Cryptocurrency Investing – Getting Started – Part 2 – Cryptocurrency Investing Strategy Basics
Cryptocurrency Investing – Getting Started – Part 2 – Cryptocurrency Investing Strategy Basics
Here is some guidance from me for getting started with cryptocurrency investing.
Part 2 – Cryptocurrency Investing Strategy Basics
3
Storage
For safety, it is best to transfer your cryptos off of the exchange to your personal wallet. You will need a cryptocurrency wallet which supports your cryptos.
4
Strategy
Investment advice for all investment vehicles, cryptos and others
4a
Risk
Invest only with funds that you can afford to lose entirely. There is risk. Some investments go to zero.
4b
Plan your trade and trade your plan.
Remain emotionally neutral as a basis for decisions. Avoid FOMO, FUD and greed. FOMO is Fear Of Missing Out. FOMO leads to panic buying, usually when prices are high. FUD is Fear, Uncertainty and Doubt spread by naysayers. If you pay attention to FUD, you’ll feel distressed and be tempted to stray from your investment strategy based on fearful emotions.
4c
Diversify
Find a portfoliio balance which is appropriate for your life situation.
4d
Allocate
Allocate a percent of your net worth for each asset class. Conventional wisdom says to allocate less to asset classes with higher risk. This suggests in 2020 to keep crypto exposure small. Never buy more to exceed your allocation. You can revise your allocations occasionally as circumstances shift.
4e
Within an asset class, allocate to specific assets. For example, for cryptocurrencies, which altcoins in which proportions? Consuft me for details when you’re ready.
4f
Investing vs Trading
Investing is buying and holding. Trading is speculating on short-term volatility. Trading is attractive because it has potential for quick, massive gains. Trading is emotionally stressful, addictive, greed-promoting and potentially devastating. Historically, most traders have experienced terrible failures and stress. Within the crypto market, the most successful people are the ones who invested and held their cryptos for a long time, ignoring, as much as possible, the volatile fluctuations. Crypto holders who have avoided looking at the prices for longer periods of time have experienced less stress.