There are many ways to make money in this crazy crypto space. Seems like the magic internet money just keeps flowing. With yield farming, airdrops, staking rewards, and all the other ways to earn in this space, you can quickly find that you are making a decent income and building your stacks pretty quick.
But in my experience, money easily made is money easily lost. As quickly as these things can pump up in price, they can dump just as fast. And with all the new projects and developments coming out, it is easy to chasing all the new and shiny things out there and lose focus on what’s really important. Being someone that has been through all of that at this point, I wanted to share some rules that I have learned to live by in my crypto investing journey.
You Can’t Lose Money Taking Profits
Ever since the early days, the crypto community has lived by this die hard ‘HODL’ mentality. Hold your coins no matter what the price. Well, as that can be a great long term strategy for some, it’s not always the best plan for everyone. As one can just as quickly watch their portfolio rise, we get to the point of euphoria where you don’t think it is ever going to stop and you never sell. Then the markets recorrect and you find your portfolio basically back to where it was before the pump.
This is where you need to learn some portfolio management and take some profits off the table. Learning to read trends can really help on this journey. Learning when markets become overheated or over sold is a great way to find some profit taking room. Don’t be ashamed to sell and take profits near the top. There is this stigma that you are weak if you sell, well, that is not the case. You are being smart and securing the value of your portfolio.
This is not to say that you need to sell your entire bag. But allocate a portion to your HODL assets, or as some say, keep a moon bag, and then at certain points in the market cycles, look for some profit taking areas. This helps you find balance and continue to grow your portfolio in the long run. If you play it right, you will be able to buy back at a lower price, then rinse and repeat… This leads me to my next rule…
Play Trend Cycles Carefully
Anytime the crypto markets start to rise there is always a new particular type of asset that will shine above others. Take the memecoin cycle with DOGE and SHIB running amuck while the rest of the market was lagging behind. It can be fun to catch these trains, and if played right, can be extremely profitable, but you have to be very careful.
More recently we have seen the rise of the NFTs. This sector has created a stir that cannot be ignored at this point. But as with any asset, especially these new, very volatile assets, there are some crazy ups and crazy downs. When times are looking great, think about taking profits, or move into a more stable asset like Bitcoin. Do not for a second think that a small asset pump is not going to recorrect, and recorrect HARD. Make sure you are watching the cycles and playing them appropriately.
When things are going hard and looking to be too good to be true, they probably are. This is when you need to take profit, not go in harder, or start chasing pumps… This leads me to my next rule…
Resist the FOMO – Also Known As The Fear Of Missing Out
There is always that temptation to buy into token or coin when it is pumping and you are watching all these sock puppet account claim they are making crazy money with XYZ token. You need to show strength and resist buying into a hard pump. This is where things can get dangerous. If it looks like for a second you have missed the pump boat, you probably have.
So instead of trying some kind of movie stunt and trying to make a massive leap for the boat, only to fall into the water, just wait on the boat to come back, because if you are patient and wait, they always come back.
Even if they don’t come back to where you would like to buy in, there will always be another opportunity around the corner if you keep your eyes open. The resistance of the FOMO is one of the hardest things to overcome in the crypto game, at least from my experience. It takes time and discipline to overcome the urges to jump into when the boat is at the top. But you have to overcome that urge. If you want the asset bad enough, wait for the recorrection and then make your move!
It’s Not Going To Be Like The Last Cycle
The world of technical analysis is a world of gathering data and attempting to find patterns in that data to predict the future movements of the market. Many live by the charts and have a hard time looking outside of the lines, candles, and patterns. Many want to tell you that based on the past cycles, Bitcoin or XYZ asset is going to do this or that. Well you cannot always gauge your bets on that.
Many of the so called ‘experts’ and ‘influencers’ were telling you that Bitcoin was going to go to $100k plus, some were saying even over $250K before the end of 2021… Well… You can obviously see how that went. Topped out at $69k and has been wavering ever since. These so called analysts were saying at first it was following the 2017 run, then they switched and said it looked more like the 2013 run so this is going to happen, and then… They were ALL WRONG, lol. It looked like the 2021 bull run, lol. Every cycle is going to be different so you just have to take the data as it comes and make your smartest moves accordingly.
So you can’t always base your bets on other people’s data. You have to learn how to read the charts, and not only that, look at the fundamentals This means paying attention to global economic issues and seeing which way the traditional markets are going. This way you are hedging your bets and making your moves based on the data we have and not emotions based on what you think may happen based on the past. History doesn’t always repeat itself. Times are much different than they were in previous cycles, so we cannot base our moves on that. We don’t have any real control over anything but our own moves, so be smart, play smart, then go outside. Which leads us to our last rule…
Get A Life – Enjoy The World Around You
Really, you can’t spend all of your time in the crypto markets. You need to get a life outside of the space. If all you do is play around in these markets, you will learn allot of awesome things, but at the same time you can be missing out on allot of awesome life experiences.
With these markets going 24 hours a day it can be easy to get caught up in the madness and forget what time or what day it is in some cases. Trust me, been there, done that. The part of my journey that I had to figure out is what am I doing all of this for in the first place. Well for me it’s freedom and time. The more I can make in crypto, either actively or passively, gives me more financial freedom, and more time to do the things I want to do.
The best thing about this industry is that most of the things you need to do can be done from your phone. So go out and enjoy yourself, check your charts by a river or sitting at the beach, and enjoy the one commodity that we all have and lose every second of the day. So make sure you are living a balanced life. Balance is the key to living a healthy, wealthy, and happy lifestyle.
@thelogicaldude, is a tech and cryptocurrency enthusiast with years of experience as a designer, website developer, and technical educator. His crypto journey saw him leave the comfort of a long career with Apple to start his own blockchain based businesses. The Logical Dude is the creator of Coin Logic, Blocktunes, Hivelist, and Hivehustlers.
Nothing we say is financial advise.
This is for educational and recreational purposes only!
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