So my dad came back asking what coins to buy. Well, I made some suggestions in Part 1 already, but let me explain my views on what coins to buy.
Again not financial advice just how I would approach buying into crypto for the first time.
So the below is an elaboration on what I mentioned last time.
Back to the future - What Coins to buy?
This is really about strategy and doing research. So strategy #1 would be the Boring Boomer Strategy
1. Boring Boomer Strategy
So if you are only interested in making money with crypto and keeping it as safe and simple as possible you would 50/50 your investment in Bitcoin/Ethereum and leave it untouched (or add some more along the way) for the next 3 - 5 years.
But where is the fun in that, right.
2. The Hipster Boomer Strategy
A hipster boomer wants to play a bit with his/her cryptos and tell friends about successes in trading.....but still play it safe.
In that scenario, you use 70% of your investment to buy Bitcoin(40%) and Ethereum (30%). I would split it that as I think BTC will always be a store of value, but ETH might be overruled by another layer 1 coin in the next couple of years. And not touch that 70% unless we are in a bull market and reach a new ATH or get close to the old one.
In that new bull market, I would sell and wait for a 25- 30% dip to buy back in to increase my stack.....because there is always another dip.
Now that leaves 30% of your investment to trade with. I will get to the trading topic after scenario 3.
3. The Bullish Boomer
The Bullish Boomer is here to enjoy and take a risk. This persona is investing to have fun go for the bigger wins. Still, we are talking boomers so there is a safety measure in place, not like those kids you see today investing all their money in meme coins and praying it goes up.
The Bullish Boomer is using half of the investment to buy ETH & BTC (same a scenario 2 only sells BTC & ETH during peak bull run) and the other half to play the market.
Play the market
Play the market means buying other coins than Bitcoin and Ethereum with the intention to sell them for profit.
Now which coins to use for that selling and buying is depending on your personal taste, but as suggested and to stay on the safe side for now I suggested this list of steady projects.
My Starters List:
XRP (XRP)
Stellar (XLM)
Cardano (ADA)
Polkadot (DOT)
Neo (NEO)
Celsius (CEL)
Chainlink (LINK)
Binance Coin (BNB)
NEM (XEM)
Bitcoin Cash (BCH)
VeChain (VET)
Decentraland (MANA)
Enjin (ENJ)
Algorand (ALGO)
Fantom (FTM)
Terra (Luna)
Solana (SOL)
Cosmos (ATOM)
Elrond (EGLD)
Those are projects that are well established and will probably be around for at least another year and probably longer. Now you need to review those projects and basically see what you think will be the direction the world is going.
Example: Metaverse is the magic word
At the moment the metaverse is the place to be so if you believe that is the future Decentraland and Enjin are your coins to watch and research.
Example: Layer 1´s another magic word
BTC and ETH are the well-established layer ones, but for example one of the hot new layer 1´s is Fantom. Fantom is an open-source decentralized smart contract platform that was created as an alternative to Ethereum.
The same goes more or less for Cardano, Solano, and Cosmos. Layer ones are also hot because of the increase of activity in the crypto-verse and them solving issues that will improve usability.
More on the 6 blockchain layers can be found here
Example: The Utility token
Binance and Celsius are examples of utility tokens. Tokens that give access to products or services the bigger the companies that issue these tokens become the more value their coins will get.
Look at the below Binance BNB chart for years it did nothing and then Binance grew and their coin exploded because a lot of people started to use Binance.
So it´s up to you where you to determine the future....what will be the most valued improvement or what type of services will grow beyond belief over the next years?
The List
Now in this list, you are not looking at a 100X coin probably not even a 10X coin short-term. You are looking at stable projects that will have good opportunities to make you money.
If you want to buy a coin like Binance BNB before it explodes, no problem there are tons of Low Cap altcoins, just remember most of them will not live to see another year or two. So you really have to be well informed and lucky to pick a winner.
Hence I will focus on the more stable projects for now. And I know your exchange might not hold all of these projects, but I am sure they hold some to get you started.
Making Money
And that making money can do in 3 ways, very similar to the type of boomers.
Note: We will now only review the scenarios in which you buy some ALTS (Alternative coins) to"Trade".
Option 1 - The Boring Boomer Trading Method
The boring Boomer is your typical holder, he/she will buy into the projects they thoroughly researched and of which they feel confident that these are the best improvements for the future. They will then hold those until they reached their selling point. For this semi long-term holding that would be at least a 50-100% increase in value.
Option 2 - The Hipster Boomer
The Hipster boomer will split the trading funds in long-time in projects he/she truly believes in and with the other part they will play the volatility game.
Option 3 -The Bullish Boomer
Crypto prices are very volatile, which means that a 10% change in price can happen very easily, and this is how I started to make my initial money.
That is also the volatility game that the Bullish Boomer loves to play. Not making a big one-time profit, but buying low and selling a bit higher. Taking lots of little profits along the way, of course, this will only work if your country does not require you to list all your sales or if you trade with a couple of hundred dollars that nobody cares about.
