After seeing a lot of new people entering the cryptocurrency world, I decided to post a thread with some basic advice for newbies. I won’t claim to be an expert, but I’ve been involved with bitcoin and other cryptos since 2015. Sorry if some of this is super obvious, I just wanted to post some tips for noobs. I’ve definitely made a profit by day trading, but some prefer the “HODL” mentality.
1. Never invest more than you are willing to lose.
This is the most important rule and should be obvious, but some people are investing money that you can’t pay back. For example, if you took out a $20,000 loan to buy bitcoin when bitcoin almost hit $20,000, you would be more than $6,000 in debt. Only invest what you afford to lose and remember to take out profits when you original investment doubles or triples.
2. Always sell when you have made a profit. (don’t sell too early)
It’s important to always sell when you are ahead. Preferable when up .+50%. Greed is what causes fortunes to be lost in daytrading.
3. Learn how to read all of the charts on the exchange you use.
They are invaluable to being successful at day trading. If you don’t understand the market, how can you know when to sell and buy?
4. Read and stay up to date on all cryptocurrency things.
I recommend watching r/CryptoCurrency and other crypto subs. It’s often best to watch a specific coin’s subreddit, because that is where news shows up first. Twitter is also a valuable resource of you follow the right people. Read Reddit, Twitter, news articles, company blogs, personal blogs, crypto sites, etc.
5. Get involved and be active in the community.
For example, participate in different subreddits, download Telegram and join some cryptocurrency groups, or check out discord or twitter.
6. You can still lose money if you buy CoinXX at $3 and sell at $3.20.
If you buy at 22,000 satoshis and sell at 23,500 satoshis, you still lose money if Bitcoin skyrockets while you hold CoinXX.
7. Know that no matter how talented you are, there is still a degree of luck involved.
No one can accurately predict the cryptocurrency markets. It’s partly skill and timing, but you need luck on your side.
*8. Don’t panic sell if you made a poor choice or coin. *
This market is highly volatile and chances are you will at least be able to limit your loss if you have patience and wait a few days.
9. Diversify your portfolio.
“Don’t put all your eggs in one basket” is a popular saying that applies here too. If all of your money is in AltcoinXX and it crashes overnight, you just lost all of your crypto. I recommend always holding some BTC/ETH/LTC/XMR/DOGE and diversifying the rest.
10. Understand what you are buying.
You’d be surprised how many people go to Reddit and see a highly voted comment saying “Buy CoinXYZ” and they listen and buy it without doing any research. If you see a coin that is popular take that as the first step in researching the coin and then make an informed decision. What problems is the coin trying to solve? How active are the developers? Do they have a community online? How active is it? These are just the basic questions you should be asking.
If you have any constructive criticism, tips, or questions, feel free to comment below. I made this post to inform new users and provide some basic advice.