The Crypto Market: When You Should Sell & When You Should Buy More (Principal) |


MY Coinbase is Red...What do I do? | - Thumbnail

"My crypto portfolio is down...What do I do?" 

Investing in crypto markets requires discipline and patience. Through my near 10 year foray into crypto, I've experienced and tried all of the methods out there. In the very beginning when all of the Crypto Noobs were swarming into the building like cockroaches, all of the so-called "gurus" would tell you "invest what you can afford to lose." There would be others who were self-proclaimed "maximalists" who had hands of steel: "hodl or die!" I am here to tell you that they are indeed true, but investing in Crypto can be simplified further for the beginners and high rollers. Here are my opinions.

Crypto Trading/Investing for Beginners:

Should beginners trade crypto? 

In my opinion, it is a no. Here is why. Sure you can choose whichever asset type to trade with. Nothing builds more education than experience, so why not start with trading Crypto? The problem is the market cycles for crypto are abrupt — for 3 months you might have a bullish market, and then in a single night the market turns red at the split of a dime. As many experienced traders know, discipline is one of the main tenets of being a successful trader. You not only need to know the technical skill to execute trades by looking for patterns, but you need to have a firm resolve on when to entry-in and when to exit-out. Not only that, but you have to destroy that urge to FOMO in. Be content and disciplined with the decision you have made. Don't worry about all of the other traders who have told you "why did you exit so early? I took a 100% gain on mine!" When you start out, you will be told everything AND the kitchen sink. More experienced traders will tell you "hey you need to do this, you need to do that." But what they don't tell you is that they have their own methods, risk-tolerance, and preferred trading patterns. 

Should beginners invest in crypto?

Yes and No. Why you ask? It's because the tenet still holds true: "You have to be willing to invest what you can afford to lose." The other tenet also holds true: "If you hodl and dollar-cost average when the chips are down, you will eventually come up in the long-run." 

In my personal opinion, both of those tenets hold merit. I have been there when I bought Bitcoin at $137 and then subsequently sold at $700, then FOMOed back in when it was up to $15,000. I've made all the mistakes that you can make in this game. I have seen Bitcoin soar to as high as $25,000 and then flutter down to $3,000 at one point. I missed that boat to buy-in at the time. I have also profited when Bitcoin went as high as $60,000 and sold half of my portfolio to preserve some of the gains. 

What should beginners do?

In my opinion, for beginners who do not know what they are getting themselves into, start with lesser risk; high cap stocks first and then develop your own trading and investing philosophy. Then learn, learn, and learn some more. If you do decide to start with Crypto investing or trading first, stick to a plan and stay firm on it. Ride or die like Bonnie and Clyde. 

If you are a beginning investor with low initial capital, keep dollar-cost averaging into the higher cap; largely known tokens with lots of use cases or potential, and keep buying the dips. Build your portfolio and you will then have the option to sell half at a large profit when your portfolio gets big enough.

If you are a beginning trader with low initial capital, try to either learn how to trade less-liquid, low-cap tokens with huge potential on a technical or fundamental level and grow your principal; You need a mentor for high frequency crypto trading.

What If I Am a High Roller?

This means you are a whale according to Crypto jargon. This means you have a large principal balance with large trading sizes and ample cash to cover any losses or buy opportunities. This also means you are quite savvy at the exotic trading options or derivatives in many exchanges. 

If you are a high roller you already know what to do. You are experienced and know what to expect from the markets, specifically crypto. 

If you are predominantly an investor, you know how to allocate your portfolio to minimize losses and even 2% of your overall portfolio can be a baby whale's entire portfolio balance. Even 2% of a portfolio allocated to a small cap token can generate significant gains for the high roller. 

If you are predominantly a trader, you know how to entry-in, and when to exit-out. If you prefer stop-losses you will be disciplined with them and never FOMO back into something. You never look back on your decisions. You already have a bulletproof and ever-evolving trading system., whether based on technical or fundamental analysis. You're all good in the neighborhood. 

Do You Have What It Takes?

Such a cliché yet appropriate phraseology for this type of topic. When you enter into Crypto markets, you have to be prepared for the onslaught of exchanges out there: some shady, some regulated, some exceedingly encroaching. You need to be prepared for the different takes from different people. You also need to be prepared for Crypto Twitter toxicity. You will hear everybody giving you their two cents and oftentimes these people are successful. However, based on your personality-type; et. al, you might actually be doing more harm than good by embracing all of their opinions at the same time. 

Take this as advice from someone who has seen it all in the Crypto Markets, and tried them all. Be true to who you are, but do evolve and grow from your learning triumphs and failures. I wish you well! 

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