Note: This is a guest article by Jason Lim.I remember my first encounter with cryptocurrency was during the lockdown due to COVID-19 as I was browsing through the internet. The first thing that caught my mind actually was the blockchain technology itself and how it can bring great impact into human lives.
I also realized the potential of wealth through crypto. I started with zero knowledge about coding or crypto, but fell in love with it as I learned more. The reason I got into cryptocurrency is to make my first million in 3 years time (or less).
I believe we are at very early stage in the evolution of blockchain technology. If you are already in, then congrats! In my humble 1 year of crypto investment experience, there are few important things that I learn. So let's start right off!
Know what you're doingKnowledge is key! Keep learning, especially on fundamental analysis (FA) and technical analysis (TA) on the project you want to invest in. For example, go into their website, Telegram, Twitter or Discord group. This is what I did in my first month of investing and still do up to this day.
While I listen to lots of influencers from YouTube and Twitter, I always DYOR (do your own research). Understand the trend / narrative in the space. Few tips from me, follow reputable crypto influencers on the social media and find a group of friends you can talk to share views on crypto. This helps a lot in my journey.
Pick your spaceIt is easy to get lost in the crypto space as there are too many projects. I remember like I got more than 20 tokens in my wallet to manage in the beginning and having a hard time to cope (especially if you are part time), remember you still have a life to manage. Resources are always limited and you tend to feel like going into everything.
I suggest you like the kind of portfolio you maintain. Manage your portfolio along the way and focus on your strategy. Be knowledgeable of the general market but be good in what you choose to invest in (things that you're passionate about). Currently I am into launchpad projects, gaming and NFTs. I believe gaming and NFTs will be the entry for mass adoption in the crypto space. Not all projects will last through the bear market so pick wisely.
Control your emotionNever FOMO (Fear of missing out). The feeling of FOMO is real, as much as we want to win, we also do not want to lose (miss out). Never enter when a project already pumped or hyped.
I always buy the rumor and sell the news. Having patience is key and is easier said than done. Remember there is always next opportunity along the way. Better be safe than losing your hard earned money. Know when to HODL (hold the coin) and when to let go. If you invest only the money you can afford to lose then you become less emotional when trading.
Pick a strategyDCA (Dollar cost averaging) is a powerful way of playing the game. When I was entering the market in the beginning, I always tend to put it all in and get stuck if the market is down. We can never 100% predict the top and bottom. By doing DCA it helps me gain the most of my investment - no matter if I DCA up (taking profit) or down (buying).
Keep reserve fundsAlways keep some some liquidity on hand in your portfolio, because you never know when there is opportunity to buy. I always keep at least 10% stablecoins on hand.
Pro tip: Also do your own research on which stablecoin to pick. They are differently backed and thus have different risks when using them as storage. Here is a list of the most used stablecoins.
Be aware of the risksRemember, as much as the crypto market can give you, it also can take it away from you.
Always take profit (and sometimes a little loss as well), manage your risk vs reward.
Lastly remember why you want to be in crypto the first place and set your goals. Hope what I shared will help some of you newbies out there joining the space and achieve your financial freedom. Cheers!