ionicXBT
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33) You MUST Know these 10 Crypto lessons.
🕑 Added 2023-05-27 10:16:22 +0000 UTCWith many years of experience in this crypto space and dedicating several hours each DAY to learning,
I feel responsible for ensuring you DON'T repeat the same mistakes I made.
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1) It will be 2-3 years before you make money as a trader.
If you're reading this and thinking:
“Pssh, this guy doesn’t know what he's talking about.
I know me. I know I am good at managing my emotions. I’m really smart, I went really well in high school!”
The market doesn’t care what your GRADES were, how well you can discipline yourself to have COLD showers, or how fast of a learner you are.
You WILL pay your tuition to the market.
The only way to speed up this process is to directly LEARN from a mentor who already trades.
Luckily for you, I am here teaching you. You are in safe hands.
Make sure when you begin your trading you trade with small amounts.
Enough to feel pain when you lose, but not enough that you can’t sleep at night.
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2) Understand why the Bitcoin price moves as it does.
Bitcoin’s price action can be explained up into two distinctive driving forces:
1. On a LONGER timeframe, Bitcoin’s price is driven by INVESTORS and it’s adoption curve.
This includes:
- The number of users,
- How valuable Bitcoin is to use/hold,
- How developed the surrounding infrastructure gives Bitcoin an underlying ‘price floor’.
2. On a SHORTER time frame, price is determined by which direction can liquidate the most TRADERS on derivatives exchanges.
Here is a simple illustration to help you visualise:
Reflexivity if you only use one word to describe Bitcoin’s volatility it’s this
George Soros said it best
reflexivity is the theory that a two-way feedback loop exists in which investors' perceptions affect the market environment, which in turn changes investors' perceptions.
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Put SIMPLY, higher prices beget higher prices, and lower prices beget lower prices.
Why does this occur?
Because reflexivity is foundational to the nature of Bitcoin, as no other asset on earth derives such a significant portion of its valuation from its own NETWORK effects.
Network effect = total number of users of the network
As markets are future-looking (people are trying to PREDICT what happens) the market is collectively deciding what the future adoption of Bitcoin will look like.
But because Bitcoin’s main use case is its ability to make money through speculation, it creates this two-way feedback loop:
This is why we get really big PUMPS and subsequent big PULLBACKS.
This is the base level understanding you need to have.
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3) ‘Alts are dead and they will never pump again’ simply means it’s time to buy.
Altcoins pump because humans are GREEDY.
Bitcoin leads the rally at first. It makes news headlines as it breaks old ATH’s.
People get excited but annoyed that they missed the big rally.
As humans do, we look for the ‘next big thing’.
What will that thing be?
ALTCOINS.
It doesn’t matter if the coin is bad or good, as long as it seems legit to newcomers. Human nature hasn’t changed and likely won’t ever change.
Because of this, the cycle of ‘alts are dead, they won’t pump again’ to ‘buy alts for financial freedom, moon time!!’ will continually play out.
As a trader/investor, your goal is to identify PEAK fear and PEAK greed. It is in these moments that the greatest opportunities present themselves.
Buy when people are chanting that alts are dead.
Sell when people are chanting about how their grandparents are now buying altcoins, and looking at all the islands they can buy.
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4) STACK CASH, THEN INVEST SERIOUSLY.
Unless you have 5-6 figures+ in Bitcoin, your focus should be on increasing your income.
Because you’re not going to get rich off of your $2000 Bitcoin investment.
‘B-but Bitcoin is going to $500,000!!!!, A-and-moon lambo!’
You spend all day looking at the Bitcoin chart, HODLing your $3000 for dear life, and turning it into $35000.
Even if you're finding small altcoins with large upside potential (20-100x+) You still need capital.
The more money you have to invest the EASIER it is.
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5) Diversification in crypto is a myth.
TRADITIONAL diversification is a great tool for reducing risk, as you allocate your funds to investments in different industries, instruments, and other categories.
For example,
when you buy stocks you may allocate to FANG stocks, as well as the energy industry, and also stocks that perform well in market declines (food, consumer staples, etc) to reduce risk.
Too many investors believe this same concept works in crypto.
Truth is, it DOESN’T!
99% of alts are driven by the same macro catalyst (normies entering creating an alt season), and also act as a high beta to Bitcoin’s price movements.
In an alt season (which is what investors hope for when buying alts)
EVERY alt pump regardless of if it’s bad or good.
When 99% of alts all move relatively the same, diversification simply adds issues
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6) Do you need leverage in Crypto?
To answer this question, you need to be real with yourself, and ask 'Why am I needing more capital to trade with?'
