Here are the top 5 cryptocurrency lessons from Chris Dunn.
Plan your trades before pulling the trigger. Don’t just throw your money at a cryptocurrency because the price is going up. It might sound cliche, but buying low and selling high is the best strategy to practice in investments but there are still many people who invest emotionally. Don’t just buy on a bull run. Plan your target price before you invest.
Stop over-trading. Great investors spend a lot of time researching and little time trading whereas poor traders spend little time researching and lots of time trading. Chris suggests that you only need a few great trades each year to make a great profit. Do not day trade, rather practice swing trading.
Don’t pick tops. This means that you shouldn’t get caught up in the hype of a popular cryptocurrency. Do your own research about each coin/token and only invest in the ones that you really believe in and want to invest in long term. Don’t look for someone to make a trade for you.
Manage your trade with no regrets. Every time you make an investment set a target price (a high and a low). Be sure to remove a portion of your profits or losses out of that cryptocurrency once your money has hit that target price. This way, no matter if the market goes up or down, you can be at ease with your systematic approach. Chris gives an example of how he invested in Stratis and his investment experienced a 1,000% raise. At that time, he took out a portion of his profit. After this move, the price of Stratis continued to sky rocket. Rather than feeling negative about taking out his money he felt positive about the move because at the end of the day he had already made a huge profit and the of portion that he left invested in Stratis experienced another price jump. In short, take something off the table after you meet your target price.
Don’t chase the hype, anticipate it. Many people will see that a crypto coin/token has jumped up in price and pour their money into that currency only to see it experience a correction. And we see that those people are not adhering to the most basic principle of investing: buy low, sell high. In many cases you want to go against the grain of the market. Warren Buffet once said, “Be fearful when others are greedy and greedy when others are fearful.”