This information comes from my own personal experience, what I have learned and what I want to share with new crypto traders entering the market. I learned the hard way how easy it is to lose money by making bad decisions with my initial investments, this has taught me to be a better trader. I did not get to a point of growth in my investments on my own, but my early mistakes were rooted in bad advice. Stay tuned to my blog, as I will be updating along the way. We as traders are a community and the positive assistance I have received I want to give back.
(The Basics)
- Where to begin:
-ask yourself first why you are investing, how much you are willing to risk (no matter what, you are risking assets by entering any market space whether crypto or fiat).
-only invest what you are willing to lose! Luckily my initial mistakes were made on small buy-ins, I would recommend entering a small amount and get a feel for the way things work in terms how how quickly buys and sells occur. It all comes down to the small things!! which leads to point 2. - Research. EVERYTHING. Plain and simple.
-If you need to know what to research, well I recommend starting there. They key is avoiding bad advice, or limiting yourself in how much research you do, even on a single coin. Before you even get the point of purchasing your first coin(s) learn about what you are investing in. Each coin goes through stages before most being listed on markets. Already we are getting ahead of ourselves. Remember it isn't just a coin you are investing in, you are investing in much more than that. There is a lot going on beneath the surface.
-Learn what a block chain is, why it is important and how it may effect what you are investing in.
-Research what a white paper is for a coin listing. Get familiar with it, this is where the road map for what you are investing in is located. Research why a solid white paper is important. Along with the white paper there will be (should be) analysis for what product or application the coin has.
-Research the team behind the coin. Who each member is, what they bring to the table etc.
-Avoid social media and especially main stream media when it comes to coin recommendations, specifically when you are new to the market, it can be hard to see past the hype (we will get to that). Ask yourself why this person/organization is pushing a specific coin. What do they have to gain from you purchasing and what do you have to lose? Again research, research, research!!! I can go more in depth at a later time if you would like me expound further on this specific point.
-research how you want to store your coins, in a wallet, physical or online (benefits and drawbacks to both). While doing this research keep in mind what is going to be the most secure platform for your use case! - This is not a get rich quick play, again it is an investment.
-Could you potentially see fast gains, absolutely. However, anyone making those kind of promises is flat out lying to you. A quick way to lose money is investing your own time and fiat taking advice from the guy in the fancy suit with a patreon that gives "solid" tips because he/she has x amount of social media followers. Anyone that claims they have a handle on the market either has no clue or is ripping you off by pumping their own agenda, and in most cases their own portfolio. That isn't to say that anyone giving advice is always wrong, in some cases watching for indicators in social media can be helpful, again refer to point number 2!
-Patience is key! I know you may be excited about entering the market, you should be but take your time. Again leading back to point 2, research what exchange you plan on trading with. Get familiar with the platform, the exchange and how it works, what charting they do and so on until you feel that exchange is the right place for you trade. If you have done your research and feel good about an investment go for it, always keep in mind why you bought into that exchange/coin in the first place. - You are not trading with FIAT currency once you are in an exchange that trades on any type of coin.
-Example of a way to lose fast: You buy into a coin trading at x amount of what ever FIAT you are using as a metric for your initial bid. After the bid is placed and sold you are now the proud owner of your first crypto you see the FIAT price drop. Your initial response is most likely going to be panic. A lot of new investors lose immediately right at this point.
-What matters are the SAT level the coin was at at the price you bought in. You are trading on SATs now not on FIAT!! The only time FIAT prices matter is when you plan to sell. So if you buy in remember to record what your buyin amount was, how many coins or portions of a coin you received, at what SAT level and at what price. You may see the FIAT price stay put, but the SAT level may have bottomed out at that price. So if you bought a coin at $1 for example and you see the SATs sliding but the coin is still trading at the same FIAT price and you sell you have already lost a portion of your investment! This is a market and everything corrects based on different metrics, and there are a lot of influencing powers driving the markets on a daily basis. Which leads me to the next point. - EVERYONE has an agenda! Not are all negative, not are all positive.
-BUZZ words...FOMO, FUD are common examples (HODL is as well we will touch on that)
-get familiar with these terms. FOMO = Fear of missing out. Example: you buy 100 coins of (insert whatever coin you want here) for $1 a coin. You see your investment growing slowly, you check it a little while later and you see the price has doubled so you decide to sell. The moment you sell the coin price and SATs starts moving even faster up so you buy back in. At this point you have re-entered at a higher price and a higher SAT level and you are burning gains you made after your sell. Never get upset about taking a profit! One point I's like to make here is that a good rule of thumb is to pull your profit off and keep your initial investment in the coin, again good judgement comes into play when deciding to leave any or all of your investment in. There are other numerous examples of this in numerous different cases.
-FUD = Fear Uncertainty and Doubt. This doesn't just drive new investors to make poor choices but effects even seasoned traders. Become a machine when it comes to trading, don't trade on your or others emotions. Remember you did your research already so have some confidence in your investment. FUD circulates throughout the media constantly, examples of this are: x media/social media platform reports coin x is going to fail or crypto has no future. This scares investors out of their place in the market or even from investing in the first place. FUD can drive a coin into the ground or to the moon. In some cases this can be good or bad. Not to sound like a broken record but DO YOUR OWN RESEARCH! Keep an eye on the market caps... - Diversify your portfolio.
-simply stated don't just invest in 1 coin, spread your investment out across a few different options or even markets. Not everything you buy into is going to be a winner all the time. Accept that there will be loss, this is life after all, and sht happens. The key is mitigating the amount of sht you deal with will be based on (again) research. - Don't stare at your wallet or your portfolio all day every day, put your phone away and do something else for a while.
-Constantly monitoring isn't necessarily a bad thing but it can and inevitably does hurt most new investors. Why, well seeing your overall FIAT dump suddenly because of a market shift will create an emotional response. This correlates with point 5 and FUD. - HODL
-another crypto buzz word. HODL = Hold on for dear life. It is exactly as it sounds and relates to all of the above. Remember the old adage, know when to hold 'em and know when to fold 'em. Basically if you got into a coin at a good price and SAT level and are happy with your investment HODL that coin during price dips. Again, markets experience corrections. The knowing part, or at least the inclination of what to do during a dip comes with experience. This is why I recommend entering with a small initial investment. - LADDERING. Buying in, buying more.
-when purchasing feel the market out. Yes you can miss out on an opportunity but again don't let this drive your buys and sells. To help with this I recommend buying in smaller increments of each coin you are planning on starting with in your portfolio. If you see growth and potential you can then buy in more, best to do so on a dip or a slow up trend. This is known laddering your buys, and helps remove some FOMO from your mind as well as minimizing SAT loss. - Learn to chart, read projections and plan for the future.
-this takes time. I recommend coinigy.com (not a promotion just a personal tool I use for my own charting). Research how to chart, there are some great instructional videos available on YouTube and other sites.
-explore sites that give projections on crypto and specific coins. Take their advice with a grain of salt and compare it with other projections and all the research you have done.
*Keep in mind I am not a finiancial advisor and I am barely scratching the surface here. I hope this has been helpful to some of you! If you wan't more detail on anything specific let me know and I will try to elaborate more.
Stay tuned as I am just starting to build this blog out, there is a lot of info here but there is also a lot more that can be addressed. Good luck with your trades and have fun with it!
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