5 Solid Things to Know Before Beginning Crypto:

5 Solid Things to Know Before Beginning Crypto:

1. Have the Basic Fundamentals:

You need to know more about the market and how it works. Understand that:

A. The market doesn’t work the way it’s portrayed on social media.

B. Big institutions are the ones that move the market.

C. The market is heavily influenced by algorithms and high-frequency trading.

D. These algorithms don’t analyze patterns; instead, they respond to the behavior of buyers and sellers, such as:

a. Are buyers more aggressive or passive?

b. Are sellers more aggressive or passive?

c. Who’s in control of the price?

Algorithms react based on these factors, not patterns.

 

2. Keep your crypto involvement private. _ Advice from a 25-year-old wealthy Trader.

Don’t share your crypto interests with others. Holidays will come, and people will ask about your source of income.

How to Respond:

Simply say you don’t do anything significant. Avoid mentioning crypto or making money online, as:

A. Most people won’t understand

B. They might become envious or hurtful

C. It won’t benefit you

Let Your Success Speak for Itself.

Focus on achieving success and let your actions demonstrate your accomplishments.

In a few years, when you’ve acquired luxuries like a dream car or property, people will take notice.

Mindset Matters;

Ninety-nine percent of people won’t have the mindset to accept and understand how you broke out of poverty.

 

3. Diversify Your Investments to Minimize Risk:

Many people have lost significant amounts of money in crypto, hoping to become billionaires. While it’s still possible to achieve success, a common mistake is: Putting all your crypto into one trade. This approach risks losing everything, as you’re betting your life on a single trade and a better strategy is to invest only 10% of your earnings in crypto. By doing so:

A. If the investment goes to zero, you’ll only lose 10%

B. You’ll retain 90% of your earnings

C. If the investment increases significantly (e.g., 100 times), your return will be substantial

Key to Successful Investing:

A. Reduce downside risk

B. Maintain potential for extremely high upside

As an investor, it’s essential to balance risk and potential reward.

 

4. Mindset Shift Before Venturing into Crypto Trading:

Before starting crypto trading:

A. Ensure you have extra savings for comfort after investing

B. Educate yourself about trading through:

– Training

– Simulation

– Developing a strategy

C. Test your strategy without risking real money.

D. Abandon the “get rich quick” mindset, as it may lead to failure.

Key Principles:

1. Start small

2. Study and learn

3. Be prepared to lose money and learn from your mistakes

 

5. Buying Bitcoin Isn’t Investing – Warren Buffett. He distinguishes between investing and buying/selling assets:

A. Investing: Holding onto an asset for its inherent value, generating returns through dividends, interest, or rent.

B. Buying/Selling (Trading): Purchasing an asset with the intention of selling it for a higher price, often in a short timeframe.

In crypto:

a. Buying crypto to resell quickly is not investing; it’s trading.

b. Investing in crypto means holding onto it for the long term, potentially generating returns through dividends, staking, or appreciation in value.

Buffett’s perspective highlights the importance of understanding one’s investment strategy and goals when engaging with crypto assets.