Crypto - 3 tips for how not to get your hands burnt to a crisp
As many others in this spiraling sh*tstorm of chaos, I feel the need to hopefully help people avoid nasty surprises.
Here is a short intro about me (proceed below if you are here only for the tips).
I had been hearing about Bitcoin for at least 5 years now, as my friends and colleagues are quite tech-savvy. Back in autumn of 2016 I was in California in the BoostVC accelerator, where I heard Tim Draper (a VC worth $1B+) had bought into Bitcoin. And now a guy from the town over made a small fortune at the end of last year.
So the naive, impatient fool that I am, I dipped my toe in as well, investing a little over 1K euro at -5% the peak at the end of December. 75% BTC, 10% ETH and 15% LTC.
As you can imagine, for the past weeks I have been sh*ttin bricks, seeing my portfolio do the limbo under every "worst expectation" I have.
To cut a long story short, here are the lessons everyone should know, that I didn't properly consider when I rushed in.
TIP #1
KEEP CASH RESERVES IN YOUR PORTFOLIO
For your own safety and for buying into dips - they always come, don't kid yourself. Don't think "oh, but if I invest the extra 20% I could make even more" - fortune favors the prepared mind, so don't be a greedy fool like me.
TIP #2
PLACE LIMIT ORDERS
A limit order will make sure that you sell before the price drops too hard and don't become a victim of the harsh mistress that is the sea of crypto.
Hedge funds and institutional investors do this as a rule, so learn from the best and make sure not to succumb to nasty surprises.
TIP #3
FOLLOW THE NEWS
You might say "I am in this for the long game" - that is fine, but you still want to follow the news and preferably the key Twitter accounts that determine the future of your portfolio. Being literate in what is going on will help you evaluate when the risks might be too big for you to stay in the game.
Of course, experienced investors know all of this, but I found as an amateur it is easy to loose your caution in the excitement that comes with crypto investment.
Hope this helps - happy trading!