I run a community of digitally savvy people who like to improve their skills and grow financially. This past week, I had an open house session where group members could suggest the next class they’d like to have.
And yes, you guessed right, they chose to learn about Cryptocurrency. And that’s why I’m sharing this.
I found Tim Ventura’s response to a question asked on Quora very insightful and I bet you’ll agree with me after you read all 11 tips.
11 Crypto Tips Every Crypto Enthusiast Should Know
First: Buy the dips. The problem is knowing if it’s a dip or a larger downtrend. Most crypto has a natural peak & bottom typically on a daily basis. If you time it right, you can hit the daily trend and make sometimes 20%.
There could sometimes be exceptions, so be careful. These trends can change without notice, and you can lose money if you’re not paying attention!
Second: Don’t chase breakouts. So you’re in your exchange, surfing trends — and BAM! You see one skyrocketing. Your natural impulse is to buy this shooting star. Then 2 seconds later, it crashes & takes you with it.
I’ve lost a LOT chasing breakouts. I’ve had to train myself to fight the impulse to buy when I see a fast-mover on its way up. You CAN learn how to read the signals and buy breakouts with about 75% confidence, but it takes a lot of practice. Remember, when they peak fast, they crash even faster. This has cost me a lot.
Third: Never Buy Peaks. If you absolutely can’t resist the urge to buy a coin that’s increasing in value, at the very least NEVER, EVER buy when the green line is close to being vertical.
I don’t know why this happens, but that vertical green line almost always happens right before a reversal and the coin comes crashing down. If you’re already in a coin that’s on its way up, try to sell right before it goes vertical. Yes, you may miss up to a 1% increase in those final seconds, but keep in mind that if you hold too long & it dumps, then you can lose a lot more than you’ll gain by hanging on too long.
Fourth: Trade against USDT pairs. This isn’t set in stone, but when you trade against ETH or BTC, there’s natural movement on both sides of the pair. I’ve had several trades go sideways because ETH was on an up or downtrend that I missed because I was focused on the alt-coin. I’ve had other trades where it appears the coin is increasing in value, but it’s actually staying the same in value — the chart’s increasing but ETH is declining.
If you trade against USDT, you can be relatively confident that your gains are actual financial increases, and won’t simply be eroded as ETH fluctuates. Of course, this limits you to trading BTC, ETH & BNB (on Binance), so if you want to hit the alts, you’ll need to trade against ETH or BTC. Most of the people doing this trade against BTC because the daily fluctuations are less.
Fifth: Trade coins with volume. The higher the trading volume, the more predictable trends will be. When you’re looking at alt-coins, try to find ones that have a significant trading volume.
Keep in mind that low-volume coins also have peaks & valleys, but if you don’t have a lot of people trading in them, then it only takes 1 major player to decide to do something strange to make it perform unpredictably.
Sixth: Long-Term Coin Fundamentals Don’t Affect Short-Term Trades. You’re going to meet a lot of enthusiasts for XRP, XML, Cardano, etc. They’ll tell you to buy based on the coin’s specs, future possibilities, partnerships, etc. In the long term (ie: an entire year) this might matter, but in the exchange, it doesn’t mean a damned thing.
Seventh: Daily News DOES Matter. I subscribe to a few crypto news sources, and when a big story comes out, it does affect coin value. You can profit from the news if you’re early with it. I’ve noticed about a 1 to 2-hour delay between the time most stories break and the value increases. Don’t count on news to increase value, though. Just hope & cross your fingers.
Eighth: Coin Hype Is Bullshit. You’re going to read a lot of hype from long-term holders trying to boost their coin’s value.
Base your decisions on past performance first, news second, and hype as a very distant third, if at all.
Ninth: Ignore The Mainstream Press. I see stories about crypto “crashing” on a daily basis, which in turn inspires FUD in traders, which in turn causes crashes. The thing is, if it “crashes” on a daily basis and then bounces back up, it’s not really a crash, is it? In fact, if you know how to trade, you WANT that volatility, otherwise, you can’t boost your gains on recovery.
I keep seeing news stories about “crashes” and “this is the big one”. It’s kind of a chicken-little story: which big one? We’ve had a lot of crashes since last year. If Bitcoin was going to die, by now it’d be long gone. Maybe it’s just highly volatile because traders keep getting pounded by ignorant journalists who’ve never actually seen an exchange.
Tenth: Know when to walk away. If you’ve been trading for a couple of hours and you get tired, you might lose your reflexes. If you’ve made a couple of bad decisions, your natural inclination is to keep trading & work your way back from it. However, that often leads to more bad decisions & more losses.
There are other times when you’re fresh — but the market sucks. There can be a temptation to dive in & make some trades, but if nothing’s moving you can get yourself into trouble trying to chase the tiny fluctuations that look like they might become trends.
Sometimes, nothing’s going on — you shouldn’t be trading in those conditions, it’s a recipe for losing money.
Know when to quit for the day & walk away. Pull your money out, put it in stablecoins, and come back to trade tomorrow with a fresh pair of eyes.
Eleventh: Quit Blaming Bots. Trust me on this, I’ve used a lot of bots. They don’t work that well, they crash & freeze all time, and most are on 1-minute or 3-minute charts, which means they’re not that fast, either.
Bots aren’t the reason the market is volatile, and frankly, from what I’ve seen they don’t work better than doing it by hand. Their only advantage is being 100% focused on crypto whereas you have a life to live.
In Addition
Tim published this response in 2017. Long time right? But still very valuable. As a bonus, I’ve edited his response to be read in relevant context to the time we are in. Aren’t you just glad that I stole these tips after all?!
However, here’s The Standard Disclaimer: Cryptocurrencies are highly volatile. Never invest more than you can afford to lose. This post contains personal opinions only, and not financial advice. I take no responsibility for any financial decisions that you make.
Enjoy this story of a Web3 female founder who built a unicorn while you consider joining my free online community.
LinkedIn: Onyeka Ekwemozor
Twitter: OnyekaEkwemozor
