It's possible to invest in the right projects but in the wrong way. Which will lead to suboptimal portfolio performance and in some cases, loss of capital.
My goal as a crypto investor is to maximise my returns and possibly eliminates every possibility of capital loss (possibly).
In this post, I'm going to share with you a collection of how I do crypto investing. With the hope that you will find something, you can use in addition to your own investing strategy.
So without wasting any time, here're what we will be talking about.
My coin picking strategy
My DCA strategy
My HODLing strategy
My take profit strategy
My trading strategy
My exit strategy
Let's take a close but brief look at each of these strategies below.
1. My coin picking strategy
If you have been following me long enough, then you already know that I select coins to invest in based on fundamental analysis.
I try to look for projects with real-life use cases and a sustainable business model.
These projects are usually the ones I will be comfortable HODLing for the longterm, all things being equal.
However, I have funds for "degen operations" which I call my "risky dollars". I try to pick coins with at least some basic use cases to invest this money in for quick gains. But the main rationale is usually a mix of basic use cases, a high reward potential, and some instincts. And mostly these are farming tokens on BSC.
I will usually enter and exit them very quickly with a case-by-case management strategy and very minimal research. And I wouldn't recommend anyone doing it, except you know exactly what you're doing.
Some of the successful coins I have invested in this way are FUEL, KEBAB, sBDO, to name just a few.
Along the line, I might begin to appreciate their fundamentals as I learn more about them but the initial attraction was the high farming rewards.
So that's 2 coin picking strategy there. Fundamentals and pure degen.
2. My DCA strategy
A few months back, everyone seemed to be preaching DCA, DCA, DCA strategy.
But I consider the way they preach it to be BS. At least I have my own preferred DCA strategy and I feel it works best for me than what they were saying.
First, most people will recommend you buy whatever coin or token you want to buy periodically (with your paycheck for example) regardless of the current price.
The idea is that since you're holding this coin for the long term, e.g BTC the current price doesn't really matter. Why? Because it will grow eventually given sufficient time.
That's all correct!
But rather than buying periodically regardless of the price, I prefer to buy occasionally at every dip or correction.
Both strategies are all DCA but the conditions are different and that's how I prefer to do my own DCA.
Wait and buy at every correction or dip and keep adding to your existing stack.
3. My HODLing strategy
I love to HODL, it shows you're a strong hand and mature crypto investor, or does it?
But what I don't like is IDLE money.
Therefore, every coin I have decided to invest in for the long term and HODL must be put to good use by staking, farming, or lending it.
So that while I am HODLing with the hope of a future price increase, the coin is working hard to duplicate itself over time.
I never just keep a coin or token marking time in my wallet. I am working hard for my money, and my money should be doing the same for me too.
4. My take profit strategy
Seriously those BTC clowns on Reddit and Twitter will not want you to mention taking profit or cashing out but f**k them.
At some point, you need to spend your hard-earned crypto wealth or the things you enjoy.
If crypto is accepted you may pay with your favourite payment coin such as Bitcoin Cash (BCH). And if not, you may sell your crypto to fiat and settle your bills this is normal.
But for me, first I may only spend "profits" (that's why I have to make profit in the first place).
And secondly, I prefer to spend my crypto without selling them, by borrowing against them on lending platforms such as Celsius, Nexo, Compound Finance, or Venus.
5. My trading strategy
I usually advise against day trading. it's a total waste of time and money, except you know exactly what you're doing.
If you're a professional charter and experienced trader with a track record of reasonable success avoid day trading.
However, if you must trade (not day trade) I got you covered with my previous posts on the topic.
Similar to my DCA strategy, my trading strategy is extremely simple and straightforward.
It's all about buying low, waiting, selling high. At least this is what successful traders do.
But I know it sounds easier than done and reading the above posts will give you a perfect idea of how I do it personally.
The main idea to take away from here is, buy the dip or correction, set your profit target(s) and sell it when you reach there. Otherwise, continue HODLing. It's that simple.
6. My exit strategy
You need to have an exit strategy for every coin you buy and for crypto generally. Even if that exit strategy us HODLing forever.
Just have a good idea of what the end will look like and work with that in mind.
For me, it's very dynamic. If things work as aspected (which they hardly do) I will be in it "forever".
However, since things hardly work according to plan or expectation all the time, my plans and strategy are equally dynamic, especially for individual coins and tokens.
But generally, I'm in crypto "forever".
Conclusion
Crypto is extremely dynamic. Constantly developing and evolving very fast, especially at these early stages. And so should be your investment plans and strategies.
I will move along with the shape-shifting market and adjust my plans, strategies, and portfolio accordingly. And I think you should too.
But take note of the fundamentals and let them guide you. They never change.
How do you do crypto? Share with us in the comments section below.
Thanks for the tips, I am specifically looking for articles such as this as I am new to the crypto verse and I need to learn a lot from the basics.