Crypto & Cardio #8 - Three Poker principles for investing in Cryptocurrencies
Having been a fairly successful playing online poker during the early noughties, I picked up a few principles and strategies that I've found converted well into the realm of Cryptocurrencies.
In today's video I discuss 3 basic poker principles that I've used when investing.
1. Play only good hands
With thousands of crypto tokens/ projects it is 'play every hand that comes your way.' Particularly if you're made aware of a project by a friend that has done well out of it.
However I've found it most profitable to play 'good hands.' Not just in the quality of the crypto project but also in terms of timing an entry.
It is never possible to find the perfect time to invest, however being aware of whether the hand your playing is 'good' or 'so-so', will inform not just whether I invest but how much I'm willing the risk 'pre-flop.'
2. Don't get bluffed out
There have been many times, after I've bought at 'great coin' a 'good entry point' that the market hasn't behaved the way I expected in the short or medium term. It is very easy to get bluffed out of your position particularly if there is "FUD" surrounding a coin.
Just like in poker, I've found it is important to assess the odds and remain firm in my conviction if the fundamentals are good. Sometimes I up the ante by doubling down on my investment when the market crashes. For me this is the poker equivalent of "re-raising".
It can be high risk however in a market when there is so much manipulation, it is important that you prepare for your decision to be challenged and not expect a smooth ride to profits.
3. Know when to fold
Knowing when and how bail on a coin is important too. I've found becoming emotionally attached to a project can lead me to overlook fatal flaws in a project. I've found that knowing when to cut my loses or settle for a smaller profit is important.
Know how to fold is important too. Dumping all your coins in a 'rage quit' isn't always advisable. Sometimes on even a doomed coin the market gives an opportunity to get out with minimal or no damage. I sometimes look to wait for those moments even if I have mentally checked out of a coin. For me this is the equivalent of not folding your hand 'out-of-turn' in poker. Or "checking" even though you know you're going to fold to the next decent raise.
So that is for now. Can you think of any poker principles you've found have transferred well to crypto investing/ trading?
My video is at DLive
Your list is good. I would add the following:
Don't gamble/invest more than you can afford to lose. I've always been a recreational poker player with a job, so I've never relied on my poker winnings to support myself or my family. Losing is not fun, but if I lose, my family's standard of living is not affected one iota. When I've play in Las Vegas, I often play with young men and women who are trying to make a living at poker. When they suffer the inevitable bad beat, it often puts them on tilt, causing them to lose their composure and compound the loss by playing an undisciplined game. Sometimes in their determination to get revenge, they go from being a disciplined player to one making the errors you noted above - i.e., playing every hand and never folding. A lot of this would be avoided if players did not play above what their bankrolls can comfortably afford. The same applies to crypto investing. If you're only investing what you can afford to lose, you're less like to panic sell quality assets during a market correction.
If you're going to play to win, study and preparation is absolutely indispensable. Many people think poker is an easy way to make money, perhaps from watching TV. They fail to realize that poker has become much more sophisticated over the last couple of decades and continues to evolve. The game has attracted more players who want to pursue their dream of making a lot of money without a job, and many of those players are willing to spend A LOT of time studying poker theory, mathematics and statistics to improve their poker skills. Very sophisticated software and coaching services are also available to serious players. Unless you're willing to put in the time to even the playing field, you are highly unlikely to be successful over the long term in modern poker. There may have been a time when it was possible to invest in any crypto asset and make money, but those days are largely over. We also saw a similar dynamic during the tech bubble of the 90s - it was easy to make money in vitually any tech stock on the way up, but most companies failed after the market crashed, causing the bagholders to lose everything. Conducting proper research and knowing what you're doing will be essential for success in the coming years in the crypto market, but in my view will be richly rewarded over a sufficiently long timeframe.
Well, I'm not a poker person and I don't really know know the principles but I've applied the second principle you talked about on some great coins
Thank God I was not bluffed out
Play in bankroll.
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The way you explained poker and investment in three steps being comparable is right on point. You can as well compare it to wheather your life is successful or not. Your life might be as well a poker game and you may not know about it.
Hold the strong once such as bitcoin, ETH, EOS..., believe in your hand, believe in your investment.
Don’t panic sell, don’t get fulled about your investment going to zero.
Knowing when to buy and when to sell is the difference between successful poker player or investor.
At the end patience is very important, because patience always pays off. On the other hand panic and greed is your biggest enemy. Not to panic and not helps you to invest only whatever you can afford to loose, that’s very important as well.
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cryptos are future, thanks for this information..
great queto
"don't get emotionally involved" is the best advice for any investment but especially crypto.