Before investing in any markets, and especially in the cryptocurrency market, you need to understand why you need it and what goals you are pursuing. The most important thing is to prepare yourself mentally and psychologically
There are some tips, following which you can work more efficiently with cryptocurrency and with any investment, make fewer mistakes and protect yourself and your life from unnecessary risks
Overcome your fears. Every person is faced with the fear of something unknown and this is absolutely normal.
Start with theory: learn how blockchain works, what is cryptocurrency, staking, NFT, etc. In order to make it psychologically easier, allocate a small amount of funds that you do not mind losing, and start your journey as a crypto investor
The most important thing is not to be afraid to make basic mistakes that everyone makes. Be brave and be ready for anything: both profit and loss
Change your attitude towards money. Obviously, all our shocks in the crypto market are connected only with our money, namely with their loss.
In order to make it easier for you, try to perceive money in a slightly different format. Money is energy. You do not lose them, but transfer energy to someone else and vice versa. All assets in the world are used for interaction (energy resource). Treat them simply, because money is a renewable resource, and you can easily get it back just as easily as you gave it away
Do not be afraid of losses. If you are constantly frantically nervous about any “drawdown” or market movement, nine lives will not be enough for you to make money on the crypto market. Experiences will not help you return the lost funds, on the contrary, they can only make it worse and take even more than you have lost. There is a belief that those who forgot the password from the exchange earn the most (I do not completely agree with him, since they would not have earned on staking, NFT, drops, testnets, token sales, etc., but there is some truth about their easy attitude to losses and money in general, whether on purpose or due to circumstances)
How should you behave so that the funds come and do not go away? When a person sets a clear goal and plans to make money on it, knowing in advance why he needs this money, he does not sit still and does not wait for everything to fall from the sky, but works to achieve his goal. If a person really works hard at something, then he is always rewarded with the result.
But it often happens that a person is possessed by greed. An investor in a fit of emotions and euphoria from profit does not spend this money on what he planned, but continues to try to increase it “more and more” (I confirm from personal experience)
Usually after this, these people lose all their funds. Remember, money is energy, if you do not spend it on yourself, it will go to someone who really needs it. An important rule: reward yourself and loved ones for the profit received
FOMO or fear of missing out. Don't worry if you missed a low price on an asset that went up 1000% afterwards, or if you closed a trade too early, or if you see someone making money by scrolling binance.
If you missed one train, then just wait for the next one, it will definitely come, but not necessarily on schedule. Sooner or later, with the right actions and skillful analysis on your part, you will be able to earn a long-awaited big profit. However, FOMO for other assets may haunt for a long time
To avoid being subjected to FOMO, don't read a million crypto chats, trust yourself and control your emotions. Do not envy the success of others and do not blame yourself for not buying the very coin that has grown 100 times, there will still be time and opportunity and more than one
Also, in no case, do not succumb to someone else's panic, which is often erroneous. The whole market is a psychology mixed with manipulation and a big buildup of people on emotions, so act opposite to the opinion of the crowd
Is the asset being sold by entire states and is being actively announced in the media, causing panic? One of the signs to buy. They buy an asset, predict a great future for it, and even taxi drivers and grandmothers from the yard tell you about it? One of the signs for sale
Be prepared to lose everything in advance. The most successful trader is the one who is not afraid to lose his assets and has already mentally parted with them
So never invest the last money you have. Do not invest borrowed or credit money, no matter how much you believe in your skills and in the asset. Whoever cares more about money loses everything. Also, you should not count on cryptocurrency and investments as the only income, because this will radically change your attitude. Investments are about increasing capital, not earning
?Don't shift the responsibility to others. The worst thing you as a trader and investor can do for your personal growth and development is to blame other people or the market for your failures. Always take responsibility for your decisions. Even if you found a recommendation to buy an asset from another trader, but it didn’t “shoot”, you are to blame in the first place. If you have gathered in a circle of friends and decided to discuss which deals someone has and you have a clearly formed opinion on your positions, and some of your friends have a different opinion, then you should not immediately change your position and close deals simply because not everyone think the same as you. It was you who made the decision to buy this coin with your own head, which means that you understood the associated risks
As soon as the investor learns to take responsibility for his decisions and funds, personal development and the ability to apply any experience to his advantage will begin.
Practical advice for investors
The result is time. The first and most important rule: in order to achieve results in trading and investment, you need to devote a lot of time to this.
If it seems to you that the cryptocurrency market is easy money that you can earn quickly and without much effort, then don’t even start doing it. In the financial sector, investments are considered short-term if they take 3 years, medium-term from 5 years and long-term is 10+ years. Learn every day, analyze your own and other people's mistakes, study high-quality information and take lessons from professionals who have proven themselves and have shown results. They will lead you to understand the market and help you avoid fatal mistakes.
Do not regret investing in knowledge and self-development, because it is better than paying for your own mistakes with your capital. Believe me, in this case you will give tens or hundreds of times more money for your experience.
The main mistakes of traders and investors are made on emotions. When you are not in control of your emotional state, you tend to make quick, spontaneous and rash decisions. Learn to analyze your every mistake!
There is one effective advice: after each trader's mistake or failure - stop. Think and analyze why you made a mistake, why it happened that way and what you can do next time to prevent the same mistake
Do not get angry and do not aggress on the market, it brings you either money or experience. As good traders say: in order to stop making mistakes, you need to work in the cryptocurrency market for at least 3 years and more than once completely or partially lose your capital. Accept this and try to learn as much as possible from the losses that have occurred, because sometimes it is more valuable and more expensive than the acquired profit
Do not get on the train if it is already on its way. Do not buy an asset if it has already brought good profits to other investors, and you have just learned about it. Look for worthy projects with a solid foundation that no one is talking about yet. If there is too much talk about the coin, the train has already left. Investing in such an asset is risky.
In the best case, you will get a very small profit, and in the worst case, buy “at highs”, and the coin will go into a long correction zone and you will freeze your funds for 4 years (after all, those who bought at the very highs before falling by 3k are still in plus)
Diversification and no rush. Another extremely important practical advice: always diversify any of your assets. Cryptocurrency is no exception here. It is worth buying assets for less than 5% of your deposit (but the less the better, it all depends on the deposit) in order to minimize the risks of losses and protect your deposit from drawdowns and liquidations as much as possible
It is best to divide your purchases into parts, let's say you wanted to buy $1,000 worth of ether tomorrow, and after tomorrow it fell by 10% and you are in a $100 drawdown in a day... not very pleasant, right? But if you bought for $100 today, for $100 in a week and continued to buy, then you would have formed an optimal entry point. I will say even more, it is also better to sell and take profits in parts, since you are also unlikely to succeed in selling at the very highs (and you should not fret about this)
And please, always keep 30-40% in excess liquidity, i.e. stables, as this way you will have room for maneuver and peace of mind in case things don’t go quite according to plan (if you want to diversify here too, then you can hold 10-15% in USDT / USDC / BUSD)
