500 Bitcoins Investment Philosophy - How I Make Money Trading Altcoins
In this video, we take a look at the reasoning behind the choice of the name 500 bitcoins for this channel.
It's not because of my wallet balance, it's because I believe in applying the same principles that made 500 Startups so successful to Altcoin trading.
As you will see from the video and the SlideShare that 500 Startups added (link), the idea is quite simple. You don't want to be putting all of your eggs in one basket, and more than that, the more baskets you have, the more chances you have of catching the 50x returns.
It's easy to apply the same principles to Altcoin trading, and I apply the following three principles in my trading strategy:
Invest a Fixed Amount
By investing the same amount into each of the coins you're trading, it balances the risk across your portfolio and makes sure that when you lose, it's not a large chunk of your stack but when you win, it's big enough to grow your entire stack. Now don't get me wrong, I do have large stacks of more stable coins that I plan to hold for a much longer term, but to me, these are more like the bonds of the Crypto world. Steady growers that I feel secure investing in. For my day trading, I like to put the same amount into each of the riskier coins.
Invest Broadly
I see a lot of people that try and hop from one coin to another, putting their whole stack or close thereto into it, trying to ride a wave and then jumping to the next time. This is a much higher risk and in the long run, seems inevitable to lead to trouble. I prefer to invest in a number of different coins, spreading the risk around. Whilst this also lowers the overall returns, with the volatility in the Cryptomarket you can still see some great returns on your overall stack.
Keep Calm and HODL
I hear about a lot of people that put 5% or 10% or maybe 20% stop losses on their coins. Whilst this strategy might work for some people, I tend to just hold my coins no matter what. If I count on the fact that a number of my picks are going to result in no return at all, focusing instead on maximising gains on the winning coins, then I can afford to see some of the coins go down in value and essentially write them off. The thing with Crypto though is, it's extremely cyclical. In all likelihood, given time (sometimes a matter of days), that losing coin will come back around and maybe even reach a new ATH. Don't overtrade, just keep calm and HODL.
That's it for now guys. If you need to buy some BTC, ETH or LTC, use this link to get an additional $10 with a purchase of $100 or more at Coinbase:
https://www.coinbase.com/join/593e4f73a0c14ef414387608
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