Smoking to millionaire investment strategy

in #investments2 years ago (edited)

Hi all

Thanks for those who have read my first post and thanks to everyone else for the amazing content I have been reading here on Steemit.

One thing I have been deciding upon this week whilst do my homework on the altcoin market, is my strategy for my long term holds of my investments. I have been reading a lot of material lately about just buy them, stick them on a hardware wallet and come back in 5 years time. Now while I believe that to be fundamentally correct, there are a few things to watch out for and also why I believe you still need to be active on these investments.

Many years ago when I first looked at stock markets the very best bit of advice I ever read was from Robbie Burns aka The Naked Trader. He explains how to make money from losses, while that sound crazy its true and has been something I have never forgotten.

Firstly I had a very brief discussion with @jammer2k about stop losses and why I believe they should be in place. Ultimately the aim of investment is to make money so why oh why would you want to be watching your investment lose money and go down week by week. By implementing a simple 10% stop loss on your initial order you protect yourself from this. This is your investment and you need to protect it, the markets are tough enough as it is let alone making it more stressful by having losers on your portfolio dragging you down.

You have to be calm and emotionless when it comes to investing and by nature as humans we do not like to admit when we get things wrong.(especially males, go on admit it) Now some will tell me well so what if it goes down by 40% it will come back up again! The simple answer is why wait for that and why lose that amount in the first place. I want to see + signs on my portfolio not - signs, you will make more money from having the awareness to take a loss early and invest it into something that is turning positive.

There are 1,000"s of coins out there so if your trade has been placed and it goes south there is normally a reason for it so try and figure that out, is there a whale about? Has some news just come out? If not then keep a watchful eye and if it keeps dropping take it out at around 10%. Each trade you make should have two targets one being the target price and one being the stop loss.

On to the long term hold that is doing well, note most people will sell their winners before they sell their losers, whilst I agree we put them away and hold them we should also reevaluate everytime the price hits your target. At that point we research the coin again and ask ourselves would we still invest it it now? Hows the tech behind it doing? Is there a better competitor out there? Is management still active? What updates do they have? In a market where only 90-95% of coins will survive the long term it is crucial to always revisit and ask yourself these things. Remember a profit is only a profit when its taken, so decide on wether to stick, top slice or even top up but always keep revisiting the long term hold and add new stop losses and targets.

Anyway enjoy your investments but we watchful and vigilant, I hope this will be of some help.

A big thank you to Robbie Burns for his book The Naked Trader where you can find out much more about this subject.

Have a good week.

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