1. Only Invest Money That You Can Afford to Lose
This is the most important rule in crypto investment, and also the 'mother' principle for all other rules. When you invest in cryptocurrency, consider that money completely lost. There is no guarantee that you will get your money back. The crypto market is not only volatile but also has risks from unforeseen factors such as hackers, system failures, or government regulations. If you are investing money that you cannot afford to lose, then reconsider your financial situation. Don't rush to use credit cards, borrow money, or sell all assets to invest in cryptocurrency. That is not a wise plan but a desperate action.
2. Always Monitor Bitcoin
Bitcoin is not only the first cryptocurrency but also the 'core' of the crypto market. The prices of altcoins (all cryptocurrencies except Bitcoin) often have a close correlation with Bitcoin's volatility. When Bitcoin suddenly rises, altcoins may fall in price as money flows toward Bitcoin. Conversely, if Bitcoin drops significantly, altcoins usually follow. The times when altcoins perform best are often when Bitcoin grows steadily or decreases slightly, or when Bitcoin does not fluctuate too much.
3. Don't Put All Your Eggs in One Basket: Diversify Your Portfolio
To minimize risk, diversify your investments across different coins. If you believe that the cryptocurrency market is just beginning and has a lot of growth potential, diversification helps you capture benefits from the growth of many coins. In the past, Bitcoin has grown significantly but still cannot compare to altcoins like Corgicoin, which increased 60,000 times, or Verge, which increased 13,000 times. Although profits from Bitcoin are also impressive, expanding into other coins can yield much greater returns.
4. Don't Be Too Greedy - Making Money Is Already a Success
One of the most common traps is greed. When your coin increases by 30%, consider taking profits. If your target is 40% or 50%, you should still take some profit at 30% to secure some results. Don't wait too long, as when the market turns, the profits you made can become losses. Developing the habit of taking profits will help you not miss opportunities.
5. Don't Invest Blindly
In the crypto market, there are many who are willing to exploit inexperienced investors for profit. They will promise that a certain coin will 'moon' to raise the price before they sell off. A good trader will do their own research and evaluate information, never relying on unverified advice. The experiences of others are only for reference and never guarantee success.
6. Always Learn From Mistakes
Each failure is an opportunity for you to learn and become a better investor. Don't view losses as failures, but see them as lessons. Even experienced investors have lost money at the beginning. For example, there was a trader named Miles, who lost over 70% of his capital in just the first month of trading. If you don't get discouraged, each loss will teach you how to avoid making similar mistakes in the future.
👉 These six rules will equip you with the knowledge and mindset needed to become a smarter and more resilient trader on the challenging path of cryptocurrency investment.
