Today I had the opportunity to discuss cryptocurrency with a mate in Australia. The first question I asked him was:
"What is your target?"
There was some stammering and confusion followed up with a brief moment of silence after the question. In retrospect, the question was a little unclear. But, the question is a very common conundrum a regular crypto trader has before investing in any asset. For a novice, the question is as vague as it is nonexistent.
With the recent mainstream attention, crypto has become "magic money" to many first-timers. In the past, this concept was not as widespread as it was within scammers. But now you don't need scammers to make you believe in the magic money. You can simply install an app on your phone and get into crypto within minutes as explore the world of magic money yourself.
After explaining the question, I receive a rather expected and very predictable answer. Something along the lines of "I don't know what I am doing" and "I just wanna cash out as much as I can". There is an expectancy of becoming a millionaire overnight. The stories of early investors buying into BTC when it was in mere cents and dollars have been filtered and passed around in the form of fairytales with unrealistic hopes and expectations about crypto.
At the moment I was reminded of Mark Cuban and the beginnings of his inspiring "rich over night" story. There is a timeless lesson in there. Hiding away in the dotcom stories. While Cuban played it smart, many investors were left with dust and sobs.
You see, the dotcom boom was one of the biggest booms in the early stock days that have created a field in the world of the stocks and given birth to many "big players". It also wiped off many investors that didn't realize the bubble was about to burst. For those who got out in time, one of them became today's Mark Cuban. Others simply lost.
It is important to set targets when you invest. Crypto or not. You need to have a goal and stick to it. The seemingly never-ending profits are very alluring. But they are also the reason some lost in the dotcom boom and some thrived. When you have a target and stick to it, it lowers the chances of you becoming "lost" and increases your chances of becoming "Mark Cuban".
The idea is simple. Put a cap on expectations. Or bluntly speaking - on your greed. Stick to the cap. Set a "stop loss". Protect your profits and limit your losses. You can also practice "limit orders" to make sure you close out on your target.
If you aren't in for a quickie, which is the most ideal, then simply HODL. Chances are you have invested into a coin that you have researched and see long-term potential with the asset. In this case, you can always keep an eye on the gains and expose yourself to a trend, projection, and even prepare.
Oh yes, I should have emphasized "Research".
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