7 tips for the 2019 Crypto bull season
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#1 Never invest more than you are prepared to lose
Yes, this is still rule #1, crypto is VERY risky, the swings are huge. You need to be (both mentally and financially!) ready to lose it all.
Please do not sell your house, max out a credit card or lend money to invest in a risky asset class like crypto! It is a huge risk that could ruin your financial situation.
#2 Not your keys, not your coins
A common phrase for many in crypto, what this means is that you need to have access to you private keys and NOT leave your coins on exchanges or in wallets that you do not own.
I have a little nuanced view on this, I agree you should not keep your coins on exchanges if you are not trading long term. And that the most secure way to store crypto longterm a hardware wallet + owning your private keys. But for less technical users who do want a diversified crypto portfolio companies that offer secure wallets and portfolio management can be a safe option as well.
One could maybe argue that trusting a company like Coinbase or ICONOMI is safer vs trusting a very non-technical person to manager several wallets and private keys securely…
#3 Have a plan and stick to it
Crypto is a very hectic and emotional ride, 20-50% swings are common and should be expected. Can you handle a drop of 50% in a day? Will you panic, unable to sleep at night?
Before you invest in Bitcoin, Ethereum or crypto make sure you have a plan.
- How much of your coins will you hold no matter what for how long (HOLD portfolio)
- How much of it will you trade at what % of profit or loss?
- How long will you hold you long term investment
The risk you take will be different for everybody but smart investors have a plan and stick to it. This is hard to do, especially when prices move up and down quickly.
#4 Consider ‘Dollar Cost Averaging’ to buy your crypto
When do you buy? What is a good time? I will let you know a secret: NOBODY KNOWS!
Sure, you could get lucky and buy just at the right time, but a better way is to plan you crypto investment. Buy a little, the same amount in EURO or USD every day/week/month. This will give you a way to neutralize short-term volatility in the broader market.
#5 Take profit on the way UP
Taking profit should be in your plan of tip #3 but it needs to be repeated. Make sure you take profits when the market goes up. Have a plan for this.
Some suggestions could be:
- Sell a fixed % every day/week/month
- Sell a fixed amount in EURO or USD every day/week/month
- Sell 20% of your holdings when you made 20% profit, another 20% of your holdings when 50% profit, etc
- Sell any profit you make every month, keep your initial investment
#6 Trust NOBODY
Crypto is a new, unregulated and exciting place. But this brings with it a lot of criminals and scammers. Many are trying to get your private keys, offer you deals or try to scam you into investing into their project.
Do not trust anybody! Check everything three times. Is something seems too good to be true, i most likely is!
#7 Diversify your investment
Some Bitcoin maximalists will disagree, but just like in the traditional stock market, diversification is a good thing.
How much risk do you want to take, considering crypto is very risky as it is, only investing in new, low market cap Alt Coins (ALTS) might not be the smartest investment.
Think about your risk / reward strategy and diversify accordingly.
A relatively low risk portfolio could be:
- Bitcoin (BTC) 70%
- Ethereum (ETH) 20%
- XRP (XRP) 2%
- Litecoin (LTC) 2%
- EOS (EOS) 2%
- Binance Coin (BNB) 2%
- Cardano (ADA) 2%
A more aggressive high risk portfolio is my portfolio CARUS-AR
- Bitcoin (BTC) 15%
- Ethereum 13%
- Cosmos (ATOM) 10%
- Numeraire (NMR) 5%
- KyberNetwork (KNC) 4%
- Waves (WAVES) 4%
- Polymath (POLY) 4%
- Icon (ICX) 4%
- Quantstamp (QSP) 4%
- Cardano (ADA) 4%
- Loom Network (LOOM) 4%
- Tierion (TNT) 4%
- Golem (GNT) 3%
- Loopring (LRC) 3%
- Wanchain (WAN) 3%
- Request (REQ) 2%
- NEO (NEO) 2%
- Qtum (QTUM) 2%
- Power Ledger (POWR) 2%
- EOS (EOS) 2%
- Binance Coin (BNB) 2%
- 0x (ZRX) 2%
- OmiseGO (OMG) 2%