13 Do’s and Don’t’s I’m Implementing to Maximize My Crypto Profits for the next Bull Run
Posted On April 12, 2019
With Bitcoin showing signs of long term bullishness, I thought I’d reflect on the newbie me who got started in crypto sometime early – mid 2017.
I was pretty much all in NEO at $8-$10 and got pretty lucky, seeing it shoot up to $30+ Since then I was hooked and continued to build my portfolio making every mistake in the book.
Here’s 14 Things I’ve learnt since then which should help maximize my profits in the next bull run. I would have loved to tell the 2017 Newbie me these.
Disclaimer: This is not investment advice, just my thoughts on how to better myself as an investor. Do your own research as crypto is highly volatile and can be a devastating investment for the ill-prepared.
1) Take Profits – There is always Opportunity
Can you believe I can’t remember a single time I actually took profits in all of 2017.
I found myself constantly being frustrated that my coin wasn’t doing much and I’d quickly jump to another coin that had increased by 30% the day before.
I found myself only acting on two extreme points of emotion, one being fear and the other being FOMO.
Or, in most cases, I’d never act. I’d just look at my portfolio go up 30%, 40%, 50%, 100% and think it’s normal.
I’ve become more stable with understanding that it’s ok to take out some profits when the coin I’m invested in has increased to a large level.
There will always be opportunity and it’s silly thinking that this is the only coin that’s going to make me a ton of money.
2) Diversify Strategically
When I first started I was in all in kind of investor. I’d always be all in the coin that I thought was the best in all of crypto. it sounds so silly now that I thought this way considering that there is plenty of projects in crypto that are extremely promising and pioneering.
I feel much better about my portfolio knowing that I have a diverse portfolio spread across highly promising coins. In fact, with the top 10 to 30 coins, we should see 5X and beyond growth during the next bull run AT LEAST considering they’ve dropped so much since their all time high.
Apart from a few coins like Binance, EOS that have largely kept their value.
That being said, I still hold some relatively low cap coins that might be sleepers but I have a strategic % allocated for them. It’s not an all-in like I used to.
3) Volume is Important!
I’ve learnt a lot about markets and trading over the last year I realised that it’s very important for there to be volume when making trades.
The importance of this can be seen in crypto collectible or NFT marketplaces.
Decentraland is a good example where there are at least 5-20+ lands selling daily.
If this volume dries up, it’s very difficult to sell your land and subsequently you’ll be stuck with tokens that nobody wants at the time.
What will you do if you have bills due the next day and need to cash out asap? No volume = No buyers = no cashing out.
Same thing is true with coins, this is why I have moved far away from projects that have very small market caps especially when it comes to Active trading.
Let’s take Mysterium for example on IDEX/HitBTC. The market cap of this coin right now is ~ $1.85M with about $50USD being traded in the last 24 hours, (lol).
Say you have 30,000 tokens you bought a while back and you need to cash out 100% of it. Seems like the current price is $0.0785, cool, let’s just say 0.08 cents. Does that mean you’ll get $2,400USD when you sell all your coins?
Nope. Check the order books, look how thin it is.
The above image shows buy orders, meaning, these are the people that will buy your Mysterium when you need to cash it out.
The ‘Sum MYST’ shows cumulative orders so you can see that there are 31,938 Mysterium tokens people are willing to buy from 0.000016000BTC to 0.000012890BTC.
That’s a range of $0.08 to $0.065. Sure there may be some hidden orders but you’d probably see a final cas out at around $2,200.
This matters more when you have larger holdings. Imagine if you had $10k to cash out?
4) Being Openminded – Never Discounting Anything
Closed-mindedness can absolutely kill your profits when investing.
Imagine all the people that gave more than 5 minutes to learn what Bitcoin was in 2011.
It’s so easy to laugh at another project like Cryptokitties, just because it seems silly to you. There are people that explored the project, gave it their attention and subsequently made a lot of money while others just laughed and discounted it completely.
There have been plenty more crypto collectable projects since Cryptokitties. Decentraland has seen people buy lands for thousands of dollars and even $100k+.
These were not one off transactions, people have spent millions of dollars on their portfolio and continued to spend and buy digital land in the marketplace.
In the last 15 days alone we’ve had a $37,000 sale and plenty $15-$20k sales.
It could have been so easy for me to laugh and not look into buying digital land but after watching some content and understanding why people were giving it value I saw there being some opportunity. I made it a point to never discount any project until I’ve read many points of views on it.
Decentraland is VR platform where you can buy digital land and build whatever you wish within the build parameters. There are only around 45,000 lands you can buy and over 40 projects already dedicated to build on the land not to mention large investors who are involved like DCG group.
Again, I had always been an all in kind of investor. Anytime I wanted to buy into a new project or sell my holdings of a current project, I would sell everything.
Now, I implement ladder buying and selling.
