Crypto Trading & Investing Lessons Learned Over The Past 5 Years

  • December 14, 2019

As seen on Cointify Telegram Channel.

The one and only series of lessons you’ll need in order to survive and thrive in this highly speculative and irrational Crypto world. We hope you guys will learn from it and make your lives better.

Investment (Image Source: hintigo.fr)

Read it carefully and let it reflect upon yourselves. You definitely will get to know what’s missing in your strategy?

Let’s BEGIN.

  1. Everybody is a genius in bull markets or when markets basically go straight up but real traders can not only survive but actually thrive and make even more money when markets go down or they become highly volatile.
  2. Don’t be a blind bull. Don’t just expect markets to go up forever. All markets are cyclical. Bitcoin has gone through about a half dozen big boom and bust cycles so as mentioned above, Learn how you can also make money when prices come down.
  3. There’s a big difference between a trade and an investment. An investment is where you buy low and you hold for the long term, expecting price appreciation, where trade is where you have a set plan and you buy and sell expecting to make profit, grow your capital that you can use to put into investments.
  4. If you do have a trade, fully plan that trade before you pull the trigger on an entry and talking about having a trading plan, entries on a trade are important.
  5. Entries are important, but risk & money management is where you make or lose money.
  6. Beware of get-rich-quick gurus or internet marketers that have been jumping on the crypto bandwagon over the past several months. We see a lot of misinformation being spread in the crypto space and there are a lot of people that you know just chase hot niches. Be very careful of taking advice from somebody who has just now started to get in crypto over the past year.
  7. Decide what types of trades or investments you’ll take and ignore everything else. 90% or more of market activity is actually noise, so if you can remove the noise. Create a plan. Know what types of trades or investments you look for and push everything else to the side. It’s going to free up a lot of time and help you focus on what actually matters and what will make you money over the long-term.
  8. Don’t assume just because you’ve made a lot of money in crypto that you can just as easily make money in other financial markets. 95%+ of stock market traders LOSE money. The game is rigged. Stick to what you know works for you.
  9. The best way to day-trade cryptocurrencies is — DON’T!
  10. The best way to profit in a market is to find something that you think has big profit potential early on before the mass amount of market participants or investors or traders know about it (#investinFuture) and invest assuming you’re going to lose 100 percent of your capital. 
    That’s what we call the Angel Investor’s Approach. If you invest in say 10 startups, if 9 of them fail, the goal is that that one winner is going to make up for all of those losses and then some and a tweet by a famous investment guru reflects it perfectly. 
    “You know over active day trading is kind of like fighting an elephant for peanuts. You’re probably gonna get crushed. But, even if you do win, the reward just isn’t worth the effort. The biggest profits typically come from investing in good projects early or swing trading highly emotional or volatile markets.”
  11. You cannot control the market. The only thing that you control is your entries, your trade size, how much capital you put into a trade and your exits everything outside of that is out of your control.
  12. One market participant, meaning one whale, one investor, one trader, one computer algorithm can completely destroy good technical analysis. For example — Let’s say you have a good breakout trade set up. Every technical analysis book agrees that it is a good trade setup for a breakout trade and let’s say one market participant goes, you know what I want to dump five million dollars of this coin right now. Well that’s going to make that breakout trade completely fail. Again, you don’t have control over other investors and other market participants. The only thing you can do is control your entries your trade sides and your exits.
  13. Become a self-sufficient trader or investor. Don’t try to just blindly follow trade alerts or trade recommendations from anybody, especially people on social media or in chat rooms. It’s one thing to look at other successful investors and traders and try to model what they do. Learn what you’re doing, understand risk management and trade setups and know why you’re getting into a trade because if you’re a sheep and you’re just trying to follow like pump-and-dump groups or something you’re going to lose (REKT) over the long term.
  14. All financial network, marketing projects or multi-level marketing or anything that requires you to recruit somebody to get paid any such projects that is financial in nature is a Ponzi scheme period. (Ahem…BITCONNECT…Ahem).
