I’ve been trading and investing in crypto since February 2021 and I’m quite new to this kind of investment. So far, so good! I can say that perhaps I’m just lucky because I can’t really attribute the growth of my crypto portfolio to my crypto trading and investing skills, it just so happens that most of my holdings are continuously growing since I got them. I’m here to share with you guys my personal experience and How to Maximize Your Profits in Crypto.
Before we begin I just want to remind you guys that this is not financial advice (NFA) and should not be taken as such. I’m just sharing my personal experience and my observation in the past few months of my crypto journey. If you need some financial advice on investing, please consult a professional financial advisor.
Anyway, let’s go back to the topic, shall we?
Photo by Isaac Smith on Unsplash
Only Invest What You Can Afford to Lose
In my observation, one of the best things that I did, in order to maximize my crypto profit, is to only invest what I can afford to lose. In doing so, I was able to withstand the huge dips that happened in the past couple of weeks.
Imagine if you invested money that is allotted for your next month’s budget such as your rent, and then the market dipped, you will be forced to withdraw the money from the exchange right? And if the market is currently dipping when you withdraw, then there’s a high chance that your portfolio is in the red.
Your profit might be on the minimal side, breakeven, or worse, your whole portfolio might be at a loss.
Investing in crypto is like investing in startup companies especially if the crypto that you bought has a strong use case and a fantastic and reputable dev team and TONS of solid partnerships with various businesses.
Just like stocks, unless you withdraw your funds, then it’s just paper loss. However, if you withdraw your funds, then the losses will be realized.
And also, by only investing what I can afford to lose, I also get to avoid making emotional decisions and getting so stressed about the ups and downs of the chart.
Always Do Your Own Research (DYOR)
I’m following crypto and other financial and technology news, some traders with a huge following and don’t hype, Twitter accounts of the crypto companies that I bought and will buy, etc.
And with all the information that I gather, I fact-check those by Googling them. And with all the data that I get, I make my personal decision on what to buy and to which level.
I try my best to avoid ‘FOMO-ing’ because I like to be responsible for my own investment decisions. This way, I have no one to blame in case I make a wrong decision except myself.
Having said that, you will see nowadays a lot of social media pages such as FB Groups, Twitter accounts, Youtube videos, hyping up various cryptocurrencies. Be very very careful in listening to anyone. This applies not only to crypto investing but also in almost all facets of life (not just financial).
I also FOMO-ed in because I listened to some of my friends who are also in crypto and bought some coins that I didn’t read much about. Ugggh!!! I will not do it again for sure. It’s not really their fault though, it’s mine. I’m the one who clicked on the ‘Buy’ button and not them.
Always Do Your Own Research (DYOR). Be skeptical and inquisitive about everything that you will hear from people especially if it’s about investing your hard-earned money.
Protect Your Investments
Regardless of what you’re investing in, you have to learn how to protect your investment. When investing in crypto, the best way to maximize your profit is to not lose them first.
There are sooo many scams happening on a daily basis in the crypto world targetting newbies like us. And the best way to protect our hard-earned money is to learn a variety of ways to protect our investments.
Since crypto trading and investing are being done online. There are some basic measures that you can do to maximize your protection.
- Use hardware wallets such as Ledger and Trezor, etc.
- Activate Two Factor Authentication (2FA) on your Online Accounts including Exchanges, Wallets, EMails, etc
- Ensure that you’re using strong passwords
- Install Anti-Virus and Anti-Malware on your Laptop and Mobile Phone
- Do not use an unsecured internet connection
- Avoid clicking on any links that you’re unsure of
- Do not give your seed phrases to anyone (Very important to remember)
- Be aware of the ongoing phishing scams, hacks, etc. Knowledge is power!
Photo by Dimitry Anikin on Unsplash
Learn from Your Mistakes
My first few months in the crypto world were definitely not a walk in the park. I did, of course, just like everyone else, incurred some losses and some minor and major mistakes.
Since I’m really determined to learn more about crypto trading and investing. I always observe my actions and I try to learn from my mistakes.
One of my biggest mistakes is not being able to stay put. I did a lot of ins and outs which made me lose my precious uber-low positions in exchange for a small earning. I know that there is nothing wrong with taking profit, but looking back, if only I held, the gains now would have been so much more. But there’s no use in crying over spilled milk, right? All I can do is to learn from it and move on.
I also ‘FOMO-ed’ in some crypto and did not do my own DYOR when I was starting and most of my biggest losses came from my ‘FOMO’ decisions. Luckily, it got offset by some of my gains.
So now, I try to avoid any social media accounts of people or groups of people who just hype crypto without any solid fundamentals. Personally, I can’t take huge losses that’s why my strategy is to be as conservative as possible unless if I really believe in something, then I will take a bigger risk but I seldom do that though.
Diversify your Portfolio
One of the reasons why I was able to withstand the dips that I have experienced in the past few weeks is that I diversified my portfolio by placing funds in multiple cryptocurrencies with strong fundamentals.
In my experience, there are pros and cons in doing so and one of the pros is that you get to withstand dips since not all of them will go down to the same level.
One of the cons is that you want to be able to gain as much as the person who placed a bigger chunk of his fund to the crypto that has gained so much.
But here’s the thing though, no one knows which crypto will gain so much. Even with all the strong use cases, all the partnerships, etc, the crypto is still subject to the market movement.
