Welcome to Part 9 of a series of articles about CryptoTrading for Beginners.
For an overview of previous parts, scroll to the bottom of this article.
Today I will look back at 2017 and share some lessons I learned in 2017.
1. Patience is a virtue
There have been months when the market didn't move a nudge or that I even made a small loss.
The summer months were especially bad but also October wasn't so great for me. But I look at crypto as a long-term investment and keep holding. Especially December was great for some of my coins.
There is a lot of hype going on and people seem spoiled by the performance of some coins (f.i. Bitcoin).
I read a post the other day where someone decided to sell all his NEO because it hadn't grown enough in the last few months. The very next day NEO had a surge of 35%.
You don't always have to hold, but you should at least look for some good reason to get out of an investment. In case of NEO, there is a lot of positive news and development going on. If you invest in a project, at least stick around to see if it will succeed.
2. Get in early (but not too soon)
What I've noticed is that you can gain a lot of value if you get in early.
I don't mean you should participate in every ICO. I stay away from ICO's unless I'm super confident in the team behind it. There are a lot of scammy ICO's so I find it too risky.
But getting in early can mean a lot once the project kicks off and is able to report some results (or gets more media attention).
Take for examples TRON (TRX). I got 500 TRX for free, airdropped in my Binance account about a month ago. Back then, the total value was 0.5€. Today it's almost 8€. That's 1600% growth in a month if I count correctly.
Another examples are Bitcoin, IOTA and EOS, I got in early but in some cases sold too early.
When I look at the charts for young altcoins, often I see a trend where the price peaks around the time of the ICO and then drops a lot. Sometimes it takes months, even years to recover. But if the project is good, it will recover.
So, if you want to invest in a relatively young coin, have a look at the chart. Be careful that you are not still in the first growth wave because most likely it will drop once people who joined during ICO start taking out their profit.
3. Don't invest too small amounts
I must admit that I invested in some coins that had some great results, percentage-wise. But because I bought so little of it, it was hardly worth something.
Stellar (XLM) is one example. I got in because of some news with IBM but I bought a very small amount (2.5€). Then the coin boomed a lot, almost 400% gained. But in absolute figures, it means I gained 10€.
There are a few other examples like that in my portfolio.
The gains are hardly worth taking out the profit or reinvesting in another coin, so I just leave it.
Depending on where you live and the value of money in your area, you need to decide on a number that is big enough to invest in a coin. For me, I decided on a minimum of 100€. It's a round number and it has a certain value for me. It's also small enough to allow me to invest in several projects instead of betting on one horse.
4. Look for value
Before investing in something, look for reasons why it will be a good investment. Don't just follow other people's advice.
I look at the team, the investors, the whitepapers, but often I also look at what is already available. I like to see some proof that they can actually deliver what is written in the whitepaper.
Now, I may not always have followed my own advice. 2017 was a bit of a learning year for me and I guess for a lot of people. In 2018, I plan to take less risk. I will evaluate each coin and get out if needed. Because not every project will survive in 2018.
Maybe that is the worst mistake that some people make. They look at cryptocurrency purely as a value compared to the dollar or bitcoin instead of looking at it as being a project that can fail or success.
What lessons did you learn in 2017?
Disclaimer: Be aware that I'm just a guy on the Internet writing about stuff that nobody really knows what is really going to happen. Do your own analysis and take responsibility for your own decisions. I'm just sharing my thoughts and might be completely wrong about this.
Previous Parts in this Series
In Part 1 I talked about choosing your portfolio. We did everything on paper before actually buying any coin.
https://steemit.com/cryptocurrency/@gorik/cryptotrading-for-beginners-part-1-choosing-your-portfolio
In Part 2 I explained how to buy your first coins using Coinbase.
https://steemit.com/cryptocurrency/@gorik/cryptotrading-for-beginners-part-2-where-to-buy
In Part 3 I discussed how to use Exchanges.
https://steemit.com/cryptocurrency/@gorik/cryptotrading-for-beginners-part-3-using-exchanges
In Part 4 I showed how to transfer Bitcoin from Coinbase to your Bittrex wallet
https://steemit.com/cryptocurrency/@gorik/cryptotrading-for-beginners-part-4-transferring-coins-to-wallets
In Part 5 I wrote about what to look for when choosing a CryptoCoin to invest in
https://steemit.com/cryptocurrency/@gorik/cryptotrading-for-beginners-part-5-what-to-look-for-when-choosing-a-cryptocoin-to-invest-in
In Part 6 I discussed how to focus on the macro instead of the micro
https://steemit.com/cryptocurrency/@gorik/cryptotrading-for-beginners-part-6-focus-on-the-macro-instead-of-the-micro
In Part 7 I wrote about portfolio rebalancing
https://steemit.com/cryptocurrency/@gorik/cryptotrading-for-beginners-part-7-portfolio-rebalancing
In Part 8 I look at historical data
https://steemit.com/cryptocurrency/@gorik/cryptotrading-for-beginners-part-8-analysing-portfolio-performance-using-historical-data
Anything else you want me to cover? Let me know in the comments or join my free group on Facebook
Stay tuned for Part 10 of this series! And don't forget to upvote my post on SteemIt :)