network Not just rent seeking tokens that could be forked out of the network. They need to supply a valuable service of the project.

Look for network effects. As the project grows the token value should grow corresponding to either innovation or action of that network. If this is not the case, the token is not a sound investment.

Don’t get afraid when a coin drops all of a sudden. Prices can go up and down very fast in crypto country and it can often be manipulated by large players. Always check if you can find actual news of a exposed fundamental flaw in the technology or a problem with the devs etc. Go on the subreddit or slack of the coin and see what’s going on.

When a coin get’s a correction after a price rally, and people start taking their profits, a lot new traders get scared and sell since they are afraid to lose all of their money. In the community this behavior is called “weak hands”. Now don’t get me wrong. Sometimes a particular coin might have actual problems and it is best to cut your losses short.

Bitcoin has ‘died’ in the media so many times by now, that 99bitcoins.com has created a list of obituaries. https://99bitcoins.com/bitcoinobituaries/

What have been your eye openers? Please let us all know down below in the comment section! Wisdom of the crowd!