I promise to keep making fun of Bitcoin buyers even after they all have Lamborghinis and yachts.
The Bob Pritchard Column
These are the top seven tips people should take into account when buying or trading crypto currency. However, 99% of people who know they should follow these rules still forget them multiple times before they become second nature.
- Don’t be emotional. The best trader is the trader without any emotions, They are not phased by a 200% increase or a 70% dip and just take profits or rebuys more.
- Buy low and sell high. This is really obvious, but the majority of crypto traders simply do the opposite. How do I know? Because people bought lots of Bitcoin when it was already at $15,000 and they sold them when it was down at $10,000 and some even sold when it was down at $7,000 making it crash to $5,800.
- Don’t make all or nothing buys. Many people either sell all of their crypto holdings in a particular coin or buy all of their crypto holdings in a particular coin at the price they consider to be an opportunity or to avert a perceived crash. An experienced trader only sells 10% of a crypto coin when they have made 50% gains, another 10% when they have made 100% gains and always sell another 10% of their crypto the higher it goes. That way, they always make profits and also have money to rebuy when they dip. Inexperienced traders never sell, because they become too greedy or sell everything too early.
- Don’t put all your eggs in one basket. Don’t only hold one coin, hold the best ten coins you can find after researching them and one of them will likely make a 1,000% return and make up for possible losses with other coins.
- Don’t put all your coins in one wallet. Have your coins distributed through exchanges, online wallets, cold wallets and paper wallet, so that if one gets hacked or you lose it, you don’t lose it all.
- Do NOT invest more than you can afford to lose. If you put more money into crypto than you can afford to lose, you also become much more emotional and make bad trades. It’s a vicious cycle. Instead, only put a maximum of 10% to 20% of your whole net worth into crypto currency.
- Do not buy coins that are hyped without any substantial improvement in their technology. For investors, it makes sense to balance hype coins against anti-hype coins. One strategy is to funnel hype gains into an anti-hype portfolio. Another is to forego hype coins altogether and buy the boring.. A good rule of thumb: If you think the coin is in a bubble, look at the project’s fundamentals and ask yourself how much of its market cap is because of those fundamentals and how much is because that project is fanning the flames of speculation.
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