After being involved in the crypto space successfully for a couple of years, I have come up with my own guidelines that I follow, which have no doubt been a big help to me.
Full disclosure: my style of crypto investing tends to be more about fundamentals, and holding a crypto for a month or more, and in some cases indefinitely. I do not consider myself a daytrader generally. I am out to make a profit, but I also like some technologies enough to hold long term.
Pay attention to what others are talking about in the community.
I am a reddit nut. I watch many subreddits, and generally like to read everything that doesn't involve price updates or people asking about what is missing in their portfolios. You can read the portfolio posts, but it will generally be mostly posts shilling whatever is popular that week. The most rewarding posts for me are those of people shilling coins that I have never heard of, or have yet to learn about. Generally, the post itself is semi-informative at best, but the comments are where the gold is. Does a new coin solve some massive problem? Is there some news related to the coin or business that the coin is tied to? By just generally reading a lot, you will gain a large understanding of what makes sense to YOU.
You will see lots of FUD, and this can be a great thing. There are times I will see negative criticism that makes sense, is well researched, and steers me away from a project. Other times, I see criticisms that don't seem to make sense to me, or seem unfounded. Don't forget that people who have an investment in a project will more often than not come to its defense, even if the criticisms are completely valid.
Do your own research.
When I find a project that someone is talking about or that I randomly come across, I like to ask myself a few questions. If the answer is NO to any of these, I am not going to buy into it, as it probably will not have value long term.
- Does this technology solve a real-world problem?
- Is the token/coin absolutely critical to the project succeeding, or is it simply a way to raise capital for the project?
- Does the website look professional, and include a whitepaper that makes sense, as well as a team that has decent credentials, or makes themselves easily available and open to the public?
Don't have fear of missing out, and think in percentages.
It is very easy to see another crypto skyrocketing in value, and want to sell off your coins to buy in at the top. 90+% of the time, you will buy at the top and then either have to sell at the bottom, or sit in the investment longer than you would like. When you buy into any crypto, consider the percentage growth that seems reasonable, and don't be afraid to start taking profit once you have reached that mark.
What does the competition look like?
Many times there will be several solid projects all in a single space. An example would be privacy coins. I tend to stay away all together, or I divide my investment amongst those that I feel have the best chance at succeeding. Keep in mind that these projects can many times both have great partnerships, and even be targeting different parts of the world. In many cases, there is a good chance of success with multiple projects in the same space. You just need to do your research and make an educated guess.
There is no such thing as a great investor that has never sold too early.
Great investors are out to make a profit. You should remember that you should never feel bad about selling a position if it results in you making a profit. It might keep going up, but the end goal is to come out ahead of where you started.
Tools that help me a lot:
Reddit(especially /r/CryptoCurrency /r/CryptoTrader, and any subreddit related to coins that I am interested in discussing or learning more about.
TradingView. I do not simply use this for the charts, but for the crypto chat rooms. Seeing live traders discussing what is going on in real time can be very valuable.
Cryptocurrency Calendar http://coinmarketcal.com/ Use this to find out when news is expected to drop for certain coins. Occassionally I will use profits to make a bet a week or two out on a coin, simply because I know some news is coming that should drive up the value.
Bitcoin.tax - This website is a godsend, as I live in the United States.
Cryptocompare - Easy tracking of my portfolio over time
Twitter - This functions much the same way that Reddit does in terms of providing news and giving me some insight into the general sentiment towards anything that I am reading about.
Thanks so much for reading, and I hope you find these tips helpful, or as a good reminder. I am new to Steemit, so let me know if you have any comments!