Getting Stuck On The Wrong Coins.
Early on in the game, I came upon a realization:
I should not get emotionally attached to certain coins because that can cause a downfall.
Not all coins are equal. Actually, none of them are. At the time of this writing, about 90% of the new coins aren’t going to make it in the long run and will disappear. A new wave of coins is expected to come and stand more long-term. That’s because bigger companies such as Amazon are coming up with their own coins to participate in the block chain.
Because of that, we have to be careful what we’re putting our money in for the long term. Sure, it’s fun to gamble a little. We can keep our money in new coins and have potentially huge gains, but it’s really a big risk.
Greed Is A Silent Killer.
We need to be careful not to get too greedy and pull out at the right time. How do we do this?
When looking into a new coin and researching the team behind it first, we should look at the historical chart and see the long-term trends. Only then can we go deeper to see what’s happening in the smaller time frames.
It’s totally OK to make 5 or 10% profit and then go out. If we keep focusing consistently on smaller gains like this, we will take less risk, have more peace of mind and be more successful in the long run.
Hype Is Contagious.
A lot of people invest in a new, unknown coin because there is hype about it on social media. Sometimes this is done on purpose as a pump-and-dump scheme. Sometimes there is no reason for it, and it becomes a trend. We should never invest based only on such assumptions. Always do your own research! I learned this because I made this mistake too many times.
We can also buy a coin at simply the wrong time, when the market for that coin is at its peak already and will be followed by a downward trend. In my Previous Article, I wrote about how to identify this scenario and avoid making that mistake.
The Three Main Coins.
Bitcoin, Ethereum and Litecoin are generally very safe coins to invest in for the long term. You should always have at least 25% or more of your portfolio in these coins because they are here to stay. Historically speaking, these currencies are the most likely increase in value over time. They are the most solid long-term investments.
Invest Only What You’re Ready To Lose.
Crypto-trading is incredibly rewarding and a lot of fun too, but don’t invest what you can’t afford to lose. I’ve read too many stories of people who went into crypto by taking out loans or maxing out their credit cards, and because of mistakes they made, they lost a lot and got into serious debt issues.
If you have nothing to invest, then wait. Save some money and start out with a small amount. Over time, make it grow.
What’s Next?
Tomorrow, I want to share what I learned about “diversity” and the mindset behind it. We’ll look at how to use diversity in investing and storing crypto-currencies. Thinking in terms of diversity, we can be more successful and safer in the long run.
All the best my Crypto and SteemIt Friends,
Cryptoist