  15. If you make a life-changing amount of money. Do nothing for 30 days. We think the worst thing you can do is make a lot of money and then go buy a Lambo or by some kind of depreciating asset. Don’t do it alright.
  16. Trading is not about picking exact lows and tops in a market. It’s about catching the core of a move.
  17. Don’t turn what should be a small losing trade into a long-term massive losing investment. Don’t be a BAGHOLDER.
  18. I think it’s a mistake to set like daily profit goals. It’s better to set long-term performance goals and the reason for that it’s because you don’t control what the market does on any given day. Don’t set daily profit target goals — set long-term performance goals.
  19. I think what really important for newbies is first learn how to survive in the markets and then thrive. First learn how to lose money and then once you learn risk management over the long term you’ll actually thrive (I’m one of the perfect examples to support this hypothesis. Failures (inevitable) -> Learning from Failures -> Success in a long term). Learn to survive, then thrive.
  20. The best charting indicators — If you’re looking at a price chart the best thing to look at is price action and volume. For example a chart with just the price and just the volume can be much better and much more effective than a chart where you have a bunch of random indicators that oftentimes are conflicting and giving you false signals. A lot of the best traders I know just use price action and volume and then different ways to quantify or measure that price action (Like MACD, RSI, BOLL, STOCH etc.). You can read about all these four from www.investopedia.com. The best charting indicators are price action and volume. You can use others, but it won’t necessarily make you a more profitable trader.
  21. Trends can go way past what seems rational. But always remember, it falls at the same speed as it went upwards.
  22. Following point 21, That is why I don’t try to pick tops in a market. I wait for the market to tell me when a trend is over and a lot of times that means I don’t get out at the exact top but again trading and investing isn’t about being perfect it’s about catching the core.
  23. Don’t try to trade right in front of a big scheduled news event like, a big announcement, because it’s virtually impossible to predict how market participants will react to a news event. A lot of times if you have really good news People will buy in anticipation and FOMO follows. But news could also go south. There’s a saying that says buy the rumour sell the news. Most of the experienced traders and investors have not been able to accurately predict when a big news event is scheduled and when it comes out, no matter if it’s positive or negative, what they like to do is just sit on the sidelines before a big news event.
  24. The biggest challenge for most traders is actually their ego or their need to be right. Never let your ego get the best of you. (See point 11 and 12)
  25. Actually you can make a lot of money even if you lose 50% of your trades or your investments as long as you learn how to properly manage risk. That goes against what a lot of people are taught in schools which is if you get a 50% on a test they’re probably going to fail you, but in trading or investing you could win ten percent of the time if your risk to reward ratios work out properly and still make money.
  26. In my experience some of the best entrepreneurs or CEOs or managers typically make the worst natural traders and investors because those skill sets are actually polar opposites. A lot of the things that make a great CEO are some of the same things that will lead to him being a bad investor. But hey, exception always exists.
  27. People with the best kind of natural mindset for investing or being a good trader are typically those people that have experience or are in high-risk careers like firefighters or pilots or policemen or doctors. People that are used to in their day to day lives working in high-risk situations and if you can train your mind to be under control when the market is dumping or breaking out, You win. Right there. Right then. Period.
  28. Avoid pump-and-dump groups. (See point 6 and 13).
  29. You will make every mistake in the book. Don’t beat yourself up about it. Just learn and try not to repeat the same mistake twice. One mistake is forgivable. The same mistake done again is a sin.
  30. Don’t treat cryptocurrency exchanges like bank accounts that are government insured. The best place to store your coins is in a hardware wallet and unless you control the private key they’re not actually your coins.
  31. You can’t catch every trade. Cryptocurrencies trade 24 hours a day, 7 days a week, 365 days a year. You are going to miss some big winners and obviously some big losers. So, don’t worry if you miss a trade. This is what we call JOMO or the Joy of missing out. Instead of FOMO — Fear of missing out which can actually cause you to chase and buy a trade at a much higher price than you should and actually lose money, JOMO allows you to keep your cool and trade after analysing the market carefully. This way, the chances of you losing money will reduce significantly.
