#CryptoHacks
Altcoin Mania— Be Cautious— Avoid FOMO & FUD
Once the mania begins, crazy things start to happen. Some people come out ahead, others walk away with vast fortunes. Then there are those who lose it all by making simple mistakes.
Three Things To Avoid In The Crypto Markets
I thought for a while about what I should include in this article. Unfortunately, it’s been taking entirely too long to publish it, as I’ve been editing and changing aspects of it way too much.
The fact is, there are so many things that people need to learn in order to make consistent profits investing in Cryptocurrencies, especially Altcoins. I am still learning myself, and I've been trading them for about 5 years now.
Then an idea came to me.
Why not write a simple, relatively short piece on what to avoid, rather than some lengthy infographic-filled article about how to use Oscillators and Moving Averages together, or how to read tick charts in order to find better entry and exit signals?
So I made a list of the three things that caused me to lose money when I was new, (and as much as I hate to admit it), still cause me to make the occasional stupid trades that lose money.
These things are tough to avoid, but with practice and a good eye, you’ll learn to spot them early.
With that being said, here are the three things to avoid if you want to make money in the Crypto Markets.
#1 Avoid FUD → Fear - Uncertainty - Doubt
FUD will take you out every single time if you let it control your decisions. It took me a long time to learn how to deal with this particular problem.
One of the reasons that it’s so hard to overcome is because it involves one of the basic human emotions: FEAR.
It’s not uncommon for you to buy some crypto and see a 70% gain over the course of a week. Then, without warning — bam! Down 20% the very next day.
You frantically search for the reason, for some news headline that will explain what’s going on and if you should bailout.
What you come across is conflicting information. Some are saying “I told you so!” while there are two other YouTube Channels or Crypto Blogs that say the complete opposite.
Now you are worried and don’t know which side to trust. The losses are piling up, becoming devastating (to you at least because it’s your own money) so you make a decision.
Sell!
Nine times out of ten that is a very bad decision to make. Anyone who’s traded stocks before is nodding their head in agreement right now. Shit happens. You can’t expect to see green charts every single day, right?
Yet, on the flip side, it’s hard to understand the fear and anxiety that comes along with the frequent and sudden drops in the value of your portfolio until you have it chalked full of Altcoins.
When your trading Equities and Assets like stocks, (and this is my personal opinion) it’s much easier to get reliable information as long as you’re willing to put in the effort to find it.
When it comes to Altcoins and Crypto, the media is far less reliable. They downplay the Crypto Markets and you watch debates unfold on Social Media that differ from one another so much that it’s hard to imagine either of them is right.
You have one side saying to YOLO it all and HODL until the end.
While the other side constantly quotes the Dot-com Bubble and The Tulip Craze from the past, and how we’re just repeating it all over again.
It’s the Wild West out there in the Crypto Markets. Soon, I’m sure there will be some regulations in place to reign in some of the madness, but they can’t force it upon us or the Crypto Markets. Nor would I want them to.
Ohh, by them I am referring to the Government.
They have regulated industries to their bitter cold deaths while letting others go unchecked, (unregulated) employing ruthless business tactics and forming monopolies. There is a fine line to walk on if you want the government to come in to help “regulate” an industry.
Yet, there are benefits to having a small amount of it as well. That’s not my field of expertise, so we’ll leave that one to the scholarly types while we finish up our discussion about FUD.
To condense what FUD is down into a few short paragraphs and a list, here’s a clip from a website that I came across a while back.
The FUD meaning encompasses all talking points from crypto nonbelievers. These topics include arguments from some traditional economists and politicians, including a selection of “greatest hits” such as:
- Bitcoin and other cryptocurrencies are valueless
- Cryptocurrencies enable crime and cyberattacks
- Cryptocurrency mining is harming the environment
- Governments will soon ban bitcoin and crypto
- Bitcoin is the biggest Ponzi scheme of all time
Crypto enthusiasts often dismiss these topics as debunked, inconsequential, or downright propaganda from government entities.
Source → Coinmarketcap
Essentially, just make sure you are doing your due diligence when it comes to any investment you’re considering. It’s that simple. . . yet, at the same time, it’s also that much more difficult.
Trading Altcoins isn’t for the faint of heart.
That’s why you are involved, reading this guide as well as any others you can get your eyeballs in front of — you aren’t an ordinary person.
You are Lion Heart!
I bet that just woke you up, huh? You were getting bored, maybe checking your phone, so I threw in a curveball, something that sounded ridiculous to see if you’re paying attention.
Let’s move on to the second leper to avoid on our list.
#2 Avoid FOMO → The “Fear Of Missing Out”
This one is the bane of my existence. I had to overcome this FOMO ailment when I first got involved in the Options Market, then I started trying to trade Altcoins. . . Forget about it.
I’m going to be very blunt and to the point about something. I probably should have started this article with the next sentence I’m about to write, as it likely would have saved many of you the time you spent reading this so far.
If you have a weak stomach or get cold feet when your investments fluctuate, then Cryptocurrency and especially Altcoins are not for you.
The fear of missing out is almost like being on the other side of that scenario above, in the FUD section. One big difference: The person above had bought in at the right time and was patient, actually getting to experience the 70% gains.
Before selling it due to FUD and losing it all when the one-day drop recovered the next morning, actually surpassing the original 70% gains they had.
FOMO would be you waking up with a few hundred unspent dollars in your account, ready to buy a new Crypto, perhaps dip your toes into the world of DeFi.
