Yeah, simply that.
Don’t get yourself in trouble with the idea of multiplying your investment because most of the time won’t be like that.
Take into account your expenses and needs: food, electricity, vehicles, taxes, materials for anything, studies, some pocket money for going out on Friday and Saturday… and what’s left: that’s what you invest.
“There is no avarice without penalty” ~ Seneca
Or like we say in my country: “La avaricia rompe el saco”. your Being too greedy in an uptrend can cause to lose all benefits if it suddenly is oversold. It’s better to sell at a reasonable price and be conservative in this aspect and get some benefits than lose a lot.
Let’s take this graph in example: I bought at the purple line (0.025) and, I was able to sell at 0.169 which is when I looked at its value making then an x8 profit, but I waited to see if it could get higher and at the moment of this post I didn’t Take Profit yet.
One could say: “yeah, but graphs tell you everything. It was the moment to sell”. It could be, of course, but most of the people that enter the Crypto world aren’t experts in trading and know everything about Technical Analysis, so in that sense, it’s better to keep Taking Profits and not be greedy.
You can always buy more in a correction.
Being emotional in a volatile market will kill your profits and put you in a bad mood more often than not. Analyze your strategy, calculate your risk, set stop losses and Take Profit orders, and don’t modify them unless a heavy reason demands it.
It’s harsh seeing how your money drops and get to value less and less and, that might make you want to sell and get out of that coin: DON’T SELL IN LOSSES. (unless it’s clear it won’t recover as it happens in very small coins like those sold in PancakeSwap).
In volatile coins and those such as NFT games, meme coins and etc. the most important thing is withdrawing the initial investment once you get some benefits.
These trends are just that, most of the NFT games and meme coins I’ve seen have had a huge pump and then continued to dump. Therefore, if you want to reinvest or keep something in those coins, better be the profits than your original investment.
People generally don’t spend their days looking for new gems or analyzing markets unless they work professionally in it and tend to rely on YouTubers, influencers, cryptoanalysts, or shillers. You may trust them a lot if they didn’t fail any signal (which usually isn’t the case). That could get you in a loss situation.
Generally, it’s best to analyze each coin we are getting our money on:
- Market Cap
- How much money is in that coin
- Holders and their percentage
- If most of the supply is held in a few wallets THAT’S BAD. They could dump the whole coin by selling all of its tokens.
- Transaction Value and Fees
- Check that it doesn’t ask for a high percentage of your sell as a fee. Most that I’ve seen is 12%.
- Liquidity and Trading Volume
- A coin with no liquidity won’t be able to satisfy lots of sales and there would be that won’t be able to sell. Again THAT’S BAD.
- Circulating Supply
- The number of coins currently accessible to buy.
- If developers are known
- Unknown developers can make a rug pull with no punishment. That isn’t the case with Bitcoin. 😜
- Use case of the coin
- Useless coins will progressively value less and less.
- Meme coins get pumped up based on rumors, news and, momentum (FOMO).
- Some signals are pushed when the coin is already pumping, which isn’t ideal.
- White Paper
- Road Map
All of this is called Fundamental Analysis.
It’s very important to analyze these coins if they are sold on Defi (highest risk) like PancakeSwap (BSC) or UniSwap (ETH), as lots of them end up in rug pulls.
This way we’ll get more control over what we buy.
It’s related to the above point: you need to verify every contract you get is the official one, if general data like Market Cap is correct, dates of token unlocking, etc.
I follow some people that I consider great in the crypto universe: