Some lessons get learned the hard way; here's a few I've learned since starting with crypto

I did a bit of a write up on my experiences and lessons learned while trading crypto... it might have a place in here or maybe just as a starting point since we keep seeing some of the same questions pop up. It's meant as a discussion prompt or maybe even food for thought. Definitely not financial advice though. A few hard rules that come to mind as we even start the discussion: #1 Invest only what you can afford to lose. #2 Diversification in moderation is good #3 DYOR – but… how? #4 Hold- time in market vs timing market, etc #5 Planning beats pantsing – DCA is king #6 Personal health beats chasing personal wealth 1 Invest only what you can afford to lose means just that. If you’re borrowing to buy crytpo, take a step back. If your money for bills or groceries winds up in Shibu or Floki or, worse, Squid, take a step back. We all want to make gains but do it with intent and do it only with money that if you lost it tomorrow won’t have you on the streets. 2 diversification is good in moderation, as in all things. Spread too thin and you never get great gains. Focus too much on just one and bad luck can wipe out your investment. 3 Many here will be hesitant to give advice because only a financial advisor is qualified to do that. We can discuss strategies and our thoughts, but financial advice ain’t here. What do you see often is DYOR or, Do Your Own Research. What does that even look like? Here’s what it looked like for me. No one else is investing your money, no one else will take the blame. 3a I can tell you what I personally did as someone fairly new (a little bit over a year ago). I looked at the last round of bull/bear/bull cycle and saw which projects are still around now. I also started looking at white papers for a few of the ones that I really liked. Personally, I like where Eth is going and am growing my bag of Vet and One because I like what they have to offer and where I see them going. 3b But, my plan is a longer term one than the meme coin 10x over a week. I don't plan on cashing out till next cycle so I know I'll be building for a while. That's my strategy, personally. I also take full advantage of staking where possible because 1) it reduces temptation to sell if it's staked and 2) free coins are nice. 10% apr on my ONE right now is hard to pass up. This is why hold time in the market beats timing the market. It allows accumulation and if you know you’re holding a while, you’re less caught up with the charts on a daily basis The 'do your own research' part is one of the big struggles with crypto when getting started because it can be overwhelming. DYOR list? I'd say look at DYOR 1) prior performance in earlier cycles DYOR 2) growth this cycle. No growth means the coin/token isn't expanding might lack utility, too much growth is hard to sustain DYOR 3) see what partnerships / utility you can find. For example, Vet with supply chain solutions or One with bridging or Eth with smart contacts. DYOR 4) check out the subs. Most coins have a subreddit here with lists of pros/cons/partnerships etc. A hostile cult like sub is a bad sign. An informative, useful sub is a good sign DYOR 5) read the white papers. This are the research documents put out by the coin/token creator that explain what need they wanted to address, how they're going about it, where they're looking to do business, that sort of thing. They can be technical but there are usually some 'crypto for dummies' sections where they simplify it. Many of us, or at least, I did, started investing in crypto looking at it like a carnival token where if you were lucky you traded it in for gains but most the time it just cost ya money. It was kinda fun to acquire and you hoped you got lucky. Reading the White Papers helps change it from an arcade token to realizing that the tech is the game changer and the coin is a subsidiary to the technology. That’s what you’re investing in. It gives ammo back for the naysayers who see Squid rugbull or meme coins exploding. You’re investing in projects you believe in not for a pump and dump, but because the techs are changing things and helping improve something. Seriously gives you holding power through a volatile swing if you know what you’re investing in. DYOR 6) avoid youtube til after you've done some research on your own. It's easy to fall down a rabbit hole o 'this bend 100000x in a week' or 'pick this coin cause of pseudo-technicals.' If your armed with info beforehand, you can X out of shill videos easily. If you’re not sure what a Prisoner Of War has to do with Piece of Shit and why those matter to crypto…. Avoid any youtube beyond ‘Crypto for dummies.’ DYOR 7) finally.... have a plan. If you're plan is throw money at the cheapest meme alt and pray it moons, well, that's a plan, but be prepared and temper expectations. If you're plan is 200$ into Eth and maybe 5$ a paycheck the next year, that's a plan. If makes it easier to stick with it and ignore price fluctuations. More on this in a moment. 