The experiences I have learned after years of working in the crypto market might help you in your journey to conquer the crypto waves.
1. Capital management is the most important.
Having seen ups and downs, I realized that no matter how good your research and analysis are, capital management is still the key for success.
Financial markets are always risky, nothing is 100% certain, especially in a volatile market like crypto. The seemingly immortal empires can still collapse overnight. Luna, 3AC, FTX are just some examples.
Therefore, remember to make a capital allocation strategy. I usually divide it into 3 bags:
Safebag: which takes the biggest portion, for $BTC, $ETH and some top coins.
Moonbag: for low-cap projects, which have big pump potential in the long term.
Tradebag: used for trading back and forth in the short term.
In addition, I always keep an amount of 10-20% stable coin no matter it is downtrend or uptrend in case the market dumps to unexpected areas. Because no one knows where the peaks and the dips are :D
2. Learn to research the project yourself.
It is no argument that you can get the initial information from KOLs and communities. However, the next thing to do is always do some yourself.
By doing so, you will understand the project more, know what you are investing in and show some responsibility for your money. It also helps you determine profit expectations and hold steadily. If you do not understand the project, just a few small FUD will turn you into a paperhand immediately.
When there are not the answers for these 3 questions, it's best not to spend money:
(1) What am I investing in?
(2) What is the investment timeframe?
(3) What are the buy range, take-profit limit and even the stop-loss range, if any?
3. More than 90% coins will stay at the bottom forever.
After each downtrend, more than 90% of old coins will stay at the bottom forever. Only $BTC $ETH and some top coins can rally past the ATH. If you have no knowledge about the market, then just gather $BTC or $ETH to have more chances of breaking even.
4. Trend is friend.
At every uptrend, the “creators” make new trends to attract the cash flow. Hence, if you still keep the old coins from the previous trend, it is quite risky. Why is that?
Naturally, trends usually represent the market development. Each new trend is born marking a historical milestone of the industry. And because the crypto industry is growing more and more to a higher position, the new trends will come and go into stable development if it is verified to be valid.
A trend should usually be new and attractive enough to attract money inflow. For the old trends, investors have already known too much about them. The question is if they are still attractive, or they just leave the wariness to the investors. Unless the trend can renew itself, it can hardly make a comeback.
MMs are also business people, so pushing the trend is to earn money. While the number of new people buying at the top during the old trend is countless, is it easy for MMs to pump back for you to break even? Instead, following, pushing new trends and creating new projects is much faster and easier.
Hence, try to spend a lot of time observing the development of the market and getting the trends.
Trend is friend! Don't ignore a trend just because you think it's unreasonable. In this market which is already full of crazy things, the important thing is pamp your bags.
5. The nature of the financial market is a zero-sum game.
The essence of the financial market is a money game that is based on supply and demand and controlled by greed and fear. Remember that preservation of capital is more important than profit. When there is a profit, you should find a point to take profits gradually to preserve capital first.
Remember that when someone takes a $1,000 profit, there will be someone who loses $1,000. Don't be blinded by technology or idolize someone and stay on top forever. Once the capital is preserved, there will be a chance to make more. During an uptrend market, there is no shortage of deals that can multiply your money many times.
6. Stay away from leverage
Remember to keep yourself away form long-short positions and margins if you are not a professional trader. It will turn you from an investor to a gambler and drain all your profits as well as capital. The “deaths” of 3AC and FTX also come from leverage.
7. Understanding the macro is essential.
The crypto market is part of the world financial market. Therefore, understanding the macroeconomics and monetary policy is essential to make the right decisions with your investments.
Currently, the most influential money flow regulator is FED. If you don't do a lot of macro analysis, at least you need to understand the FED's policies.
8. If money is not in your account, it is not yours
That’s it. Even if you take profit and get the stable coin, the risk is still over there.
The first risk is that the stable coin can lose its peg. Take the UST as an example. Currently, its price is about $0.03, remaining only 3% of what "stable" should be: $1.
The second risk comes from yourself when observing the up and down waves, with your purge still full of money. Many people cannot keep themselves in the safe zone but throw their money in, changing their position from safe to risky.
I hope this article will help someone - those who are new to this seemingly potential market.
Thank you for reading. If you find it useful, you can share the article. And don't forget to follow me ❤️.
