Trading crypto was tough for me at first…
Fear of missing out was a huge problem for me. I was one of many who bought my first Bitcoin during the epic downtrend of early 2018. I eagerly pumped money into a few altcoin projects that don’t even exist today because I thought they were cool ideas.
Needless to say, I’ve learned a lot since the early days. Here’s how I learned to protect myself, from myself.
Sleep on it. You’re probably dreaming anyway.
I couldn’t contain myself in the beginning. I was excited about technology I didn’t fully understand, frantically researching project after project and letting my mind run wild with dreams of Lambos and private islands.
I exchanged lots of Bitcoin for “promising” projects that turned out to be honest failures or exit scams. In hindsight, I should have just held on to that Bitcoin.
Give yourself a minimum of three full days to think about any cryptocurrency investment. It works like a charm. You’ll find the excitement usually wears off before the three days is over, making your decision a simple one.
But what if the price goes up?
It probably will go up. Then sharply down, back up and then down again in a nauseating rollercoaster of volatility. That’s what cryptocurrencies do right now. Welcome to trading crypto, friend!
The concept of missing a good entry point used to stress me out quite a bit and lead me to making some pretty terrible buying decisions. Nothing good has ever come from my emotional trading.
Sleeping on buying (and sometimes selling) decisions has allowed me to make some really well timed trades, while allowing me to do more research on the project and gain a better understanding of what the market is doing.
Learn the technology before trading crypto
I’d be very interested to see how many cryptocurrency owners actually understand the technology behind their investments. Learn what makes blockchain special in comparison to traditional ledger systems. Look into the potential for smart contracts to change everything from gaming to real estate. Look for some real products in use.
There are a lot of flash in the pan projects out there, but some great ideas are starting to take shape among them. The ability to recognize an undervalued project comes from a deep understanding of the technology behind these projects.
It’s extremely difficult to talk yourself out of a “sure thing” in crypto, but you can usually save yourself some pain by walking away from the decision for a few days. Sometimes the best action is no action.