How I got Started
So I did not start by learning everything about a coin. I learned about Bitcoin and put my long-term investment in BTC and I put $250 in an exchange and started playing the volatility game like the Bullish Boomers. I would check the charts on these higher cap altcoins that I mentioned previously.
And I would check 2 things:
Check which coin in the list coin dropped the most in the last 24 hrs. And had a highly volatile day/period.
Check what the coin did in the last month/year to make sure you are not buying a coin that just topped. It´s always better to buy a coin that just dropped.
So in the example, I used above I would not buy this coin.It´s up nearly 7% Pic 1
It´s much higher than 24 hrs ago Pic 2
Based on the yearly overview Pic 3 I would be interested in this coin, but not today I would wait till it drops 7% instead of being up 7% as we are taking short-term profits.
Once you did that buy the coin that had a bad day, is currently lower than 24hrs ago and is not at its peak on the annual chart.
Buy this coin, add 10% -15%, and put it up for sale. Or sell 35% with a 10% profit, 45% with 15% profit, and sell that last 20% with 100% profit.
Always keep an eye on the price and be ready to sell it if it comes close. Because sometimes it´s worth it to reduce your price a little to make the deal.
Don´t get over-excited like me
My biggest failure is getting overly excited in a bull market. This can cause you to buy coins that had a nice dip without properly checking their use case and price history. Especially if they are no blue-chip coins like the ones on my starters list.
Therefore it´s best to split your risk and increase your fun by buying 2 or 3 coins of course 4 or 5 is fine as well, but don´t buy too many.
You want to start by getting to know the behavior of your coins a bit. Often you can buy and sell the same coin various times especially if you learn about the coin and its behavior and what is on the roadmap. If you do your research you will know when important updates are coming so you can buy in advance and sell when the rest is picking up on the upcoming improvement. Buy the rumor sell the news, often the prices are peaking just before a major improvement and that is your cue to sell.
Impatience, Fear, and Greed
Know your enemies, Impatience, Fear, and Greed.
Once you bought your coins and planned your exiting price leave it be. It might mean you do not sell anything for months or weeks....but as long as you do not sell you did not lose money.
Because selling in fear will make you lose money and if you have invested money that you are willing to lose, you will never have to sell because of fear. Of course, you can sell at a loss if you see a big dip coming and plan to buy back in once the dip is there. But that´s selling with a plan and not out of panic.
Always plan your selling position as soon as you buy, or at least with the majority of what you bought. For short-term trading, I will put in a sell offer for 80-90% of the coins I bought straight away. And the other 20% I will put in at a crazy price like 3-4 X and trust me I have sold some coins that spiked like that and made a couple of hundreds in a second.
But plan to sell every time you buy and never go but what if.
Go 50/50
So it all depends on what type of boomer you are. Are you here to have fun trading, then you do not invest long-term. You will play the volatility game with the full investment.
Are you here to use the volatility game to earn money that you will put in ETH and BTC? If that´s you, you should start with holding those and adding more using your trading profits.
Or do you want to invest, but not play the market? In that case, you can buy BTC/ETH and maybe one or two of your favorite ALTs from the list,t and come back in 2 years to claim your profit.
Bottom Line
I am learning most by doing, so I started to hodl Bitcoin while playing the volatility game and learning about crypto. So you do not have to learn, learn. learn before you get started. You can learn by doing and trust me be doing you want to keep learning.
Where to go for info
This is a great place to stay up to date with the latest news. It will provide an overview that includes links to articles and video´s.
Youtube
Daily 15 min of latest crypto news at ALTcoin Daily
https://www.youtube.com/channel/UCbLhGKVY-bJPcawebgtNfbw
My favorite YouTuber with a great accent.
https://www.youtube.com/channel/UCytNzxSmUqEBychgoKoQssw
A very good data-driven YouTuber
https://www.youtube.com/channel/UCRvqjQPSeaWn-uEx-w0XOIg
Interesting blogs and articles written by people like me
https://www.publish0x.com/home
Keep in mind that many people are promoting coins that they have invested in or promote projects/exchanges where they get a referral bonus if you join. This is no problem as long as you Do Your Own Research (DYOR) and do not trust just one single source.
Well, I hope this helps you get started and I am here for all your questions.
Part 1 of this series:
Teaching My Dad to Trade Crypto
Exchanges where I trade Crypto (Affiliate Links):
BitVavo Exchange- European. Higher trading fees (0.25 %) & Great Customer Service - https://bitvavo.com/?a=C21A94C2FD
Kucoin Exchange - Hong Kong. Okay, trading fees (0.1 %) & Contains a lot of low cap gems. Customer Service takes time - https://www.kucoin.com/ucenter/signup?rcode=rJ821BX&lang=en_US&utm_source=friendInvite
Bitmart - Global (USA allowed) Low, trading fees if you use BMX (0.025 %) & Contains a wide variety of coins - https://www.bitmart.com/en?r=7XFCVy