One of my closest friends first talked to me about Blockchain and Cryptocurrency 2 years ago and how he started investing in Bitcoin. He explained the Blockchain technology to me and how it would change the world, but the way he explained it to me was so confusing that I gave up on the whole idea and I moved on with my life and earning money with my regular job.
A year went by and another friend of mine told about how he had started investing in Cryptocurrency and that he had quadrupled his investments in just a few months. Now THAT got my attention. He told me how he had bought some alt coins and that by just sitting on them they had grown in price and so did his portfolio. I remember going home that day and repeating to myself "Crypto, Crypto, Crypto". From that day, there was no turning back....
Now here I am 6 months later, a full believer of the world changing capabilities of blockchain technology, fully invested in cryptocurrency and I have also made so many ridiculous mistakes that it would make someone from the outside completely shocked.
When I started putting money in, I listened to the advice of my 2 friends and bought the same coins that they had. These were the same coins that had made them a small fortune. During that first month, I was travelling a lot so didn't really keep an eye on my portfolio. I didn't touch anything. It was a fantastic surprise to see that my nominal amount had doubled in a month time. This would be the start of my problems.
The small success that I had reached, based on the advice that my friends had given me, made me hungry for more profits and at a faster rate. I looked at poloniex and in my greedy mind, I thought "Why don't I trade those coins that have already made me 100% return on for some cheaper alt coins that could very well make me a 1000% return". After all, I had heard the stories of people that had made millions buying coins at a fraction of a dollar and that had reached prices in the hundreds. So there I was with a portfolio of cheap coins that I hoped would make me a millionaire one day (soon I hoped). It didn't matter that I had done minimal research on the each coin's background, in my twisted mind, I would sell them when they pumped and then buy more alt coins with the profit. During this time, my working habits changed. I started spending more time on doing daily/weekly trading than on my regular job. That job became just a way to fund my Crypto trades. Don't get me wrong, I made some great profit but the fact that I was glued to poloniex and bitrex all day to follow the fluctuation of each coin, made me highly nervous and obsessed. There wasn't 5 minutes where I wouldn't refresh coinbase on my phone to see the latest price.
The volatility of these coins made me very nervous and irritable. I became like a gambler. Everytime a coin would pump or dump, it would affect my mood. It was only after I lost almost half of the value of my portfolio when a coin I bought tanked completely that I decided that I couldn't do this anymore. It dawned on me that I was a horrible trader because I was too emotional, greedy and impatient. The first coins that I bought when I had started had increased by 500 to 1000% in that same period that I was trading. I did the math, if I had listened to my friends and held those coins, I would have had 4 times more money and would have much less of a nervous wreck!
The decision was made, I planned my transition from day trading and the madness of pump and dump to choosing three coins which I believed that in the long run, would grow tremendously in a slower but more constant manner. What was important for me was safety and more stability. The funds should able to be stored on my Trezor wallet so that I could rest assured that they couldn't be stolen and that the team behind was solid and moving forward. From that point on, my life improved tremendously. I was no longer checking my phone every five minutes but just twice a day. I went back to being fully dedicated to job (which I was good at). If the price of my coin dropped, I didn't care because i BELIEVED in the project and was only thinking long term. My portfolio also grew steadily. It was not 10 times but it was way better than any other investment that I had ever made.
I now wait patiently for what we call "red days" when the market crashes, and you can load up on some great coins at discounted prices. Just wait a few days and see your profits shoot up as the support brings the price right up. It's important to always learn from your mistakes. Trading is tricky and risky business and should be left to professional traders and those that have nerves of steel. My advice is to have the majority of your portfolio in solid top 10 coins and leave a percentage on some coins which you can speculate with to fund your long term Crypto ventures.
Avoid my mistakes:
- No Patience
- Guided by fear and greed
- Wanting too much too fast
- Panic selling and decisions
- Too greedy
- Victim of scams
- Compulsive trading
- A finger in too many pies
Instead you should...
- Invest in coins that will survive if there is a huge crash that will flush most of the alt coins.
- Invest in coins that you can store safely in a Trezor or ledger wallet
- not check your portfolio all the time
- Just hold, sleep well at night and reap the benefits
I hope this was useful to you and I you wish lots of success in your Crypto currency ventures.