In this article, we will give you the advice that I wish someone had given me when I first started learning how to make money in the cryptocurrency market. We hope that our little experiences, our lessons will help you succeed in this market.
Solid Market Psychology
Technical analysis is an extremely useful tool, helping you make decisions, but it is not a prophet of success anyway.
I also want to point out that the phenomenon of FUD (Fear, Uncertainty and D) and FOMO (Fear of Missing Out) is extremely powerful, sometimes even the ideal chart model is broken, causing the Black Swan phenomenon (unforeseen phenomena). Remember to always practice risk management skills and take advantage of deep drops.
We also need to understand more about an echo chamber. If you join an official Telegram channel of a coin and you are talking to people who have stakes in that coin and want the coin to go up. I failed when I first started trading. I heard a lot of people in the group shouting “this coin will go up to 1 USD!”. When you meet enough people shouting like that, it gets into your mind and you start believing it. FOMO starts.
Learn how to calculate the price of a coin
There were projects that our members participated in that lost a lot of money. Many people told me that this coin will go up to a certain amount in a certain period of time. We didn’t know how to calculate the price of a coin and how the capitalization works and we blindly invested when the coin was at its peak. And so we paid the price for that action.
If you want to invest in a cryptocurrency, you need to know if their project is sustainable. How much capitalization can they grow to? If the total number of coins issued is one billion and their development team is promising that each coin they issue can be worth $1. That means their capitalization will be one billion dollars. Is the scale of the company behind that cryptocurrency possible? A billion dollars is a capitalization that very few companies can achieve.
X, your best friend – your worst enemy
X (formerly Twitter) can be a great source of information as well as a risky source of information. Keep in mind that 99.9% of the people who are posting charts on Twitter every day have already taken a position in that project, they have bought the token/coin and now, they are trying to influence the market in the direction they want.
Ask Questions
What indicators did that person use to come to that conclusion? Don’t know what specific indicators they used? Ask questions. Then look it up online, research it. Check out the topic and learn about it. We’re not going to teach you technical analysis because there are many people who have much better lessons than us.
Feel free to ask questions
Most X accounts will be happy to point you in the right direction and explain the charts when you ask them questions but they won’t answer questions about whether or not to invest. I tend to ignore those questions because for a beginner, I’m not a licensed financial advisor. After all, I don’t want to be “thrown stones” when I make bad decisions. You know I don’t have a 100% success rate and I’ve failed many times. I think anyone who says they have never failed is a liar, and anyone who thinks they will never fail is an idiot.
General Advice
Take your time. You will always have another good opportunity if you miss the last one.
Take a breath
On the other hand, if the coin you bought is going down in value, ask yourself if the team is legitimate and if the coin has any real use case. If so, then hold the coin, as the price will eventually stabilize. Of course there are exceptions, but in general, holding coins through storms is a good choice. I also earn more from holding. Doge is an interesting example, I bought it at 15017 sts and held it for 3 months, and sold it at 100+ sts.
Owning altcoins is not the same as owning BTC
Is your goal to own more BTC or invest in more altcoins? Remember to answer that question when building your investment fund. If your goal is to own more BTC, be careful not to get too dependent on one coin.
Bitcoin is king
Always keep an eye on BTC. It will destroy other coins very quickly if you do not monitor it regularly.
Invest in a hardware wallet
Withdraw your long-term, non-trading coins from the exchange. Think about how you would feel if one day the exchange suddenly collapsed and all the coins were lost.
The best, most popular and cheapest wallet today is the Ledger wallet, you can learn about it.
Security
Use 2-factor security and do not use SMS security, choose device authentication (eg Google Authenticator). SMS authentication has been hacked. This is the most effective protection to prevent anyone from being able to hack into your account. Use different passwords for different exchanges. This may be more difficult, but it is better than losing coins, right?
Use bookmarks for exchange websites
Go to the exchange website and save it to your bookmarks. Use bookmarks instead of googling that website. Scam sites often appear at the top of search results because they pay a lot of money for Google advertising.
Never trade alone
When you trade alone, you have no one to discuss questions with, look at charts and share experiences with. Some people have negative thoughts about signal sharing groups, you have to pay fees, while others praise them to the sky. If you want to join such a community, I recommend you join research-based groups.
You need to learn how to read the market effectively and know how to protect your interests. What will you do if the group you are joining collapses, when you still know nothing about crypto investing? Then you will have to suffer the consequences one way or another. You can pay fees to learn, lose money to gain experience or both. Personally, when I first started, I joined a fee-based group and so far, I have not regretted it. I wouldn’t have the knowledge and skills I have now if I hadn’t done that in the past.
Even if you don’t plan to join a paid group, join a free community, but again, be careful with these communities, they might be trying to steer your thinking. A paid group will usually prevent that and in those communities, you will find serious investors/traders.
Conclusion
Patience is the key to crypto trading. Don’t feel bad about missing a trading opportunity because this market will give you many opportunities to get rich. Remember that in the crypto market, making money is easy, keeping money is much harder. Don’t let greed lead you and quickly close your profits when the time is right.
