10 Crypto Commandments that every newbie should learn before going knee deep into the crypto space. These commandments will help you navigate the treacherous waters of the cryptoverse.
Commandment 1: “Not your keys, not your coins”
Commandment 2: What goes up, comes down; what goes up fast, comes down faster
Did your crypto shoot up 50% in a day. Don’t chase it. Anything that goes up that fast comes crashing down. This is especially true for Crypto. If you have a favorite project in mind that you know in and out about, have an entry price in mind and wait.
Read Commandment 4.
Commandment 3: FOMO burns, FUD kills
If you FOMO (Fear of Missing Out) – you will burn your hands. If you FUD (Fear Uncertainty and Doubt) you will kill your chances of good timed trade.
Commandment 4: You cannot time the market
Have a strategy on your entry and exit price points. Play according to those without heeding to the markets temporary volatility. Do not change the strategy unless you become aware of some new information. Remember – you cannot time the market but you can always formulate a strategy and stick to it. Don’t cry if you lose on a big move later as long as it is as per your entry and exit strategy. This will help build your trading acumen and confidence.
Commandment 5: Be a Contrarian
When everyone says it’s time for the moon, probably it’s the opposite. Focus on fundamentals not hype cycles. If you believe in a project with strong fundamentals and a real use case it will catch up at some point. It may not have double digit shoots in a day, but it might have a gradual uptrend which could be more meaningful and stronger compared to sudden ups and downs of unreliable coins.
Commandment 6: Influencers will dump their bags on you
Thinking about buying a crypto because your favorite YouTuber said it’s going to the moon? It is probably going to the moon for that YouTuber not you. It is highly probable that your favorite influencer loaded up the bags first before talking about the project and simply looking to dump them on clueless suckers. They always hedge with stablecoins while they pump talk shitt coins.
Learn from everyone but never let others make your financial decisions.
Commandment 7: It is a zero sum game
For you to win, someone has to lose in this trading business. For example, when people were selling XRP for $3 there were people who were buying it at that price. What happened to them now that XRP is at 20 cents? They got burned because they acted with FOMO (remember commandment 3)
Commandment 8: You cannot catch all the waves
There will be a lot of buying and selling opportunities that will pass you by. Let them. If you keep chasing every wave – you will never learn to surf. There are 100 shitty projects for every one good project, even with that count, you are looking at over 50+ good projects. You can pick a few of these good projects and learn about them deeply to make the right moves. If you try to chase all 5500 you end up getting buried with information overload.
Commandment 9: Pour your heart into your favorite projects but trade with head
There will be projects that you will relate to. It could be because of the problem it solves or the person behind the project or the potential for social change, whatever it is don’t hold yourself back. Pour your heart into the project, support them however you can and be the voice for the project. But when you sit to trade – always use your head, never your heart. Ignoring this rule could bring peril.
Commandment 10: DYOR, DYOR, DYOR, DYOR
Do not listen to these commandments, do not listen to some influencer, do not listen to the hype and certainly do not listen to the mainstream media. If you have to listen, listen, but take action only after you Do Your Own Research (DYOR).
There you have it folks – we hope all or some of these commandments help you.
George Carlin could argue (NSFW), in spite of our protest, that the above commandments could be combined into a shorter list, but we will leave that to him and we will stand by our 10 commandments.
Thank you for reading and sharing this article. Stay safe and healthy!
Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.
We do not endorse or guarantee the accuracy of the information and claims made.
All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.
Get ‘Week in Crypto’ news updates in ONE email.
We never spam your inbox and we only send one email per week
with updates, news, eBooks, tax updates, and more!
Get knowledge, not spam! Subscribe here.