…or how to not get a heart attack on the way to the moon
Having been in the crypto space for some time I get asked frequently what the best investment strategy in crypto is. While there are many different strategies to apply as with every investment there is a specific one that I can recommend to everybody especially if you are not a professional investor. The main benefit of this strategy is that it takes away your stress level and keeps your focus on other things while you can still participate in the upside of the blockchain revolution.
Especially for newbies to crypto who have joined in the recent bull market and have witnessed the crash in May this strategy is highly recommended. If you are one of them the probability is very high that you panicked from the fast declining prices and sold your coins at a lower price than you purchased them. The probability is also very high that when prices will rise again you will start buying at a higher price than when you sold — Not the best way to make a good profit.
If you are one of these traders (most will not admit even though they are) you are a so called “weak hands” trader who lacks investment knowledge and/or conviction about cryptos future. Ideally one should sell when prices are rising and buy when they are falling most people do it the other way around. To be fair it is also hard to read the market for professionals especially in volatile crypto.
What most new joiners are not used to is high volatility because they entered in a bull market with constantly increasing prices. But historically high levels of volatility have been normal in the crypto market due to hypes, weak hands, leveraged positions and market manipulations. For professional traders high volatility is a dream as they can play the market but for retail investors seeing their portfolio increase and decrease by +25% in days it is a roller coaster of emotions.
Luckily when applying the below mentioned strategy you become indifferent to volatility and I will stop calling you a weak hands traders as it requires some mental strength.
Before I start outlining the strategy lets first start with some assumptions you need to agree upon when you want to follow this strategy. Generally as investments involve forecasting the future it is important to have a thesis to base your investment on. Many investor just invest because they read the news about rising crypto prices or a friend told them about his great performance. Many have no plan on their investment such as when to cash out, they just watch their assets increasing in price and then decreasing again and then sell in panic. So lets not do it this way and follow an investment thesis:
This strategy is based on the following assumptions:
If you agree with the above assumptions you can follow this 6 step strategy.