Cryptocurrencies are often compared with the Wild Wild West. A new lawless frontier where anything goes. Everyday some new development pops up and it is easy to lose your way in the jungle of information and opportunities.
It is much like when the internet was still young, people were trying out new applications for the technology and were very unaware of the many dangers lurking around.
Cryptocurrency has an even bigger allure because it’s all about the money. The masses are taking notice of the many financial opportunities that cryptocurrency offer and are jumping on the crypto hype train.
The problem is that they often lack the knowledge and experience to maneuver through the crypto jungle without getting hurt. Usually it is not a big deal if you fall flat on your face when trying out something new, you basically get up and try again. But “falling on your face” with cryptocurrency often means that you lose money.
I often get approached by people new to currency who “want to buy bitcoin”. The conversation alway goes like this:
Newbie: Hey, you know about bitcoins, can you help me buy some?
Me: Ok, but buying 1 bitcoin is pretty expensive. What are you planning to do with it?
Newbie: Well, everybody is making money with bitcoins and I also want in.
Me: Well, I am not sure you still can make a lot of money with bitcoin, it’s price is pretty high at the moment. You might want to look at other coins.
Newbie: Wait, you mean there are more?
Me: Sure, a lot more like ethereum, litecoin and the list goes on.
Newbie: So what’s a good coin to make a lot of money?
Me: Dunno, but let me ask you. What are you planning to do, trade or long term investment?
Newbie: What do you do?
Me: I am a Hodler which means I like the long term game but that’s what I do. You have to decide for yourself.
Newbie: But I know nothing about cryptocurrency.
Me: Well then your first assignment is to do your research, figure out what you want to achieve and see what you are most comfortable with.
The thing is that there is a lot to learn when you first start with crypto and even when you have learned about trading, wallets, exchanging there is so much more that you will have to master because the game keeps evolving.
One of the most important things about investing is that you need goals, an endgame or you will just blindly wander around hopping on everything that crosses your path.
There is this thing called FOMO (the Fear of Missing Out) that will grasp you and let you make bad decisions.
FOMO can drive you to invest too much into cryptocurrency, buying every coin that gets hyped on the internet. FOMO will drive you insane when you have to decide whether to sell or HODL (hold the coin for long term).
But there is a way to beat the FOMO monster and that is by creating your own strategy and goals.
Simply put, just think really hard about what you want to achieve with your cryptocurrency investments. Are you someone who wants to get quick profits or would you rather go for long term investments? What are you willing to invest and with what kind of profits will you be satisfied?
If you have goals and a plan to get there you will have a guideline that will help you navigate through all the FUD. At times it will be difficult to keep a straight course but believe me, it will give you focus and you will be able to achieve your endgame much faster.
An example is what I recently had with Dentacoin. My goal was to use this investment to achieve Dolphin status on Steemit. I had bought the coin at the pre-ico and it took a couple of months for the coin to really get off the ground. When my investment was worth €2000 (the amount I needed to get to 5000 SP) I sold the coins and powered up on Steemit, goal achieved.
However 2 weeks later the coin surged to new heights and my initial investment would have netted me €16000. Now I could have been salty about the missed opportunity but because I had set my goals I felt no regret in selling the coins just as I had planned.
The most import thing with investing and especially with cryptocurrency is to define your goals and devise a strategy with as much detail as possible.
Use this “playbook” to keep sane in the sometimes chaotic world of cryptocurrency. Be honest with yourself about what kind of person you are. Are you someone who likes to play it safe or more the big risk, high reward type.
Don’t get dragged in by other people and what they do. Make your own plan, one you are comfortable with. The hardest part is sticking to your plan because there will be a lot of temptation crossing your path. But if you don’t lose sight of your end game you will get there eventually.
“It always seems impossible until it’s done.” – Nelson Mandela