  32. Don’t invest in a crypto asset for the long term unless you really understand it inside and out and you truly believe in it (#investinFuture). There are tons of capital flowing into cryptos right now and there are a lot of people just throwing money at projects that they have no clue or what the value of that truly is? They’re just buying because they hear other people are getting rich. If you want to minimize your losses only invest. There’s a big difference between investing and trading investing coins (See point 3). If you truly understand the value and you believe in a project, only then you will succeed in the long term.
  33. You can still make money trading the momentum and the hype of shit-coins just don’t use those as long-term investments. Do analyse the risk and only invest what you can afford to lose because the chances of winning is going to be slim.
  34. Stay away from coins with very low trading volume and low market caps. If you go to coin market cap, you’ll see there’s over like 1300 crypto currencies right now and I would say well over 90% of those don’t have enough liquidity for me to be interested in trading them. If you stick to the higher trading volume coins that are trading at least say nowadays five million dollars a day or more. That’s going to help you stay away from pump and dump schemes and getting trapped in a trade that you can’t sell out. But, again (Point number 32), If you believe in a project then you can always invest. That’s how we find true gems, the #investinFuture coins. Do your due diligence, DYOR, for sure. Every single time.
  35. This is a huge one because I see these stories of people taking out mortgages to buy cryptos. Don’t do that. Don’t mix trading money with money that you need for living expenses. It’s called risk capital for a reason and the practical side of that is, if you’re trading or investing with money that you know you truly can’t afford to lose then you’re gonna make emotional decisions. You’re gonna buy high and you’re gonna sell low. Everybody knows intuitively that, To make money you buy low and sell high. But, there’s a reason why 9 out of 10 people do the exact opposite and the number one reason is usually they’re trading with money that they can’t afford to lose. Always remember this.
  36. When you’re trading or investing, think of yourself as a hunter. Save your ammunition a.k.a. your trading capital for the big game right don’t shoot up squirrels and rabbits, trying to chase little moves here and there. Save your ammo. Be patient and wait for the big moves (Jan-Apr’18 Crash) because that’s where you’re going to make the most amount of money.
  37. Most crypto corrects and all crypto currency exchanges have been locking up or their servers crashed when there’s big volatility. When the markets are making big moves sometimes you can’t actually execute a trade when you want to. So, the way that you combat that is start to maybe sell a little bit early before you think the markets going roll over. That’s only for tradable coins. Not your long term hodls.
  38. It is kind of funny but it’s true. Trading and investing brings out all your emotions to the forefront. Fear, greed, hesitation, overconfidence. All of these things when you’re actively trading or investing, these come out and so you have to deal with them. (See point 24).
  39. The hardest thing to do in trading is nothing, but that’s also the thing that can make you the most amount of money is by sitting back and letting a trade work.
  40. This is a big one for anybody that’s just getting into crypto right now. Just because a market is in a bubble doesn’t mean that it’s going to die right there. There’s this misconception that I see in the media all the time that Bitcoin is in a bubble. Cryptos, of course, are in a bubble but Bitcoin has gone through half-a-dozen big bubble cycles and each time it’s recovered to have a higher price over time. So just price bubble alone doesn’t mean that something is gonna go away. When you have speculation that outpaces utility that’s a bubble and yeah cryptos over the past couple of years, we’ve seen more speculation than use or utility and so that’s why the market goes through boom and bust cycles. (Read both my Crypto Bubble articles if you haven’t read them yet.)
  41. Manage your trades in a way that would leave you with no regrets no matter what the market does. When you’re in a trade or an investment in the markets going up, ask yourself, Would I regret selling all of my position? If the answer is yes then don’t sell all of your position. If the market is going up and you get to a profit target and you ask yourself, If the market fell from here Would I regret not selling part of this position? If the answer is yes then sell part of the position. It’s that simple.