As your scrolling the home page of Coinbase (or whatever exchange you use) you notice a coin that you never heard of before, and it’s already up 45%.
“Shit, it’s so early in the morning!” You think to yourself, heart beating — blood pumping.
This has to be the opportunity I’ve been looking for. “Something must have happened, why else would this asset be up almost 50%?”
“Wait, 50. . .? But it was just 45. . . screw it!” BUY!
There’s a problem with this method of buying Altcoins. You did no research, no looking at charts, and you really have no idea what this Altcoin even does besides its little BIO on Coinbase.
Maybe at best you checked Twitter to see what all this DOGE Coin buzz is about.
That’s a joke about DOGE Coin btw. I mean, I personally don’t own any of it, but I know people who do and have made a fortune.
Also, at least DOGE has a huge Market Cap to back it up. Last I checked, it was something like $40 Billion!
“The difference between the people who made money off DOGE, and people like myself for example, is that I didn’t buy DOGE until after Elon Musk Tweeted about it.”
Then I immediately sold it all once it dropped. Irrational!
Always do your research before buying into something.
Hell, this concept applies to every transaction in life, even one as simple as trying to purchase a used TV at a pawnshop! You need to know what the specs are, right? What year it is so you can compare prices online and look up reviews. Were there any recalls or defects?
Do you know how to check and make sure it’s in working condition before you pay money for it?
You want to have as much ammo in your arsenal as possible before pulling the trigger; once you fire that first shot, there’s no turning back.
I’m speaking metaphorically, of course. . .
Definitely not talking of the “pundit” who sold me a $1k — 56' Inch Curved 4k UHD Samsung TV that broke (fried circuit board in the back) two days after I got the damn thing!
There’s your lesson on FOMO
To conclude
— If you see a TV which normally costs around $5-$6 Thousand Dollars, sitting in a Pawn Shop near a sketchy area in Van Nuys, CA for $1,200 (which you expertly negotiated down to 1,000) right as some guy walks in and upon seeing the prize of the current debate, makes an $800 Cash Offer. . .
WALK AWAY! IT MAY BE THE BEST DEAL EVER, BUT YOU’RE NOT PREPARED AND YOU’RE PROBABLY BLINDED BY GREED AT THIS POINT.
I slammed down a rack and said: “Take it or leave it Joes…. Ummm, John Doe!” — Confession of a smuck: Steven Tyler
FOMO is a pretty straightforward one, wouldn’t you say? Just don’t buy an asset because it’s up 200% halfway through the morning. Its price is likely to plummet at any moment. There are Day Traders and Scalpers waiting for someone like you or me to get greedy and place a buy order so they can take their profits.
Trust me, they know when you’re placing them too.
It’s another lesson for another day, one that’s boring to learn and difficult to grasp, but you’ll find it very useful once you know to read lvl 2 data and order book flows.
Let’s move on to the third and final thing on the avoid list.
#3 Avoid Fake News & Be Wary of Offers That Sound Too Good
It’s an unfortunate thing but involves billions of dollars in something, and fraud is bound to happen at some point. There are numerous accounts of personalities promoting a particular asset or Altcoin, rallying people to come and join their groups to invest with them.
This is called “The Pump and Dump Scheme.”
Usually small, these groups operate on platforms such as Discord, Telegram, and many other apps. I’ll be brief in my description of a Pump and Dump scheme so we can move on, but if you’re a new investor then I suggest you research it more when you’re done here.
Basically, it starts with a small group of people, (though it can be a single person or a large firm), who begin promoting an asset.
In this case, we’re talking about Altcoins.
It will almost always be a new one or at least one that’s extremely cheap and has a very small Market Cap. When assets have a really small Market Cap, people can easily manipulate the price with enough money.
These groups encourage their followers to buy, (Pump) artificially raising the price until it reaches a certain target. Once the target is hit, the insiders sell their shares or coins, (Dump) leaving the rest of the group with a worthless asset.
AKA: Holding The Bag
Simply put, you’re left sitting there depressed and angry, as the bagholder.
There are many different names for the victims of pump & dump schemes, but that’s not really important at all, is it?
What’s important is that you never become a bag holder in the first place!
Here’s a little more information on how to spot one of these schemes and avoid them.
Look, it sucks having to read through a Crypto’s Whitepaper, but it’s a must.
If you’re going to invest money into a highly volatile market like Cryptocurrency, then you need to know what that asset is all about. Everything!
Here’s a link to a great resource for learning how to read Whitepapers. It’ll help you find useful information without having to read for hours upon hours.
Conclusion
I guess that the natural conclusion to this article is that trading Altcoins is difficult as hell. Well, trading anything involved in Blockchain or made by Cryptographic Technique, (like these NFTs popping up all over the place), is difficult.
But that’s what happens when you get blessed with the opportunity to see a new age of technology come alive, right before your eyes.
Of course, it will be hard, but the potential for reward. . .
Stop! Remember what #2 was? FOMO.
Navigating these markets should never be taken lightly. If you take this seriously, there is such a great potential for profit as we are the generation of people who get to experience all of this first.
We have the first shot at investing in these new fields of technology. It’s like going back in time and getting the chance to buy some shares of JP Morgan when it first hit the stock market.
People may still have their doubts here and there, but overall, Cryptocurrencies are starting to get mainstream acceptance and are here to stay. So educate yourself, and take advantage of this opportunity.
We will only have one chance at learning about this while it’s still new, then it becomes common knowledge, tech that’s used every day by everyone.
