Clickbait - gotcha!!
It seems almost daily I get assaulted with some video, article, and or tweet about a future hot shit project and coins guaranteeing me future riches. Seems like everywhere you look there is a project screaming out for attention with certain moonshot potential.
With so many amazing projects out there, how the hell are you supposed to make your picks?
In my first article in this trilogy series, I briefly gave a few general tips that helped me when I got started in crypto.
In this second ‘cryptocurrency for beginners' type articles, I will share some tips and tricks for choosing crypto and digital assets to invest in...
Start with the FUNdamentals
Picking a coin to invest in is like any other investment, you need to have sound knowledge and understanding before parting ways with your cash. When it comes to picking a crypto you should always look at the fundamentals.
A good place to start is any project's white paper. These essential documents are crammed full of info that can help you better understand a project, the tech behind it, and the team's ambitions.
Make sure you know the answers to these questions before you part with your fiat...
- What is the overall goal of the project?
- What problem is it hoping to solve?
- What makes this project unique (its USP)?
- What are it’s tokenomics like?
- Who is on the team?
- What is the project's road map?
- Have they hit their project goals so far?
On a similar note, don't just buy into a coin or project you heard about in a YouTube video. YouTubers toting a certain coin to be the next big thing may well have their own agendas, and believe me, it isn't to make you rich. They often have large personal investments in the coins they feature and will seek to benefit from a sudden rise in interest.
Always, always, do your own homework and don't buy into hype or FOMO into a coin you don't fully understand. The last thing you want to do is fall for a classic pump and dump. Speaking of FOMO...
FOMO is real and powerful
FOMO will be your main obstacle when in the crypto space. Resisting the urge to buy into a coin when you can clearly see it’s going parabolic is tough. Learning how to deal with FOMO will take time, but might end up saving you from making a costly mistake.
My personal tips for preventing FOMO buying? Observation and patience.
Once you have found a project you like, don’t buy in right away, hold back, and just watch its price movements. This way you’ll get an idea of what its current price range looks like.
With no real knowledge of the current price fluctuations of a coin, you might be buying in at the top and get burnt. Before doing this myself, I have bought all but 1 of my coins at or around the top. Don’t be like me and do your homework.
Once you get an idea of what a coin’s high and low current price range looks like, you’re in a better position to buy when there is a pullback or a nice dip.
When you know the price point you would like to enter in, head on over to your cryptocurrency exchange of choice and set your limit buy orders and chill.
Setting your buy orders takes a lot of the stress out of buying crypto. I have started doing this and I have to say, I am much more at peace now that I do not constantly price watch or hesitate whether to buy. It also frees up a lot of time to do other things… like paying attention to the wife and kids...
Now that all my orders are set and I just sit back and wait for those dips to happen, it’s a patience game. If you have ever been fishing, the same principle applies - I have my hooks baited and now I just wait to see what comes in.
FOMO’s cryptonite? Patience. This crypto game will teach you patience like you’ve never known.
On Hopium
Just like FOMO, try keeping the hopium in check too. Man, those talking heads on YouTube can sure be convincing sometimes.
Their video titles make me sick... ‘6 Altcoins That Will 1000x in 2020’, ‘HOTTEST Niche for EXPLOSIVE Gains in 2020’, and ‘7 Coins Under a Penny with Millionaire Potential (2020 Crypto Picks), to name a few.
Just because someone with a couple of thousand subscribers offers their opinion that they think a coin will reach x amount, doesn't mean it will. They know no more than the rest of us out here - there are no guarantees in this game.
Projects run out of steam, get cancelled, loose trading volume, or get replaced with better tech. Does anyone remember Civil or Deepbrain Chain? It’s a jungle out here - and like the law of the jungle, only the strongest survive
wRapping Up
Choosing digital assets to include in your portfolio can be difficult, but it shouldn't be. Just remember; pick your own projects, always do your homework, don't FOMO in and keep your expectations in check. And read those damn white papers!
So there you go. That’s me, what about you? Anything that helped you make your picks - let me know!
Until next time...
