5 Skills Every Cryptocurrency Investor Needs To Master (Otherwise You Will lose Your Shirt)
Cryptocurrency investors love to talk about what could have been.
Every cryptocurrency investor has a story of the big one that got away. The one trade that could have made them millions if they only bought or sold at the right time.
Of course, hindsight is 20/20 and it's always easier to talk about what could have been than making the right trade today.
2017 was the year many traders could make extraordinary profits without really knowing what they were doing.
The market today is much different.
In today’s market, unless you have the right skill set you’ll likely lose over the long term.
Where most investors struggle is not having a solid core set of skills to help them become better long-term traders.
So to help you out, here are 5 skills every cryptocurrency investor needs to master (otherwise you’ll likely lose your shirt in the process):
1. Learn to Form Your Own Opinion:
Everyone has an opinion.
This is especially true in cryptocurrency markets and in this market, many opinions publicized are for the financial gain of someone else — not you.
Developing the skill and ability to form your own opinion is necessary to be able to form a realistic opinion on the potential outcome based on your own research.
2. Do Your Own Research:
As the old Russian proverb goes, Trust but Verify. Cryptocurrency markets are still very much the wild wild west and obviously, you can’t always believe what you hear (on the internet). It’s necessary to do your own research (DYOR).
Take everything you hear with a grain of salt and verify before coming to any decision. Of course, this sounds like common sense, but since common sense isn’t so common and often when emotion and common sense meet at the same intersection, too often emotion takes over.
3. Learn to Control Your Emotions
We’ve all heard of FOMO (Fear of missing out) and FUD (fear, uncertainty, and doubt) and they are powerful drivers for our buy/sell decisions.
To underestimate the power of these drivers is to put yourself at serious financial risk of making wrong decisions. Especially when large monetary values are being traded - it’s difficult not to let emotion impact your decision and practicing this skill with pay dividends many times over.
4. Avoiding Emotional Attachment:
Personally, I’ve made this mistake too many times to recount. Falling in love with an idea or product and sticking with it to the bitter end.
Investing is a game of calculated risk, not love. When love clouds your better judgment, it’s too often a costly mistake. Not just in life, but in the markets too.
There will always be new cutting-edge technology and cool projects entering the market. This doesn’t mean they are good investments.
5. Sticking to the Plan:
The market will always challenge your strategy and shake out weak hands. If your plan is to hold for the long term — hold for the long term.
This is especially difficult given these markets are so volatile and when you are looking at potential 50% loses on a given day.
It also goes without saying, have a plan and strategy before entering the market, to go without and wing-it is a recipe for disaster.
Give me six hours to chop down a tree and I will spend the first four sharpening the axe
— Abraham Lincoln
These skills take time and practice to develop
So, if you are just starting out — start slow. Build your experience and develop these skills. The cryptocurrency market can be ruthless and when one bad trade could mark financial ruin, it’s prudent to focus on skills development rather than testing your luck on a high-risk trade and hoping for the best.
Trade Safe,
Richard
