Topic originally posted in CryptoCurrency by Cryptodragonnz [link]
As the title says I'm into crypto pretty deep. I was in crypto briefly in 2013, but only really hit the ground running in 2017 and never looked back. In 2017 I made all the usual mistakes, got into the wrong coins, entered some dodgy exchanges and sold the wrong coins (like selling Enjin on its first day after investing in the ICO). In 2018 things got worse, with shitcoins driving the BTC value of my holdings down by half.
Now I'm sitting really pretty and feel like I have "clicked" to the point where I am generally making money in crypto and quite a few people ask me for advice on what to do, strategies etc. Here are some of my tips, observations and ideas.
1) Don't trust anyone. Assume everybody you are talking to is a friendly thief who wants your money. That includes people shilling particular coins, or anyone asking for your crypto to invest, to random people that message you.
2) Every position you enter should be a fixed percentage of your portfolio. I prefer 1% for a typical trade. Risky uniswap gems might be 0.5%, very strong longer term positions say 2-5%.
3) Have your portfolio value in BTC (or ETH if you prefer that). Your goal is to increase your BTC value. Each trade should be from BTC, and then exit back out of BTC. Log all transactions in blockfolio etc under the BTC pair, so you can see how much BTC value you are gaining. Don't worry as much about USD gains, as in a bull market its easy to make USD value gains. BTC is the end-game here so you want to accumulate BTC, especially if BTC dominance is falling.
4) Have a portion of your portfolio allocated to farming or staking. If you have a coin sitting somewhere for ages, ask if there is some way for you to make money from it. For example, I have a large stack of BTC and ETH, so rather than have it sitting doing nothing, I wrapped the BTC and entered a Sushi Farm. Months later the rewards from that farm are worth something like 25% of the amount I initially invested. Every so often, harvest the rewards and either re-farm (compounding) or shift to your long term hold.
5) Have a dedicated stack of BTC or ETH that is your "HODL" portfolio that you never touch. Preferably in seperate legal entity (like a trust) than what you trade with. This will help for taxes. Every so often, move some profits into that long term stack. I don't do anything with that stack at all, it is just my safe holdings.
6) Spend as much time learning about tax as you do trading. Tax is something you kind of need to understand upfront - you can get way more rekt from bad tax approaches than you make gains with good trading. And keep your records safe - download all trade histories at the end of every quarter.
7) Use telegram (or discord). Find really helpful smart and useful people and stick to them. Find helpful trading groups. Eventually they will be a vital source of information or just ways to bounce ideas off.
8) Read the crypto news as much as you can. Its amazing how often something pops up (e.g. grayscale announcing new trusts with other coins) and there is still a decent amount of time to buy. And always have some BTC on an exchange ready to buy on such an opportunity. Again, telegram is great for this as you can quickly see tweets or news-links being shared.
9) Have a preset % of gain or losses whereby you will sell if it reaches that. For example, for most coins, if a coin ever goes up more than 30% vs BTC in a day I always sell. 95% of the time that works out as better than holding. In the rare event I double my position I always sell the principal immediately (I did this twice this year - with Ethernity and Blind Boxes).
10) Always have an idea as to what the current "climate" is in terms of what is moving and in favour. Crypto markets often move with certain sectors at a time. For example, if you look at the Coin Gecko categories list, you can immediately spot what is "hot" right now. Last month it was NFTs, so I was heavy in that space, but now that sector is cooling. The binance smart chain and exchange coins are doing very well right now - if that is the case what else might move? Well other low gas blockchains could be an idea - especially if they have defi - so Avax, Raydium etc are all moving too. Soon it might well be BTC's time to gain as the expense of alts. You should be rotating in and out of positions to try and go with the ebb and flow of the market.
11) For newcomers, start with basic stuff like accumulating bitcoin, learning to use a wallet, security etc. Don't just dive in and ape into defi coins, wsb style. It may suck that it feels like you are missing all the gains from the "hot" new coins, but it will equally hurt if you are just burning through your capital.
12) Look out for free crypto opportunities. They key here is sorting out the gems from the scams. This isn't just staking etc but also things like reddit moons and airdrops. A lot of people are even "airdrop farming" whereby you have wallets that carry out certain activities deliberately to try and qualify for future airdrops. Coin market cap earn and coinbase earn are two more. Even something like the binance "dust" feature to turn dust into bnb is a way of generating some more bnb (even if its tiny).
13) For farming, make sure you are using the right apps like zapper or apy vision to track all your positions, your yield and any impermanent loss. That will also help with tax records down the track, should you need it. Watch out for farming on the ETH network as your gas fees will chew up any gains if you have small positions.
14) Track all your numbers, your gains, your investments and portfolio change religiously, preferably in an excel document. That way you'll know how you are performing and if something is going wrong. Again, I wish I had done this more in 2018.
15) Have an "emergency reserve". For me, this is actually my stock positions, many which are crypto related, but you could have gold or cash (I especially like the idea of something like stable coins lent on FTX at a decent interest rate). If we get some kind of crypto turbo dump which is 40%, you can then have that as money on the side-lines ready to buy.
16) Constantly educate yourself. For me, I still need 3-4 hours a day to research and learn about crypto. I find crypto podcasts and even youtube vital sources of information, provided you are listening to the right people. Mix up your education with news, technical strategies, trading updates, altcoin news and even just the general philosophy behind sound money and financial sovereignty.
17) If you win or lose on a trade, delete that coin from blockfolio immediately. Why? Because you have exited that position, and seeing it jump up again in price is just going to torment you. You've made the decision to sell, don't even up revenge trading where you come back and try and get your losses back on the same trade.
18) Never margin trade UNLESS it is only because you want to minimise your funds at risk on an exchange. Even then I'd avoid it. Unfortunately many exchanges make this very hard to use - and there are confusing terms and default options which can rekt you (for example, positions that will drain your other funds instead of liquidiating the trade if falls too much). In fact, I avoid almost all USD pairings and only trade BTC pairing, unless very special circumstances are in play (such as ripple being delisted from coinbase).
Anyway these are the ones that come to mind, hopefully that is helpful! No doubt I'll edit this post and add a few more.