4) Hold time means your coins trend up, very generally speaking. Zoom out, what do you see? There are cycles; bear cycles are where we watch profits drop. But… bear cycles are where we see bags explode. Then you wait. You hold your coins or tokens and sell them when they’re green. Crypto is here to stay and as adoption approaches or starts becoming mass, that rising tide is going to lift a LOT of coins. The day to day fluctuations can suck to watch, but if you know that you’re not selling for a year or three or five or you’re going to retire thanks to crypto, a 10% drop on your biggest bag just means you hopefully left some powder ready. You can try and time the market and read all the technical analysis you would like. Some folks get lucky. Remember though, crypto is a global … thing. Whether FUD from China, semi-fud or adoption from India, full creepy uncle embrace from Singapore, regulation from the US, major banks or exchanges listing coins, movie theaters taking crypto, celebrity egos, celebrity endorsements, celebrity sex tapes, paypal getting in on it… there is a LOT more connectivity to the crypto world and the number of variables is huge. Which is why #5 is big. 5) Have a plan with your crypto; don’t be a punster. (planning vs flying by the seat of your pants). You'll see the term DCA a bit. That's dollar cost averaging. My version of it is I send a set amount to my crypto wallet every paycheck and spend the same number of dollars on my base 4 coins every 2 weeks. That way, I’m not trying to game the system, instead, I let time work for me. Sometimes my 10$ gets me more coins and sometimes my 10$ gets less. But by averaging the cost of my coins, I thread the needle between the fluctuations and am net green. It's great for a long-term plan and means that wide swings don’t affect me as much because I know I’ll get some coins at the lower value and hold on long enough to turn that into cash. With that, is flexibility. I leave a little bit of those deposits as fiat / cash / liquid, in the exchange so a very tasty dip can be taken advantage of. You don’t want to be too rigid and miss out completely because you had no flexibility. Plan for it and it removes a bit of the stress. Plan in but ALSO, plan out. Not telling you how to plan or what it should look like. Personally, I have a few approaches going on. My big 3 are ones I’m holding at least for another 3 years and so will DCA through that time. My approach to something like a meme coin, not gonna lie, I threw 100$ at Shibu way back when. It turned into a LOT more in the last month or two. I took my initial investment out, cashed out what the fees were, and the rest was all house money and profits. So I took half of my profits then and 1) paid off some debt and 2) invested back in my longer term bags. It removed some stress from being so worried about what the price was doing, relieved some debt stress, and nicely expanded the bags that I’m watching on the 3-5 year cycle. Select some price points and know when you’ll move stuff. I also never cash out everything cause you never know. Even with my Shibu, I left half of it in cause you never know. Also, something like Kucoin, which tracks your investments/purchases/mining rewards/ staking rewards, etc, helps to keep track. Great for tax info but also great for tracking your average cost and your gains. Helps to keep to a plan, like seeing it was worth keeping some of my cash in Shibu after I took my initial investment and some profits out. Now, whatever it does, is house money so I can watch it with… not disinterest, but not too closely. Which leads to number 6. 6) Personal health beats chasing personal wealth. Seriously. This can be a lot of things. If you’re following the rest of the (NOT) advice, you’re probably not checking the charts every few minutes because you have a plan and you’ve done research and it’s money you can afford to lose. In theory. I still check too often. We’re all hoping for gains. But gains won’t matter if you give yourself a heart attack. Fresh air is good for you sometimes. Watching a few % swing on the chart and trying to correlate it to your favorite alt and watching with bated breath for it to drop or moon is gonna keep you distracted from life. It can easily turn over into a gambling addiction. Temper it with research. You start watching the charts more than once an hour? Pull up the white paper on the biggest gainer for the day. It doesn’t have one? Well then, not a coin to invest in, pull up the white paper on your biggest bag to remind yourself why a 3 year plan isn’t going to be affected by a daily dildo. Look away from the charts, zoom out, close the charts, read a book, cook a meal, find a tv show, read up blockchain, etc. Having a plan and sticking to it will help you weather the swings and check those charts a little less frequently. Ok... not financial advice and a bit of a lengthy rant, but I hope that, especially if you’re new, it helps a little. Also, none of us know anything, so you’re best off making your own decisions as it is. -To many green dildos and at least a few lambos submitted by /u/raresanevoice [link] [comments]