I wrote out a little mini series about crypto currency investing and trading tips on the blog over at: https://www.themoneylifejuggle.com/blog
The series comes in 4 parts and I wanted to share them here on Steemit. They may be altered a little bit for the Steemit platform but if crypto is something that interests you then feel free to follow us here and on the website as crypto will be one of the main topics we focus on - along with other financial education. Disclaimer - please don't take what I write as financial advice, I am not a professional financial adviser and do your own research before investing in anything. Make your own decisions and consider consulting with a financial professional.
A lot of the methods explained in this series of tips can be applied to traditional stock trading or investing, however; there are differences and the markets operate slightly differently.
Here is the first Crypto tips post, tips 1 through 10.
DON'T BASE YOUR DECISION OFF TRADE ALERTS, TWEETS OR PAID GROUPS.
Can money be made by following trade alerts, tweets or paid groups? Sure, but money can also be lost by following these things. You need to learn how to trade, why to trade and most importantly when to trade. Blindly following alerts will not teach you this. You also don't need to be paying someone for information that is readily available to you with a bit of research.USE COINMARKETCAP
Coinmarketcap is a website you can use to check on all the current crypto currencies. It lists them out by current market cap and has information such as; circulating supply, total market cap, 24h change, info on where to buy the currency and much more. If you are new to crypto and simply want to invest then look at the top 10 or top 20 coins, research the project and make your own decision. If you are trading then you may want to dig a little deeper into each project.USE COINMARKETCAL
COINMARKETCAL is a website which lists coming events for Crypto projects. You can use these as part of your research when deciding what to invest in, however; it isn't bullet proof. Many of the things listed may just be rumors or not actually happen. There is usually a percentage given as to its validity, however; I have fell victim to some news on this website. Apparently a project had some fantastic news coming but it actually turned out to be basic news and the price dropped - so be careful and do further research, do not base your decisions entirely off this site but use it as a tool for your research.EVERYONE CLAIMS TO BE A GENIUS IN BULL MARKETS
Don't think you are invincible when there is a bull market (Upward trend). Similarly don't believe everyone who claims to be a genius when there is a bull market. Learn to make money in bull and bear markets (downward trend). Crypto is quite unique and often it is more profitable to hold your position even if the price slides down. Think longer term.PLAN YOUR TRADES
If you are actively trading (short term) rather than investing then plan your trades. There is a post on our blog about the difference between investing and trading if you do not already know.
If you are going to be making a trade then you want a clear defined plan. Plan your entry point and understand why you are entering in that area and also plan an exit point or exit strategy. You could plan to take profits on the way up, plan to pull out 100% of your money at a certain price target or even set yourself a stop loss or mental stop loss so that if the trade doesn't go your way then you pull your money out and minimize your loss. ............read the next point.
PERSONALLY - I DON'T USE STOP LOSSES WHEN TRADING CRYPTO, ONLY WHEN TRADING THE STOCK MARKET.
You may be familiar with the term 'HODL' if you are into crypto, if not then it basically means Hold. You hold your position. Understand that there are a lot of terrible crypto projects and scams out there - try your best to stay away from these. A technique crypto traders tend to use is to open a position with a project they believe in and if the short term trade doesn't go as planned they will simply hold that position with the goal of it going up again over time. This has actually proved to be quite a lucrative technique in the crypto space. Ones who don't actively trade are thinking of the long term plan 100% of the time.
If have invested in a crypto with the intention of taking gains in the short term but the price drops, as long as it is a project I believe is worth more, I will hold onto my position. If I have entered a trade based on speculation I will take a loss and cut that loss quickly. See point 3 in this post - the price dropped from some bad news and I exited my position because it wasn't necessarily a project I had faith in - I simple entered a trade based on pure speculation so when it never went my way, I got out of there.UNDERSTAND THE DIFFERENCE BETWEEN TRADING AND INVESTING.
A post I made earlier in the blog about trading & investing can be found here: https://www.themoneylifejuggle.com/blog/the-difference-between-investing-and-trading
Same principle in the crypto space - investing is buying at a lower price, holding long term and seeing gains over time. Trading is entering a position with a clear short term plan and you buy / sell to make gains in a short time period.
CRYPTO TRADING AND TRADITIONAL STOCK TRADING ARE DIFFERENT
Don't assume that because you are having success in one type of market that you can have success in all markets. They work differently so you need to learn slightly different methods. For example buying and holding a penny stock probably isn't a good idea.BE BOTH A TRADER AND INVESTOR (IF YOU CAN!)
In the crypto space it is widely accepted that one of the main ways to acquire wealth is to find a promising project early on and invest your money. You then hold this position for the long term and see gains over time. We all know you would be a multi millionaire if you invested in Bitcoin years ago and held it - find some projects with good applications, a good team and promising whitepaper (basically outlines the project) then invest for the long term.
As well as being an investor you could also be a trader with a separate pot of money and use this pot to actively day trade. When trading you are looking for volatile movements to try capitalize on and get those short term gains. It is common knowledge that a large percentage of traders lose money - if you aren't willing to take higher risks then consider just investing money for the long term.PICK SOME LONG TERM PROJECTS TO INVEST IN AND ASSUME YOU CAN LOSE 100% OF THE MONEY
A good little technique is the 'angel investor' method - where you find a good project, early in is development and invest a set amount of money with the assumption that you could lose all of it. So in theory if you invest in 5 projects but 4 of them fail then the one which succeeds will probably recoup all your losses and then give you profit.
I like to think of this as a 'moon bag' haha!! Basically a project you have invested in and are willing to see it go to zero but simply hold your position in case it 'goes to the moon'. (price rises exponentially). We have seen it with Bitcoin, Ethereum, LiteCoin, Ripple, plenty of alt coins. There is potential for a project to sky rocket in price, so investigate some projects that are in their early stages, invest and hold it for a long period of time. Look at the traditional stock market and the early investors of Facebook, Twitter, Apple Etc - they all invested really early and seen exponential gains over time because of the companies successes.
So that is the first ten tips for crypto currency trading and investing. As ever, guys, the information on this site and all posts IS NOT to be used as financial advice. Please do your own research before investing in anything and consider consulting with a financial professional. Never take posts on the internet or from other people as a reason to invest, always do your own due diligence.
The other parts to this mini series of posts are already on my blog but I will be posting them to Steemit over the next few days.
All the best.
awesome post. really helpful. you got a twitter handle?
Thanks man. My personal twitter handle is: @tradertommy88 - that's where I mainly post about crypto and do any general chit chatting about Crypto.
The one for the website is @MoneyLifeJuggle but it mainly just reposts blog articles.