Cryptocurrency investing : 4 straightforward guidelines!

in cryptocurrency •  3 months ago
  1. Invest only what you could afford to lose! 
  2. Diversification
  3. Choose coins you understand. 
  4. Invest periodically


1. Invest only what you could afford to lose

This is probably the most important rule.
Bitcoin could go down. The whole market could go down and never recover.
This is not what I believe. But you should take this in consideration.

Always think of the worst case scenario when investing. Not only for cryptocurrency.
You could apply this way of thinking on any market.
This way , you will always be aware of what COULD happen.
Don't play with your future.

2. Diversification

I have been investing in cryptocurrency for a year now. Not that much. But enough to hear stories. I can tell you...I've heard some stories.
I know one guy that invested 150k dollars into 1 coin! One! He invested it a few months ago.
You know what happend? He lost half of it.
If you play the game , then do it smart. Invest your money into several coins. This way you wont lose everything when 1 coin gets destroyed.

A good portfolio contains a mix of big coins ( Bitcoin , Ethereum , …) and some altcoins.

3. Choose coins you understand

This is important. It keeps you from panic selling when the market goes in a dip or crashes.
If you really believe in a project , you will be more confident riding out the storm.

For me , I only invest in coins I use or at least understand.
 
4. Invest periodically

Don't go all in.
A good strategy is to buy coins at a regular basis. Weekly, monthly,  ... .
You will give yourself an advantage when the market goes down.
Cash! Cash is King.
You will hate yourself if you dont have cash in a temporary downtrend.
I learned NOT to buy coins when they surge. I buy when they go down.
Buy them coins at a discount!

Thank you for reading. Hopefully you learned something!

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Hm, diversification is always a point I like to discuss. How much diversification is good? How many coins can you actually follow at once to understand what is happening, and be able to make a decision on when to close your position?

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Good question!
My portfolio contains of 4 coins. I think 5 coins is a good number to have. For now I dont think its a good idea to invest in 10 coins or more. We are still in an immature market. Bitcoin leads this marktet. If it goes down , the whole market goes down. If it goes up , the whole market goes up. In this stage of the game , diversity is good to avoid a complete loss like bitconnect.

I also never sell everything. You never know if a coin explodes!

nice and commonsense. good post!

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Thanks!

thanks, very useful guidelines. Please people, don't invest what you can't lose. And please, do your own research before investing.

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Thanks a lot!

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That's the most important point! Research! Don't spend money on something you do not understand

A great effort deserves encouragement
Continue to follow you and I hope you will be honored to follow up

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Your words encourage me! Thanks.

I like your advice. I haven't learned the weekly or monthly thing yet because I am thinking of the fees. Lol. I should still try it now that I've read your post.