A noob strategy guide for new traders

Hello all.

So, I have been trading for about 5 months or so in cryptos. I have learned on my way, made some mistakes, made some good moves and, overall, got a bit of benefit. I have learned some lessons about trading the hard way, so I said... Let's share those with fellow crypto traders who are just starting in this world.

If you are an experienced crypto investor and would like to add or correct something to this article, please write it down in the comments below. I am not going to teach you a clear strategy to "become rich" or tell you in which projects to invest (that's up to you to research and decide). Mostly I'm going to give you some tips and advices.

And the mandatory disclaimer: I am not an investment advisor. Please do your own research and understand that cryptocurrency is a high risk investment.

That said:

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1. Understand that each time someone earns money, someone else has lost it.

We all saw the news about some guy who became millionaire overnight with cryptos. Truth is, news very seldom will tell you about the hundreds of users who actually lost their funds. If you make a very good trade, buy low and sell high... Somewhere in the world there are some people who sold their cryptos to you at a low price, and some who bought your cryptos at a high price.

The opposite is also true: If you did invest poorly and sold at a loss, someone else in the world has bought and made a profit from you. The market view can make you forget that, in the end, there are millions of people and enterprises trying to get money from each other.

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1. NEVER invest a money you cannot afford to lose.

You can lose every single penny you bet on a crypto. I invested on some projects just to lose over 85% of my capital. But that was some money I could afford to lose, my life has not been affected at all by it. You should do the same. And let me add something: it is quite unlikely you will become rich with crypto. Do not bet your life savings on this.

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3. Learn some technical analysis of the trading graphics

Understanding the price movements of any crypto can help you increase your chances of predicting what direction the price is going to take. It is not perfect, though, and cryptocurrencies are still highly volatile, but it will give you an edge when you trade.

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4. I know I said that but... Cryptos are VERY volatile

Sometimes a single tweet can cause a huge spike in price, or can send a blockchain project to oblivion. Remember DogeCoin going to the moon a few months ago, just after Elon Musk tweeted about it?

Yeah, I did sell my doge a few hours before this happened. Biggest facepalm of my life.

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5. Recover your investment

As a trader, try as best as you can to recover your initial investment. This has 2 objectives:
First: To ensure you don't loose your funds due to changes in the market. Once your investment is back to FIAT currency (or an stablecoin) it is very difficult they lose value.

Second: To have available funds to reinvest when the market allows you to do so.

Adding to this, you may want to always keep some FIAT or stablecoin funds ready to trade. Opportunities may appear at any moment.

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6. Do not be over-greedy

A friend of mine started trading mostly at the same time as me. He did go big on Shiba Inu and his funds went "to the moon" (over 20x benefits). He decided to HODL, expecting the price to keep going up... and lost a huge benefit. Of course, eventually, the price crashed down.

I believe in most cases, an increase of value should be responded by selling at least a part of your cryptos to ensure you get some benefit. If you wait for the price to keep increasing, it is likely it will decrease and you will lose your opportunity... or maybe the funds you invested.

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7. Understand the market tends to fluctuate up and down

One of my first investments was on Chiliz. Just after I bought, the price started to drop until I fell for the fear of loses and sold. "Well, I assume I have lost 20% of my investment...".

Yeah, you guessed it: Like two weeks later, Chiliz increased its value again and I would have been able to get some benefit from it had I not panic-sold.

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8. There are not risk free inversions

No matter how good an investment looks, how good the investment or saving product appears to be, etc. There is always a risk you will lose your funds or cryptos. And if you believe youjustfound a perfect formula... most likely you are missing the point. Go around and ask until you understand it.

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9. Investigate the project associated to the coins you invest in

Understand what you are investing in. Some coins have no project at all (usually called "shitcoins" or "memecoins"). Some others have interesting projects behind, and some others look amazingly good for long-time HODLers. The project behind a crypto can guide you on your investment strategy.

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10. Think in percentages, not in number of coins.

Some times, numbers in crypto and FIAT can be confusing. What does it mean to have earned 10 millions Shiba Inus? Is it a huge change that BTC went from $41k to $43.5k? Have I lost my life savings because ETH decreased to $2k?

Rephrase that in percentages. You have increased your Shiba Inus by a 30%. BTC increased its price by a 5%. ETH lost 30% of its value. Suddenly everything looks clearer. Do not get lost in huge numbers anymore.

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11. A huge potential of benefits is ALWAYS tied to a high risk

"Oh, look, this dual investment options gives me a 70% APY! That's amazing!". Yeah, look again, pal, because it is quite likely that in the end you will lose more than you gain. Trust me on this. Understand that, whoever person or company posted this options is also trying to rip benefit out of his/her/its investments.

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12: Do not fall for the FOMO!

FOMO = "Fear of missing out". Typical noob mistake (which I have made as well): You see a crypto increasing as crazy, you buy it to go up with it... and shortly after the tendency shifts, price corrects and you find yourself loosing money.

If price of a coin is rapidly increasing, very likely it will fall just as fast.

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13: Do not fall for the FUD!

FUD= "Fear, Uncertainty, and Doubt". As I said before, I feel for the FUD with Chiliz and sold in panic. Analize well your investments before you decide to buy or sell. Do you believe that coin will recover its value in due time? Do you believe this blockchain project will increase in the long run?

Analyze and make calculated decissions.

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14. Make a plan!

Your investment plan should answer a few questions: How much money are you willing to risk in cryptos? Do you want to keep adding funds in time? How are you going to distribute them?

Personally, I dedicate a fix percentage of my salary to investments, and then divide those funds among the different options. "So 5% goes for crypto A, 15% for crypto B, 10% for this investment option...". As I said before, think in percentages.

Another point of your plan can be how are you going to react to price changes. It is easy to be taken by FOMO or FUD, we are emotional animals. A set of rules can help you make better decissions. For instance, your plan could be: "If BTC increases by a 30%, I will sell 20% of my BTC". Followed by: "If BTC falls by 20%, I will buy BTC up to a 30% of my USDT holding".

Those are just examples. The plan is completely up to you and your circumpstances.

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15. Use a portfolio

It is very difficult to follow benefits or loses when you have 20+ cryptos distributed in several exchanges and/or wallets. A crypto portfolio can help you greats on this. I do recommend Coinmarketcap's portfolio: It is great, simple to use and free.

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And that's all what I can think about so far. Hope this is helpful. And remember to always do your own research before you invest.