If the answer is: "I have a profitable strategy that I have tested for 6+ months and I wish to reduce my counterparty risk by using leverage so that I can free capital up to be used in other ventures" then the answer is, YES use leverage
If the answer is: "I want to trade with more to make more profits" then the answer is ABSOLUTELY NO
Leverage is not a tool used to trade with MORE, it's actually a tool used to trade with LESS.
If you're worried about not making enough profits from your trading, then increase your income.
Leverage, for the sake of leverage, is the single most harmful tool you'll ever come across in your trading.
Leverage essentially increases emotional toil, stress, gambling chemicals like dopamine, and the desire for quick riches.
The emotional turmoil of trading with $100 using 10x leverage, and $1000 using 0 leverage is much worse for the former.
And the entire goal of trading is to reduce emotions, so using leverage is the exact opposite thing that helps you in 99% of cases.
DON'T USE LEVERAGE UNLESS YOU'RE PROFITABLE WITHOUT IT
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7) The key to getting rich is to combine solid cash flow with capital multiplication avenues.
Capital can be multiplied through various methods.
Most people have little to no creativity or work ethic and thus just look to Crypto to grow their money.
The ones who see the greatest success in life and in achieving financial freedom, invest their money not just in unique ways, but in a large degree of ways.
You need a method to create wealth (income), And you need methods to multiply this wealth CRYPTO.
And you need to focus intensely on both income + investments.
Crypto is a great method of creating wealth, but YOU NEED something coming in as this place is full of opportunities
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8) Don't be a Crypto loser.
Losers: "Let me try to figure this out myself!"
Winners: "Who has already solved this problem?"
When you spend money to invest in education like this you're essentially purchasing that person's mistakes and compressing the learning time for yourself.
In Crypto, there is an ENDLESS amount of mistakes that every trader has had to make prior to becoming profitable.
The same can be said for investing.
This is why good trading requires years to learn.
There are simply so many mistakes that need to be made, and learned from, before you're in a position where your correct decisions outweigh your incorrect ones (and you become profitable)
If you choose to take the 'lone wolf' path to trade, it's 2-3 years before being profitable.
If you choose to learn directly from my mistakes, the process is a lot QUICKER.
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9) It's not about WHAT you buy, it's about WHEN you buy it.
If you haven't noticed by now, Crypto as a whole is very much correlated to the price action of Bitcoin.
However, even with this knowledge, most newcomers fall for the false mindset of
- 'What is the next 100x altcoin!"
- 'Which coin can I buy to be set free!'
- "If I just buy a good coin it won't matter what price I buy it at! Just as long as I own a good coin!"
The truth is,
if you magically buy an altcoin because it's 'good', without a proper strategy for when you bought it, the returns you'll achieve will be 8 out of 10 times the same, or underperforming the rest of the market.
To outperform the benchmark in Crypto you need to have an effective strategy like the ones i teach.
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10) How to always stay ahead of the next big societal trends/innovations
Bubbles are actually your best friend:
Bubbles are periods of time where the valuations of an asset far exceed its underlying value.
They reflect an intense underlying enthusiasm for what the project/company/asset class is building.
- Bubbles act as a magnet for talent from many different industries who look to build companies in the sector to capitalize on the boom.
- Bubbles typically represent technology that has the capacity to revolutionise the world, bringing in revolutionaries who reshape entire industries.
- Bubbles related to new technology ALWAYS occur for a reason. Hype is rarely unwarranted, it’s just too early.
It’s for these reasons that you need to get involved, and the process for doing so is rather simple:
- Notice a bubble in a particular asset class - Allow your curiosity to run wild - learn the basics
- Don’t FOMO, simply continue to research and allocate a small sum of money
- Eventually, the bubble dies down, it is here where you begin to accumulate positions in projects with the best teams/founders
- Don’t let several months/years of bear market scare you off - as long as the magnetic effect of talent entering the space continues, you’ll be sweet.
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If you’ve read this far,
I GUARANTEE you have just increased your profits for the next bull run immensely.
You have done yourself a major favour, so congrats.
This is what I wish I had known earlier and would have maximized my profits, but I learned this through surrounding myself with smarter and more intelligent people.
@ionicxbt
Comments
I have made close to $200k in the last bull cycle, but then lost it all during the bear market. I was using twitter & youTube to learn about the 10X & 100X. I never dig deeper into the projects I invested in which was a mistake also never took a profit ( paper money). I was scared to sell and save some profit thinking it will go even higher.
I learned lesson 6 the hard way. Glad to have it read it here to reinforce what I've experienced. Thanks.
