Investing In Crypto – 5 Proven Steps Before You Start

If you are one of those lucky ones who didn’t FOMO’ed-in the last bull run of December 2017, this is a great time for investing in crypto.

December bull run of 2017 was one in a lifetime opportunity and some crazy gains were seen even in some useless coins. Many HODLERS today invested in middle of December when crypto mania was at a peak and they thought these crazy gains will continue to grow but “What goes up in crypto must come down and vice-versa”.

Social media is a crazy place, when every crypto coin was at the ATH, the most common thing seen on Reddit was how it’s a perfect opportunity to buy when actually it was the time when whales started dumping.

So, how do you know what’s right and what’s wrong in crypto?

Understand the market sentiment for example. When the majority of people are over to the same thing, surely money is flowing somewhere else. 95% of people follow the trend while 5% are done making money with it.

Today, we will discuss 5 steps before you start investing in crypto that will assure sure survival:

Prefer a Coin with Real Use Case

Majority of altcoins gave crazy returns last year, even the ones without an actual use case. But 2018 has turned out to be a long bear market and investing in any random coin will probably get you destroyed.

Crypto Real Use Case
Crypto Real Use Case

Try to find a coin which has a real-world use case and not just some new company creating a coin because blockchain is the new trend.

There are coins available for every industry out there but do these industries really need blockchain?

Prefer an exchange with stop loss functionality

What is stop loss you may ask, well there are tons of videos out there explaining stop-loss but in short ” It helps you sell your shares/coins automatically when a price goes below a certain value to help you STOP LOSS”

Learn to use Stop-loss
Learn to use Stop-loss

Binance, Okex, and Bittrex are some of the exchanges which offer stop-loss functionality. Many of the investors who are down are either because they didn’t put stop loss or don’t know how to use it which btw is very easy. Learn the basic market features like stop-loss, market order etc before investing in crypto.

Stick to a Crypto strategy

You have entered a trade at price A and you have set your target to sell it at Price B. The trade reaches the Price B fairly fast, will you sell it or will you become greedy thinking it has the chances to go higher?

Choose a Crypto Strategy
Choose a Crypto Strategy

Many of the newbie investors fall into the latter category, greed comes over and the price you thought you will sell at keeps dropping and finally, it goes out of your hands.

An important step to do is to sell your 50% of the portfolio when you are in 100% profit and take your initial investment out.

Many of us didn’t sell at the desired price and hence we are holding some of those bags with us today.

Remove Emotion Before Investing in Crypto

Some of the examples:

If you let emotions drive your decisions in a crypto then you will soon have nothing left.

Emotion Will Kill Your Investment
Emotion Will Kill Your Investment
  • FOMO’ing in on coins while they are making crazy gains
  • Not selling, waiting for your desired price
  • Buying coins just because you like them for a reason
  • Not taking profits due to greed

Always take decisions based on facts and trading analysis because even if you miss few crazy returns, you won’t be 90% down like majority of the newbies today.

State Of Market

Well, this can be one of the most important but overlooked step in investing.  We all are into investing because we want to make money but it’s important that we understand the state of the market before we put in our hard earned money. A good thing to analyze is the bitcoin price trend.

Learn The State of Market
Learn The State of Market

We hear stories about how people lost everything in investing or share market but nobody tells the reason their investment performed badly.

There are 2 states of market – BEAR market & BULL market.

If you are investing in crypto in the middle of a bear market then you must be aware of the fact that the value of the coins will be going down eventually and vice-versa and you must know how to adjust your strategy accordingly.

There are many ways to know the state of the market, like you can join discussion groups on social media like Reddit, Twitter, Facebook etc. or you can follow the market experts but take everything people say with a grain of salt because, in the end, it’s you who has to take the final decision.

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