IF YOU FAIL TO PLAN, YOU PLAN TO FAIL!
Before getting invested in cryptocurrencies, there are a few things you should make up your mind about.
There are various strategies and approaches out there and you should pick the one that is suitable for your goals, lifestyle, purse and skills.
Investing vs. speculating
What is your investment horizon? How long do you plan to stay invested and what is your return target? What is your buying decision based on?
- You did a fundamental research, you are convinced of a coin or a technology and you plan to invest long term --> investment
- You don't know much about a currency or you don't think a coin will have a long term perspective but you expect a short term sharp climb or decrease --> speculating
Market timing vs. buy and hold
You can invest passively or actively. If you are a long term investor and you think your crypto has a nice perspective there are a few good reasons to buy a coin and just keep it untouched in your wallet.
If you have the time and the essential skills, you can try to skip some "bearish" cycles by punctually jumping in and out the market (buyin and selling at the right time). The big danger is to miss the perfect moment so you might give away a lot of yield. Furthermore you have to pay attention to the fiscal regulations in your country which has to be noted if you dispose of your coins.
So if you don't have the time, the energy, the nerves and the skills for trading, it might be more relaxing for you to just buy and hold your coins.
Focusing vs. diversification
We all know the platitude "don't put all eggs in one basket". Strong diversification is often the result of the fear of not having bet on the right horse. It might be useful to diversify in a few cryptos but pay attention, if the crypto you are buying stands on a solid fundament and if there is a market for it. There is a lot of scam out there trying to skip on the crypto train, so I think it is important to focus on a few promising and innovative cryptos.
Final observation
The way you invest is not enshrined. Of course you can combine different strategies or styles of investing but you should always have clarity about whether you are investing or speculating and about the reasons you bought a certain coin or currency. It will help you to avoid losses and irresolution in difficult situations.
trade and hold, both to make money.
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