A 5 Rules List for Crypto Asset Trading
What's your crypto asset trading strategy? I've created a 5 Rules List I like to share with you in this article!
Rule no. 1: Build your Portfolio upon Bitcoin
Since its inception in 2009, Bitcoin has grown enormously in price and market capitalization. Except for 2014, Bitcoin has been the single top performing asset in the world. If Bitcoin would have been "just a bubble", would it keep bubbling for more than 8 years? There are a lot of professional miners betting on Bitcoin, able and willing to backup Bitcoin's market cap in order to protect their own investments. Bitcoin still accounts for more than half of the combined crypto asset market cap.
Rule no. 2: Sell high and buy low
While this strategy might seem obvious, countless times will people act the other way around: when prices keep going up, it seems attractive to buy in because you don't want to miss out on the bear market. And when prices are falling, better stay out because this probably means everything will be going south. Wrong. Just buy in at the dip and ride along to the top.
Rule no. 3: Avoid large exchange positions, lock up your coins
Heard about Mt.Gox? If you leave your crypto assets at an exchange it's not in your own wallet but in the exchange's wallet. When the shit hits the fan it's too late. Invest some money into hardware wallets such as Trezor (you can even buy those with Bitcoins) and stay safe.
Rule no. 4: Don't invest more than you are willing to lose
Consider everything you invest in crypto assets lost completely. Consider it gone. Then regardless how well or poor you're doing with your investment, it won't give you too much stress. You considered it all to be gone, right? And in case all goes well and you do feel some stress, head over to rule no. 5!
Rule no. 5: Take those profits by scaling-out
Remember the DotCom Bubble at the end of the 1990s? It was easy to make big (on-paper) profits, as is the case right now with crypto asset trading. But that DotCom Bubble burst eventually, and so could, at any moment in time, happen to the Crypto bubble. Do your research, analyze when you think enough profit is enough, then apply your brakes and take out your real profits while you can. Convert to your own fiat currency in time.
Made some on-paper profits? Scale-out a portion of those profits.
Good luck trading!