  42. Learn to think like a contrarian. If you’re someone who needs to have your opinion validated by everyone around you, then trading and investing isn’t for you. This is for every single member here who regularly ask on the chatroom, if the investment done by them is right or wrong. Consistently. 
    A lot of times the best time to buy is when everybody says you’re crazy. We know Warren Buffet doesn’t acknowledge Bitcoin because of his primitive way of thinking but there is no denying he’s a genius in investing. His quote says when everybody’s greedy that’s when I’m scared when everybody’s scared that’s when I’m greedy. Learn to think like a contrarian and get comfortable when people disagree with you because that’s how you will make twice as much money than anyone else.
  43. The shorter the chart time frame the less predictable the price patterns are. For example, if you’re looking at one-minute chart at Bitcoin, you’re gonna see a lot of noise and momentum but on the other side of that the longer the time period like daily or weekly chart the more variables you’ll have to take into consideration. My kind of sweet spot is I use the daily chart so every candle on the chart is one day. That’s where I look for my trade setups, my entries and my targets and then I use a 60-minute chart or one hour for each candle to time the entries.
  44. Some market conditions are great for pushing the gas on every trade setup you can find, where other market conditions call for you to slam on the brakes and step away from the markets altogether.
  45. 90% or more of all crypto currencies will eventually go to zero. Invest accordingly.
  46. The mental (emotions and public psychology) side of trading and investing is the hardest to master and yet it is the most underappreciated skill. It’s the biggest thing that’s going to cause you to make or lose money so invest your time into understanding the mental side.
  47. The three biggest problems that I see that most traders have are over trading, hesitating on their entries basically when you know you have a good trade but not having the confidence to pull the trigger and number three closing positions, closing a trade or an investment prior to your profit targets when the trade is still intact when you have no reason to get out. Basically you get shaken out when the market makes a little pullback, so learn how to move past those over trading, hesitating on entries and closing your trades too soon.
  48. You can make a careers worth of profits in one year or on one trade but don’t think everyday is going to be a home run. Boredom and impatience and like I said on the last lesson over trading are some of the biggest problems that traders have. Play the long term game, be patient and wait for the best plays. You don’t have to chase every little move. Let the opportunities come to you. Some of the best traders I know consider themselves retired and they come out of retirement the moment a big trade or a big opportunity presents itself. Trade less, Profit more.
  49. Don’t trust anyone else to trade for you. Manage your own high-risk investments or don’t participate at all. If you can afford and want to have an investment advisor that’s fine but if you’re gonna participate in highly risky markets like crypto currencies either do it yourself or not at all.
  50. This is a huge one for anybody that has recently heard about Bitcoin or crypto currencies. Take the news, news websites and TV channels views on crypto as a pinch of salt. They are trying to get clicks and views. They are not looking out for your best interests or trying to help you make money. Nobody is in this world is working for your best interests, except your parents. That’s a harsh reality. They’re just talking about whatever is hot and whatever will get them views or clicks. So a lot of times, if you actually trade the opposite of what the news is doing, sometimes that’s the better thing to do. Just don’t expect that you can watch the news or read news and follow a news article and make money.

This concludes our “Crypto Trading and Investing Lessons”. We hope you have read every single point thoroughly and will reflect it upon your future investments. I hope it was helpful for you. We’ve put a lot of thought into it. If you will follow even 10% of what is written here, you’ll be ahead of more than 50% of the investors.

If you got value from it, share it with a friend or anybody that you think would get value. Print it, share it, distribute it to as many people as you can. We will find our mission accomplished if it helps even a single struggling trader to overcome the problems and dilemma s/he is having.

Always remember “It’s you and only you, who will define your investment future. Not the market.”

Have a safe and Profitable investment.


References: Twitter. Facebook. Reddit. Youtube. Telegram. Special Thanks to Chris Dunn — Professional Investor and Trader without whom this list wouldn’t have been completed, Simon, Bob, Failures.


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