Let’s dig a little into the individual investing psychology that lies at the heart of every investing strategy, because after all it is one thing to understand the psychology but it is another thing to actually counteract your own emotions or the emotions of the market and create successful decision-making processes that lead to profits, in an attempt to hopefully save you from costly investing mistakes.
Elcryptodoc his research has concluded that new crypto investors get attracted to the space by rising prices. When Bitcoin and Altcoins moon, new people come flooding into the market while hearing that their friend or their friend’s friend made a ton of money just by putting their money into a coin. However, when prices go up this is the most dangerous time to buy. While investing into an uptrend can give investors the feeling of safety and works if you recognize the trend early enough this still is a dangerous strategy since most pumps end with dumps.
When you get into a coin you need to know how long you’re willing to hold it for and what expectations you have. You need to have a Pre-Plan when you are planning to sell coin at least in stages. For example, when you buy at one dollar, you can think, when this is going to hit two dollars I am going to sell half of it and leave the other half in. These are simple mental models that help you overcome your emotions.
If you want to succeed in crypto you have to formulate strategy for picking winners. Elcryptodoc believes, these are best investing strategies to succeed in Crypto:
Long Term Strategy
This strategy can be implemented on tokens you can totally forget about after investing in it. These are tokens you have high confidence in that when you check up your portfolio in ten years you were happy you were holding onto these coins. This is usually a strategy Elcryptodoc only uses for the highest market caps and most trusted assets in crypto like Bitcoin and Ethereum.
Short-midterm swing trades
This strategy purely for the purpose of speculating on price & whether or not it will rise or fall in the future. Often times, you can use this strategy on hot narratives. For example, when a certain coin explodes into prominence like Chainlink did in 2020 what happened after was that anything that was like Chainlink exploded too. In case Chainlink was an oracle project, so all the other projects that were trying to be oracles were growing rapidly on the hype for a short term. After the hype wave died they all fell down at a rapid pace too. So, a short-mid term swing trade is often based on trending narratives in crypto. The most important thing to understand here is that narratives can shift quickly. The one month the narrative can be all about NFTs and the other month about Play-to-earn gaming for example.
Most people think that once you are in Crypto, everything has to be allocated but keeping a significant amount of money in stable coins is actually a smart thing to do. A market crash is always around the corner and you want to have money to buy these market crashes. Historically, buying crypto market crashes has made people absolutely astronomical wealth. So, to have stable coins for these kind of moments is critical to get the most money out of this market, says Elcryptodoc.