Disclaimer: This is not financial advice. I am not an expert. And you should do your own research.
There is a single strategy that is best for trading cryptocurrency. It is not difficult. You don’t have to be a genius. But it takes patience. Instead of giving you dates, I’ll tell you two stories.
These stories get to the point much better than anything else.
Day Trade Danny is smart and young. He found out about Bitcoin on Reddit. He saw the crazy upward trend and created a Coinbase account within a few hours.
Danny finds out that Bitcoin is pretty unlikely to make another 10x. He turns his attention to other cryptocurrencies.
The locks have opened.
He spends countless hours finding new “hidden gems” online. He watches sketchy YouTubers. Spends every free second on Reddit.
He starts with the bigger projects. Ethereum, Uniswap. Then it gradually goes deeper into the list. EOS, XLM, ICX.
He knows that there is a higher risk with these smaller projects. But more potential reward. He dreams of converting his $ 400 investment into $ 4 million.
One day he sees a YouTube video about a new crypto. Market capitalization is under $ 150 million. And everyone says it’s an Ethereum killer. He sees a post about it on Reddit. The founder’s Twitter explodes. Vitalik freaking Buterin follows him!
Danny thinks he’s found the next big thing.
He sees 3 different posts about this on r / CryptoCurrency. Everyone shimmers in the comments. And half of the crypto YouTubers he watches have already made a video about it.
He looks at the price list. It’s already up 70%. But Danny has too much hopium to take care of. That’s it. Everyone on Reddit says it’s going to be a moon. Everyone in the YouTube comments section is shopping. It’s a no-brainer. Danny thinks.
He trades all of his other crypto holdings at a slight loss. Go all-in on this new project. Even bet his last $ 50 just to get more. And then he waits.
Slight correction minutes after purchase. 4% less.
Danny shrugs. He knows that’s typical.
He spends the rest of the night researching the project and checking the price sporadically.
The next day he wakes up. Instinctively grabs his cell phone and checks the price. OH MY GOD!
It has increased by 40%
Danny starts partying. His hopes were confirmed. This thing goes to the moon. 1000x here we come!
Two days pass.
The price has gone down. A lot of. Danny’s investment is now worth $ 125. Nobody talks about it on Reddit anymore. It has disappeared from the public eye.
He’s checking out his favorite crypto YouTubers. Not a word about it. You’re busy talking about that Next big thing. He’s checking their wallets to see if they still have any. Only one does it. And it’s worth $ 10.
Danny comes to a dark realization.
He was the victim of a pump and dump.
Danny angrily ends the cryptocurrency. He doesn’t want anything more to do with it. He no longer mentions it to his friends and family.
In the long term, Lloyd sees the crazy price movement in the field of cryptocurrency. He sees a lot of potential for making money.
Instead of throwing a thick pile of paper in on the first day, he decides to wait. He explores the market a little more. Watched a lot of blockchain videos on YouTube.
He did some research everything He needs to know about these projects. Lloyd is familiar with the technology, communities, and teams behind his favorite cryptocurrencies.
He has invested $ 150 in each of his 3 favorite cryptocurrencies every month. He doesn’t buy more. And for years he has no plans to be paid off.
Lloyd knows there will be times when the price will go up insane. But it doesn’t really concern him from day to day. He keeps up to date with technical news. But ignore price speculation.
There are times when Lloyd would like to involve FOMO in a new project. And sometimes when he wants to cash out his current investments because they are on a downward trend.
During the last bear market, Lloyd sold almost all of his favorite cryptocurrency, Ethereum. The price was down. And he was sure it would sink even more.
But just before he clicked to sell, he returned to reality. He recalled that the long-term HODLERS are the ones who benefit from this industry.
“Not today, Satan.”
He clicks off the exchange. Stop looking at all of the FUD. And enjoy his life again.
The price will eventually recover. And Lloyd doesn’t even have to stare at his portfolio to do this.
Even if Danny had sold at the height of his FOMO investment, he wouldn’t have made much compared to Lloyd.
There is a huge difference between the two. I was both. And I can tell you from my own experience: Only one way works consistently.
Are there Dannies out there who win big? For sure. These are the day traders who brag about it on social media. But understand that they are the 1% and Not the majority. What they do is 2 steps away from gambling.
Understand that – no one brags about their losses. For every Danny who made a million, there are a hundred who lost it all.
Think carefully about what type of cryptocurrency trader you want to be.
If you want to become more like Lloyd there is a really easy way to do it. Do your own research.
That can be difficult. After all … how? Here is a whole article that describes the top three things to look for when making a long-term cryptocurrency investment.