I aim to make good money from my crypto investments

As a new technology battling its way through a volatile market, there is certainly no guarantee of this. I've already made my fair share of bad investments, I treat that as part of the learning curve and I am thankful for those lessons. The more painful the lesson, the better it sinks in.

It occurs to me that I have never described my overarching crypto investment plan. I've alluded to it and described aspects of it, but I've never laid it all down in one place at on time. Since I think that my strategy may benefit others - this post is about how I invest in crypto and what I think will (hopefully) make me money.

From https://en.wikipedia.org/wiki/Norman_Schwarzkopf_Jr. ; shared under license

How to get rich with crypto - my strategic plan

A good plan is simple

Two decades of military experience has taught me that the more detail you plan into something, the worse it becomes. This is because there is a greater chance of something not going according to plan. This doesn't mean that you shouldn't incorporate all aspects into your plan, or that you shouldn't plan for contingencies, you must do that! The key is to make your plan broad and flexible. The details can be worked out later when necessary. Here is my plan:

My strategic plan for crypto investing

My strategy is to invest in good solid coins with growth potential and low risk. The idea is that these form the core of my investment. The aim is not to sell these coins, but rather to keep them as a slowly growing (relatively speaking) store of value. My largest investment of this kind is NEO, a coin with a high enough market cap not to be a big risk, and a low enough market cap to grow considerably more than the likes of Bitcoin and Ethereum (both of which I also hold in lesser amounts).

That's not the "get rich" part of my strategy, it's more like my backup plan. Call it "get rich slowly".

To get rich a little faster (I hope), I have another concurrent part to my plan.

There are four ways to make money in this world:

1. hard work

Oh wait, sorry, that's a lie perpetuated by the previous generation - forget that one!

There are four ways to make money in this world:

1. Have money already and invest it.
2. Get very lucky.
3. Steal.
4. Take risks.

Have money and invest it

Not all of us are born a Trump or a Hilton or a Windsor or a Rothschild or an Oppenheimer. For most this is not an option. If you are rich, then well done, you probably don't need to read this blog! Also - if you like what I write then please feel free to send me massive quantities of STEEM to say "thanks"!

Get very lucky

Getting lucky means something like winning the lottery. But most luck is just about being in the right place at the right time with the right people. If the stars don't align in your favour then you're ****ed and there is nothing that you can do about it! Forget luck. Save your lottery ticket money for crypto!

Steal

I hope that this is not an option for you! Sadly the crypto world is packed full of opportunistic thieves and conmen. Don't follow this route, just don't. What's the good of having money if you can't face yourself in the mirror? Also if you are one of the people who have wronged me e.g. some of the leaders of Envion, or Titanium or Centra, then if I ever find myself within range of you, expect me to give you a hearty high-five! 🙏 In the face. 😧 With my fist. 🤛

Take risks

This is the only option remaining, and the only viable one.

At the risk of sounding obvious: taking risks is risky! Be careful when taking risks, as I have said, I am careful but I have still lost quite a bit to risk. I don't mind though because it's part of my plan. To make money I know that I need to find high ROI coins and invest in them, so that is what I do. I have many very low market cap coins, ones with a lot of room for growth. Some of them I bought in ICO, others I bought on exchanges, both ways are risky, but ICOs probably more so (there is more to go wrong).

Many people hype their tiny little coins and the vast majority are probably rubbish coins which will die off! Remember that! You need to carefully choose which ones you buy (I often write about such coins). Chances are that several of them will still disappear from the market, but the idea is to play a percentage game. If I invest $100 in 10 coins and 9 of them die out but the tenth one goes up in value by a factor of 100, then I still score a lot. I walk away with a decent profit of about 10 times what I started with. 100x sounds like a lot, but look at the entire history of most of the cryptos, you can easily make a 100x gain if you get in early! I'm trying to avoid creating the typical crypto hype by using figures greater than 100x, but it is certainly possible!

That's all there is to it. My basic plan is to have a nest egg of core cryptos that are stable. I then invest the rest of my money in several low market cap coins and wait for them to "Moon".

Assumptions I make about my strategic plan:

• The crypto market is growing as blockchain technology gains traction.
• I am capable of adequately securing my investments from theft, natural disaster etc.

NOTE: The "hard work" statement is a bit tongue-in-cheek. To make a success of anything should require hard work and often does. Crypto investing is no different. the more effort you put in, the more potential rewards you will reap.

Fine tuning the strategy

As I said earlier the plan must be simple, which it is. I build a few extra things in on top of my base plan, but I can change them and they are not cast in stone like the plan itself. Where necessary I tailor it by making little sub-plans for specific coins. events, markets, exchanges etc. I want to share some of them, because they are part of my current plan.

I have several intermediate coins. They lie somewhere between my low market cap risky coins and my stable high market cap coins. They offer half the benefits of the small coins, with half the benefits of the big ones. Something along those lines.

I always use the "thirds" rule-of-thumb which I invented for myself. I don't keep more than one third of my cryptos in any one wallet, on any single exchange or in any one coin. This is a safety and security measure. The idea is that if I lose some of my investment, through whatever sort of disaster, I will still have at least twice as much remaining as what I lost. I strongly recommend this as a part of your investment strategy! It doesn't only have to apply to crypto.

I like to "hodl". This means that I very seldom sell what I buy. The idea is to get a good coin while it is still cheap and then hold it until it grows considerably in value. Only then do I consider selling some or all of it. It's difficult to do in practice, but the theory is sound.

The broad strategy of "buy low, sell high" applies. In crypto terms this does not always mean dollar value. I very seldom buy crypto with fiat. I can count on one hand the number of times I've placed fiat on an exchange. With crypto you should always be trying to beat BTC (at least for now, while it enjoys such market dominance). So sell coins when their value is high relative to BTC and buy the opposite scenario. This way your crypto holdings should increase in BTC terms.

I don't pull out of crypto when the market dips. This is not necessarily a good strategy, but it is my strategy. The stress and effort of trying to time the market correctly is not worth it to me. Because of the assumptions I listed earlier, I believe that dips in the market are temporary. So I hold on and take the punch (as I am right now), knowing that things will pick up again later. It's also amusing to see how people pretend they know how deep a dip will go or how long it will endure. Having weak hands and selling at the first sign of trouble does not make you a good or wise crypto investor! It would be a different story if you predicted that the market was going to drop by 70% and then sold, but you didn't. (I despise weak hands, they have no place in crypto!) Don't underestimate the effects of stress on your quality of life. Rather pick a trading strategy that minimises the stress of when to buy and when to sell. Which would you rather be, richer or more happy? I'd choose "happy" at least nine times out of ten.

I never sell all my BTC. BTC is a special case coin and dances to the beat of its own drum. You should always hold some as an "insurance policy". I aim for 10% of my crypto portfolio. BTC is mainly used as a store of value and not as a currency. As such it doesn't have to worry about the newer, faster coins. Technology improvements have little to offer it: it already does what it needs to do. It's not going anywhere soon, but it also won't gain value as fast as most other coins.

I aim to take some profits every six months. You could choose whatever period suits you. The profits taken are based on the value of my portfolio at the start of the six month period. For this purpose I use USD, but you could also use Euros, BTC or another local currency. Profits taken are based on the percentage increase for the last six months. If I make no profit, I take nothing out. If I make a small profit, I take a small percentage, if I make a big profit, I take a larger percentage. These percentages suit my lifestyle and my income, you must decide on your own. And for the record: no, I certainly didn't make I profit in the first half of this year! I suggest that you take some profits.

Final comments

You must tailor your plan to work for you.

It must suit your risk profile and your trading style. A word from the semi-wise: if you are scared of risk then what the hell are you doing in the crypto market at this early stage? Are you insane? A believe that some risk is good. Take a few chances in life, live a little. The older I get the more I realise that taking chances and stepping out of your comfort zone is a very healthy and fulfilling thing to do!

I'm not an American, but I did use a picture from the Wikipedia page of the late General Norman Schwarzkopf, the man who rose to fame as the US Military leader during the Gulf War. A big shout out to "Stormin' Norman", one of the greatest military leaders of his time. I know that his achievements may not be appreciated by the average civilian, but from a military perspective the man is a legend. Respect.

Yours in crypto,
Bit Brain

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Published on

by Bit Brain

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