So if I want to sell and profit take, instead of selling the whole thing I will sell about 10 to 30%. This number changes depending on the situation, if it’s a substantial increase for example the coin has gone up 200% in a single day then I’ll take out a lot, (50%+), because rarely are these moves sustainable.
Let’s look at the below bull run chart of BTC in late 2017.
The first red circle starts at 16th May 2017. If I implemented ladder buying and selling I would have sold 10-20% at each red circle. That way I would still have skin in the game after each sell and if it tanks, I would have realized a good amount of my profits.
This creates a win-win situation, so whether the coin goes up or down I will benefit in some way as I hold both sides on the position.
6) NFT’s/Cryptocollectibles Have a Strong Future
NFT’s are tokens that represent crypto collectables.
Since cryptokitties, the NFT world has blown up and there are plenty of projects that are bringing blockchain gaming to crypto.
Animoca Brands have partnered with Atari, Formula 1, major League Baseball, and other notable brands to bring some parts of their experience to blockchain.
The NFT space has seen people spend millions of dollars on collectibles, from trading cards to figurines and it’s becoming more and more clear that this industry is going to be one of the front runners in blockchain.
Last bull run there was just a handful of these games but I noticed people that became crypto rich, would easily spend thousands of dollars on simple game items.
Therefore, my holdings now have a large portion of NFT’s I believe will bring me good returns as the crypto world grows.
7) Following and Understanding Basic Market TA, (Technical Analysis)
TA gets a lot of hate in discussion boards but math seems to always somehow find a way in our lives.
Knowing simple technical analysis, at the very least long term trends, should shed some light as to which general direction Bitcoin is moving at the moment.
Of course it’s not going to be 100% right but it will increase the probability that trades will be more favorable. Which should equal, more right decisions.
Bob Lucas does a great job going through Bitcoin Cycles. This gives us insight as to which part of the cycle we may be at at the moment.
Understanding supports and resistances that have held for a very long time should shed light on when to be cautious when buying and when to be fast when selling.
Again this is not going to mean every trade will be perfect but it will and should allow me to make more right decisions which will ultimately better my portfolio in the end.
8) Understanding Cycles
This crosses over the previous Point but understanding that things don’t go up forever. Eventually hype,excitement, and FOMO dies down.
I have noticed when things move way too fast they come down pretty hard. Bitcoin in December was a perfect example of this where it doubled and tripled in price over the span of just a few months.
Did it continue to do this? No. What followed was a 1 year+ bear market.
9) Never FOMO
FOMO dulls your rational thinking. It is probably the single emotion that has lost me the most money on my trades as I wouldn’t look at it a larger perspective at the time.
There will always be opportunity in crypto so if the trade doesn’t meet your criteria, then don’t worry.
No need to jump in coins that have been pumping for days, weeks, and hoping they’ll continue to go up.
10) Stay away from Pump Groups
I always knew these were shady but for some reason I just had to give it a shot.
I bought a few recommended tokens but when trying to cash out I basically got dumped on.
Pump groups rely on creating volume which easily spikes the coin but since the volume was created by the signallers, when you need to take your money out there’s no more volume and subsequently you lose money when cashing out.
Remember, when you buy, someone else is selling. When you sell, someone else is buying. Everyone in the crypto market is your competition. When you sell and profit-take, someone has bought and for them to make profit they need to sell to someone else.
Pump groups usually sell to you so it allows them to profit take but who are you going to sell to?
11) Never be too Attached to a Coin
Again, emotion is great when used in the right places in life but I’ve learnt to keep it out when dealing with money.
Just because you love a project doesn’t mean it’s going to do good.
Always be critically thinking over whether the project is continuing to build on value. Is there signs of lost steam?
Being vigilant will show any red flags early so scams can be spotted early.
12) Wallet Security is Priority
Probably the most important thing when it comes to investing in crypto.
Paper wallets and hard wallets are probably the best way to keep your crypto safe.
Nano ledger and Trezor are great solutions to look into.
But this requires you to know where your security keys are and manage your own security.
Exchanges are often seen as a risky place to keep your money and we have seen a few that have been hacked or have scammed people over the years. I’ve learned to take this seriously. Bepre-emptive as there’s no space or room for being re-active with your finance security. By then, it’s mostly all lost.
13) Always Be Active
A bull market had a lot of investors turn away from crypto.
They held their position and their portfolio now is much lower than it used to be.
Many others have continued to be active, whether it be day traders that have made a lot of money shorting and longing the market by understanding and implementing good technical analysis.
Others have explored crypto collectibles and have made hundreds of thousands of dollars in 2018.
Some have created blogs, youtube channels and other platforms that they can grow and have a voice to build connections and create more value.
The more work you put in the more money you will tend to make.
Just because the market is down fish doesn’t mean there is no opportunity.
That’s it! The last two to three years have taught me first hand about both a bull and bear market and how people react, what opportunities come by, etc.
Good luck and I hope you all make a killing in the next bull market!
About The Author
Mateen is an Investor in Decentraland and an avid Digital Land Flipper.