As an experienced cryptocurrency investor, I will share some of my insights, hoping to help you.
Although I have been investing in virtual currencies for such a long time and have made some money, overall, I have indeed made a profit. However, facing my various painful operations, I can't help but feel a chill in my heart; if luck is not on my side, I will definitely lose a lot.
First, the core of making money depends on your level of understanding.
This saying is actually universal; in every industry, if you reach the top level, you can make big money, and the cryptocurrency market is no exception.
With so many people flocking in, it is nothing but the explosive potential of blockchain that attracts them. Running against the wind is hard and thankless; standing at the windward side, you can just go.
In last year's bullish market, most of the people I saw making money were those with strong learning abilities. Nowadays, making money in the cryptocurrency market is no longer as easy-going as people think; on the contrary, the pace is much faster than in general industries.
Currently, the entire industry is still in a very early stage, and much knowledge and concepts are completely new and uncertain, rapidly iterating. As long as you study hard and communicate with others, there are still plenty of opportunities to become a big player.
To put it mildly, if you carefully read and understand the Bitcoin white paper, your theoretical level can at least surpass most people in the field.
Yes, it’s that exaggerated.
Second, the simplest way is to invest spare money regularly.
After all, those who go all-in on blockchain are just a minority; most people have their main jobs, and their funds and energy are limited.
Investing spare money is not a correct cliché but a truth from those who have been there.
Trading cryptocurrencies is like trading stocks; mindset is very important. If you lose a little and can't sleep well, then you have definitely invested too much, and an imbalanced mindset will harm your investment decisions.
Whether you are a long-term or short-term investor, never touch your life-saving money or even borrow money to trade cryptocurrencies. You will find that when you want to use the money or cash out, you are often in a state of cutting losses.
Therefore, the most suitable investment method for beginners is to invest spare money regularly, setting a fixed frequency and amount for purchases, such as buying some mainstream coins every Sunday at noon according to a certain proportion. This way, you don’t need to worry about it, saving time and effort, allowing time to help you earn industry dividends.
Third, conduct due diligence on selected coins.
When doing long-term investments, you must conduct thorough due diligence. Many projects require KYC verification during fundraising, which stands for 'Know Your Customer'; conversely, we also need to research the business logic, technical advantages, team background, etc., of a coin before buying it to see if it is reliable and worth investing.
In addition to looking at the white paper and some information on the official website, many tools should be used: for domestic projects, you can use tools like Qichacha and Tianyancha to find much information about companies and teams, focusing on the founder's past experiences and achievements. If they have run projects or developed products, you must experience them; for overseas, mainly channels like LinkedIn, Reddit, Twitter, Telegram, Medium, etc.
It is important to know that traditional VC circles would love to live in the founder's house to dig deep. If you want to make a heavy bet on a coin, spending time to understand it deeply is essential.
Fourth, set profit targets and strictly implement them.
This is easy to say but difficult to execute because human nature is hard to change. However, precisely because most people cannot do it, you can, which allows you to become one of the few who make money.
Many people can buy but cannot sell, leading to short-term trading becoming long-term holding, and long-term holding becoming inheritance. The reason is that they have not set clear profit-taking and stop-loss points for themselves, or they have set points but did not take corresponding actions after triggering them.
If you have done your due diligence and confirmed that it is a potential value coin, you can set a slightly higher profit-taking point, depending on your expectations and the current market value of the coin. When the time comes, decisively sell in batches according to your strategy; stop-loss should also be decisive. Think about it: if you started a company and needed money, would you sell from the profitable department or the loss-making department?
Once you get off the bus, don’t easily get back on. Many people hoard coins and develop feelings for them, turning hoarding into sentiment, repeatedly staring at purchases, which is actually irrational.
Fifth, without a certain level and time, avoid short-term trading.
It's not that short-term trading cannot be done, but in the current special circumstances, it is not advisable for beginners to touch it. Because the cryptocurrency market currently lacks regulation, and the tactics of market makers, such as false advertising, insider trading, and price manipulation, are blatant and unchecked. The information you can access, don't think that others can't see it; on the contrary, most of it is what the market makers want you to know; otherwise, how would they operate the market?
In such a situation of information asymmetry, if you are still very confident and want to take a shot, it is not completely impossible, but pay attention to the proportion of your investment, generally not exceeding 20% of your total funds for buying coins.
However, if you don’t understand the project well, or you lack technical expertise and can’t even tell when the market makers are washing out or selling off, I sincerely advise you not to go and give away money.
The above are my five personal suggestions for reference. In fact, overall, the current cryptocurrency market is very restless, and only a few people can execute against human nature and make patient investments; they are the ones who have the opportunity to profit. There is no field in the world where you can make money by lying still and not thinking; the cryptocurrency market is no exception.
