Firstly, I need to let you know that anyone can have these kinds of results in the crypto world, either they get lucky or they did the research, and no, not everyone needs to mine their coins. When I first got into bitcoin, I had to buy my coins of some guy on eBay, and then I started to mine a little.
I am just a trader who recently got back into crypto and opened up a few accounts, transferred $500 into bitcoin then traded it up to over $100,000. I must admit, there is a lot of places to get hot tips from for anyone who is willing to pay attention to coin news, new coins, charts, and price action. It seems like there is endless news in the market about the latest coin project which is going to dominate bitcoin.
You can find out what could be the hottest new coin and jump in early. You can track crypto news and see how the market reacts to bad or good news. If you are just starting, you will find out that any bad news can make a major impact on the market. Remember that any bad news is good news if you are putting new capital into the market, or you can learn to read charts and price action, which is what I love doing.
I have written this guide for anyone who is interested in cryptocurrencies and just wants to get in. Before we start my first recommendation (and most important) is to start with a low amount, say $500 and work your way up. Do not spend more than you can afford to lose, and be careful not to watch those charts all the time, it’s very addictive!
Also please note, I am not giving you financial advice on any project/coin/exchange to invest in, you should take any activity in crypto at your own risk! As they would say in the crypto world ‘DYOR’ – Do Your Own Research.
- The 5% rule
Try and only bet less than 5% of your money on any one idea. The odds of you being wrong more than 20 times, is very low.
- Accept mistakes and realise this is the trait of a winning trader
Find a good exchange
finding a trusted exchange is not easy, many people have their own preferences, good stories and bad. I highly recommend that you look into some of the alternative exchanges like Cryptopia, Poloniex or Bittrex.
In the crypto world, security is #1, always use 2-party authentication.
- Go for the ‘shitcoin’
Your goal should be to get a better leverage and increase your position faster. A lot of new people start with the famous coins and wonder why their position is shrinking. Think about it this way, for Bitcoin, Ripple or Ethereum to double or even triple, it could take months, but have you looked down in to the coins in the 1-5Mcap range? For them to double, triple or go up to 1000x, is a lot easier than any of the coins in the top 10. These low cap coins are referred to shitcoins, and for good reason.
- Buy on the rumours and sell on the news
- You won’t get rich overnight
Building up a decent amount of wealth through crypto-trading can be a slow process & requires some effort. If you are willing to do a bit of research, keep an eye on the market in general, educate yourself on the latest occurrences, technical & non-technical. You can find yourself in a really good nest egg after a few months or even years. Sure does beat the hell out of any interest you would have generated from a bank!
- Always use stop
Put your stops at a point that when reached, will indicate the trade is wrong. Try not to place at a point which has been determined by the maximum amount you’re willing to lose.
- Day trading
This is a bit of a gamble & there’s nothing wrong with it, as long as you know the risks. We have all made some form of profits by timing the market correctly, and as most newbies in crypto will soon find out, we are not always right. I have sold all my holdings in a particular crypto simply because it looks like it is trading downwards, only to find out that it has gone up 200% the next day.
- Hold on to your winners and cut your losers.
Otherwise known as Holding (read the origins here) this is a personal choice and in my biased opinion, it’s the safest bet out there. There has been a decent amount of research that proves that Holding on to your coins actually produces better results than day trading. If you really do believe in crypto, you wouldn’t be inclined to panic sell every time it drops. The entire market is only going to grow over time & the best crypto projects are going to thrive.
Successful traders require courage: the courage to try, to courage to fail, the courage to succeed, and the courage to keep on going when the going gets tough.
This is a no-brainer and it is okay to ask around to find out what others think is the next big coin. I have spent countless hours researching what is the next best coin and below are a few tactics I use. I have a system that works for me, I no longer need to spend countless hours researching the next best thing and I will share a few tactics that I use, whilst not giving away everything I do.
- Find the forks – Works 76% of the time
this is a fairly risky one, but as strange as it sounds, coins can fork. Meaning the project could be split into two and an entirely new coin can be produced. While this concept is a little hard to understand. Essentially it means that an entirely new coin can be made (Bitcoin – Bitcoin Cash – Bitcoin Gold). Finding the fork can go very well is when one project which is very successful creates a sidechain (Neo – Gas) or they split a very successful coin with the same developers (Ripple – Stellar). When doing this, you need to make the right team is working on the project and they have the full support of the community.
- Stability – Works 61% of the time
in the early days I took a look at all the major coins and found out that most of them were around for a certain period of time and then suddenly, BOOM they jump up 1000% or even 10,000%! I used some basic calculations, looked at the average age of the top projects, market cap and performance of each, and found a formula that allowed me to find projects that were of the right age, maturity and have communities that supported a massive jump.
A few good sites: CoinMarketCap – CoinGecko.
- Community – Works 93% of the time
I liken this one a ‘Canary in a Coal Mine.’ There are many places where you can discover more about a project. Before I invest in a project, I will always check their social channels like, BitcoinTalk, Discord, Slack and Telegram. When you look at these channels, take a look at the community, ask a few questions and see how the community feel about the project. I’ll never forget the time I came into a project and was accused of something I had no idea about. Communities are a great place to learn about the health of a project, I do this on every project I invest in.
- In the know – Works 86% of the time
this is probably my go to principal, I no longer I sit up late at night looking for the next best thing. I have found a few very smart people to do this for me, and best of all, they tell me exactly what to do, and most of the time they are spot on. This doesn’t mean you should go out and follow anyone, but if you find that right person on BitcoinTalk or Twitter, see how their predictions work out and you can get a rough gauge on how good they are. Let me tell you, my top 5 crypto projects have come from doing just this.
- Developers – Works 84% of the time
there is no denying it, developers and techies rule the crypto space. I came across this tactic a few months ago and it has produced some very good returns, each time I used it the project has jumped minimum 10x within a month. This is a fairly smart trick I use. Pop over to CoinGeko and filter the coins by the developers rating. You will see projects which have the most active developers, if you find a project with a lot of developer activity, and the market cap is below $5M, a cheeky $100 could do very well. I use this all the time and its great!
- Find the forks – Works 76% of the time
- Buy in the dips
it’s the oldest trick in the book. I know it is impossible to predict any market to a tee, know the right moment you should buy or sell. The times when you least want to think about trading is the losing periods, these are the times when you need to focus most on trading. I recommend for you to buy small amounts every time it dips. Don’t try and perfect the practice and wait at the extreme bottom, I have missed out many times by waiting, and have lost countless hours of sleep trying to get in at the right moment. It is rare that you will be able to perfect entry point.
In this list I have given a lot of ideas and leanings from more than 12 months in crypto. Please remember to take anything you read with a grain of salt. The advice I have given here is not to be considered financial advice and I recommend that you do your own research and take all precautions necessary. Any of the projects, coins or exchanges I have mentioned pose their own risk.