Investing in crypto is a gamble where there is a 50% chance of hitting gold and 50% chance of sleeping under the bridge, if you don’t put your money in the right place. Sometimes it could work and sometimes it could horribly fail.However, you can increase the chances of you profiting from your position, by optimizing or streamlining your strategy.
If you thought about investing in Bitcoin, you either should be rich, to get significant profits from short term trades or else if you invest small amounts you should have nine lives, like cats and wait for the price to appreciate. You know why? Bitcoin is expensive, and if you invest in 0.0000001 BTC, you might need to burn some money. And the volatility of Bitcoin is so very less, that the profits you gain from little amount is so insignificant. As such, lets focus on the altcoins, which are much feasible to many of us.
Fundamental checklist to follow when selecting a token or coin
Project: Do a throrouh research by digging into its core purpose, technology, and long-term vision, the tokenomics before investing. Start with the whitepaper to see what problem the token aims to solve and whether the solution is practical or just buzzwords.
Team: Go through the team behind the project and look for prominent names of developers. See if they have built something phenomenal and if they have some good projects under their name. Scan for reputable investors, VCs, or exchanges support the project. Avoid anonymous teams unless the project already has a long track record.
Community strength: Good projects are backed by strong communities. And when it is an organic community people speak the truth about the project if its good or bad unlike paid shilling or bots, which promote the project.
Once you have done and checked your fundamental list you might think it is over, but wait, by doing the above mentioned activities you just saved yourself from a rug pulls and scams. But you got another step to book some profits.
Building your altcoin investment strategy
Define your goals and risk tolerance:
Before you enter the market, you have to start by asking yourself a few questions. What am I trying to get? Is it long term gains or short term profits? You consider how much you are willing to invest, you should invest only in an amount that you are wiling to lose. After all its a gamble and could go either way. In addition, you have set your risk, which clearly defines how much money you are willing to lose to gain one dollar profit.
Diversification:
Based on your strategy, you should spread your investment across different altcoin sectors such as DeFi, AI, gaming, layer-1 blockchains, and privacy coins. This reduces the impact on your portfolio in the event one sector or project underperforms. Since some are sector tokens are highly volatile while the others are less volatile, you can switch between quick short gains and long term profits.
Take advantage of market timing and cycles
Bitcoin and the altcoins prices move in sync with each other. Every four years a Bitcoin halvinghe market goes rampant, with Bitcoin prices hitting high altitudes. Altcoins follow bitcoin, you could may be set yourself for this before the halving and exit the market during the peak. Avoid buying into hype-driven parabolic runs.
Never revenge trade:
Sometime after losing money, you might want to revenge trade and get all the money you lost with one trade. However, never, act with emotion in the market. No matter whatever happens in the market, you have to stick your plan and practise patience and do not give into FOMO.