And knowing this, I prefer to diversify my portfolio to become more resilient in huge dips.
Part of my personal diversification strategy is to also sign up with multiple exchanges. As of now, I have accounts in the following exchanges, by the way, these links are affiliate links. I will earn a small commission if you use any of these links to sign up. But of course, you have the option not to use any affiliate links.
And by the way, before you click on any of the links, please be aware that crypto trading is considered very risky mainly because it’s a new thing for almost everyone and at the same time, because of its volatility. Again, this is not financial advice (NFA) and should not be taken as such. Please consult a professional financial advisor if you need investment advice. DYOR!
Binance – This is the first exchange that I signed up with because it’s not only the most popular, it’s also the biggest crypto exchange in the world (as of the time of writing).
Kucoin – After a few months of being in Binance, I realized that there are still a lot of cryptos, especially new ones that are only available in Kucoin. Thus, I signed up with Kucoin so I can also buy other cryptos that are not found on Binance.
Gate.io – Just like my reason for signing up with Kucoin, I also realized that a lot of other low-cap cryptos are available in other exchanges such as Gate.io. I just signed up recently with them and I have not done any trades yet as of the time of writing. I will update this post once I have more experience in using Gate.io.
Crypto.com – I only signed up with Crypto.com to get their Visa Card but I have not submitted my supporting document yet for address verification (still waiting for it to arrive from the bank).
Set Targets and Take Profits
As much as I want to HODL for life, I don’t know what the future holds for crypto and for myself, and having said that, I do take profits every now and then because of two reasons:
I take profit to further diversify my portfolio. I move the profit that I gained from the main exchange that I use which is Binance to invest in low-cap crypto that is available in other exchanges that I have mentioned above.
I also take profit to enjoy the gains (spend). Although I seldom do this, most of the profit is reinvested back into my holdings. My ultimate goal this year is to be able to take out the initial capital that I have placed in crypto.
Photo by Michael Longmire on Unsplash
Learn Other Ways to Earn from Crypto
Trading or buying and selling is not the only way to earn from crypto. There are also a lot of other ways to earn from your cryptocurrency investments and just like any form of investment, these have varying risks of course. Some are even more risky than trading and some of course have lower risks.
Binance has a savings feature where you can park your crypto to earn some interest. Keep in mind that it’s not available to all crypto though.
Aside from putting my crypto on savings, I also staked them on Binance and on other platforms such as Yoroi Wallet for $ADA and Terra Station for $LUNA.
Create a Strategy Plan
Before you join the crypto bandwagon, I suggest that you create a draft of your crypto strategy plan. It doesn’t have to be very elaborate or grand at first.
When I started, my strategy plan is a basic list of information that I needed to do, before, during, and after I invest in crypto. And this includes:
- List down potential crypto to buy, their website links, social media links, charts, etc
- Understand what it’s all about and try to get the sentiment of the market toward the crypto
- Identify possible entry points based on the available data that you have
- Set target exit points for profit-taking
- Identify an amount I’m comf0rtable on holding for a longer period of time
After three months, my strategy plan branched out to other forms of earning from crypto such as savings, staking, yield-farming, etc. It has naturally diversified because as I go along, I’ve learned more and more about crypto. And I try to find ways how to further diversify in order to mitigate the risks associated with crypto investing.
Do Not FOMO
I know that I have mentioned this already earlier but I’m just mentioning this again to put emphasis on it.
The biggest risk in FOMOing is that, by the time you learn about crypto that is being hyped, it might be already at a very high level and there’s a huge tendency that you might be dumped on.
Losses that you might incur in FOMOing will eat up the gains that you have accumulated. I have learned this the hard way hahaha because I made this mistake. I FOMO-ed a lot during my first month and it ate up my gains.
Always DYOR my friends. If crypto doesn’t have a strong use case, doesn’t have a development team with strong credentials, and doesn’t have strong partnerships with multiple businesses then please please please tread with caution.
I know that some cryptos are gaining so much even if they don’t have the things that I have mentioned above. But think about this, what will make them continue the price rally if there’s no stable foundation to start with? Again, always DYOR and learn how to protect your hard-earned money by making well-informed decisions.
There are so many ways to maximize your crypto earnings and I believe that there will be more ways that we will discover in the future as the crypto industry continues to evolve and progress. There’s so much development going on and the best way to continue earning from your crypto investment and to avoid losses is to keep yourself informed with all the developments that have been going on.
Who knows, some crypto might be deemed obsolete in a year or two when new and superior technology gets introduced. It’s just how things work. We continue to evolve and we continue to find solutions to our worldly problems and new products and services will be introduced to meet those ever-changing demands.
Again, before we end this post, always DYOR! NFA. Your hard-earned money is your personal responsibility. So, take good care of it.How to Maximize Your Profits in Crypto Click To Tweet
David @ Filled With Money says
It’s absolutely amazing just how much more mainstream cryptocurrency gets every year. I don’t like how a lot of people just talk about the price of cryptocurrency rather than the actual usage that the revolutionary technology that goes behind each cryptocurrency that offers unique features.
Still, the more people who talk about it, the better the crypto world is.
Thrifty Hustler says
That’s so true. I think for most people including myself, this is the first thing that got me interested. However, as time goes by and the more I read about it, the more I get excited about it. This could potentially changed the world in one way or another. And perhaps, this is just the beginning. Who knows, superior technology might even be discovered in the near future.