Our 5 cryptocurrency predictions for 2019 and beyond which is great news for crypto investors. This implies that they have to take the right cryptocurrency investing decisions. This article can be helpful as it features 50 cryptocurrency investings tips in 2019, 2020 and beyond. Interestingly, most of these cryptocurrency investing tips are well known by crypto investors ‘rationally’ but when push comes to shove they forget about them and take investment decisions based in an ’emotional’ way. It has quite some of our 100 investing tips for successful long term investing and is inspired by Tsaklanos his 1/99 Investing Principles. Our article with 50 cryptocurrency investing tips can serve as a checklist for investors at any given point in time.
Blockchain is here to stay. It is the technology that is called “the internet of value”. While the internet created a place of info exchange, Blockchain records and exposes transactions in a way that services can make use of it. Think of notary services, payment systems, barter services, escrow services … the traditional internet did not bring those services to a better state, Blockchain will.
Note that our focus in this article is on investing in cryptocurrencies which is a subset in the broader world of blockchain investing. Also note that this is the type of knowledge and investing wisdom that we normally only give to our premium crypto investing members. Many of the tips in this article were created and shared in the restricted area in August of 2017 to ensure our members stay ahead of the game and are among the crypto investors that outperform.
The 10 Most Important Cryptocurrency Investing Tips, Always
Let’s start with the basics of the basics when it comes to cryptocurrency investing tips. The first 10 cryptocurrency investing tips are here to say, at any point in time do these 10 cryptocurrency investing tips apply to any investor. They are also more specific given the nature of cryptocurrencies.
Cryptocurrency investing tips # 1: Blockchain must be part of your portfolio. Do not overreact though and take positions in a gradual way. It is the type of investment that could make you a fortune in 7 to 10 years from now, similar to internet 20 years ago. Take a long term view.
Blockchain is in a similar state as the internet in 2002. The hype flooded the market with many useless startups and IPO’s. 95% did not survive the dotcom crash in 2000/2001. Blockchain and cryptoland did undergo the same. That is why you have to research in order to find that very small number of cryptocurrencies and Blockchain startups to invest some money in … say the Amazon’s of the Blockchain world.
Cryptocurrency investing tips # 2: Most of the blockchain assets (cryptocurrencies, stocks, tokens) will be worthless in 5 to 10 years from now, similar to the dot com bubble. Carefully choosing your positions is imperative. Only 2% to 5% of cryptocurrencies is worth looking into, less than 1% is worth holding.
In doing so all existing investing principles ‘from the past’ do still apply to cryptocurrency investing. They are often forgotten because of the extreme volatility of cryptocurrencies which may lead to conclude that this is a ‘different asset class’ which requires different investing principles. This is a myth, and a recipe for failure!
Cryptocurrency investing tips # 3: All investing principles apply to cryptocurrency investing. They are even more important than ever before. A strict discipline for cryptocurrency investing is mandatory for long term success.
Surprisingly, even the chart analysis techniques ‘from the past’ do still apply to cryptocurrency investing. This which may comes as a surprise to many.
Cryptocurrency investing tips # 4: All investing principles as well as chart analysis techniques apply to cryptocurrency investing. Surprisingly, most if not all cryptocurrencies have clear and concise chart patterns. They serve as the basis for timing the market with great entry and exit points.
Investors seeking exposure in cryptocurrencies have to do this with basic diversification in mind. So the point in all this is to take some small positions in, say, 2 of the aforementioned 4 asset types.
Cryptocurrency investing tips # 5: Diversify your holdings over different cryptocurrencies in different categories. Choose two or three cryptocurrency categories that you will create tremendous value in this world as they solve ‘real life’ problems.
The number of publicly available cryptocurrency investing opportunities is limited. Consequently, other than cryptocurrencies, there are not many blockchain investing opportunities in the public domain, other than some crypto stocks. However, this will change, as the next big thing will be security tokens. The crypto market is in constant evolution!
Cryptocurrency investing tips # 6: Security tokens will present new opportunities to invest in great blockchain projects, especially in 2020 and beyond.
Cryptocurrencies are hyper-volatile. This may lead to the false conclusion that they should be traded or invested in a different way. Nothing is further from the truth though.
Cryptocurrency investing tips # 7: Cryptocurrencies move 10 times faster than for instance technology stocks. Extreme volatility of cryptocurrencies only imply that investing decisions need to be made faster, not more frequent.
The volatility factor has another implication: the number of trades should not go up, it should go down.
Cryptocurrency investing tips # 8: Cryptocurrencies that are highly volatile require a trading approach as per the ‘less is more‘ principle. Trading less will result in significantly higher profits provided timing a trade is accurate.
As with every high risk investment you better take some small positions and let the super growth potential work for you, which will result in an interesting result in terms of absolute value. That is far better than taking a large position with a “get-quick-rich” mindset.
Cryptocurrency investing tips # 9: Take small positions as these are extremely high risk assets. Risk hedging is recommended: take the base capital out of your investment once your position has doubled or tripled in order to retain “free” assets.
The cryptocurrencies are part of a new asset class. As they are here to stay investors should manage them as part of their overall portfolio with a clear long term strategy in mind.
Cryptocurrency investing tips # 10: Cryptocurrencies, and crypto assets in general, must be considered a normal part of anyone’s portfolio. They must be treated as one of the multiple asset classes like stocks, gold, commodities, real estate, cash.
Let’s now move on with another 40 cryptocurrency investing tips which are more generic in nature and which we can classify in more specific groups.
40 More Detailed Cryptocurrency Investing Tips for 2019, 2020 and Beyond
The previous cryptocurrency investing tips are more of the fundamentals for any crypto investor in the past and in the future. They are more typical to the crypto asset class. The next 40 cryptocurrency investing tips are much more specific and part of a specific category.
10 Cryptocurrency Investing Tips on Emotions
Tip # 11: Emotion is the n° 1 enemy of any investor. This applies more so to crypto investors because of the ultra high level of volatility.
Tip # 12: This is an individual place. The market is not here for you. Really, the market does not care whether you are nervous, anxious, depressed, disappointed, etc. You can read hours and hours news, you can talk about your emotion with an endless number of people, you can go on therapy, you can curse, shout, etc. Nobody, and certainly not Mr Market, will care about you.
Tip # 13: There is something fundamentally wrong if you feel bad when prices go down, and feel good when prices go up. It should be the opposite.
Tip # :14 Your emotional and mental game is what makes the real difference when investing. The fact that you are aware of this is the first step to success. Continue to educate yourself on this as it needs many, many years and many, many mistakes before you master your own emotions and be part of this selection group of smart and successful investors.
Tip # 15: In order to be a successful investor, you get in low. That is when ‘nobody’ talks about it. No emotions, no greed, no fear of missing out. As prices rise your profits become interesting enough to take profits off the table, and you feel good about it. If you recognize this ‘chain of emotions’ you know you are doing something fundamentally right as an investor.
Tip # 16: By far the best tool to overcome emotions is charts. Charts can neutralize emotions. They can indicate trends if you look for them. Use charts for this, and try to work on a disciplined method. You can really copy our own method if it helps you.
Tip # 17: Do not make investing decisions when markets are trading. Because cryptocurrencies trade 24/7 this investing tips should be read as ‘never decide which cryptocurrency to buy or sell, nor the exact entry point or exit point, while looking at a screen’. Make these decisions on paper, iterate your decision and insert the trades. Volatility triggers emotions, and emotions kill your profit potential!
Tip # 18: High volatility will seduce you to deviate from your plan, especially on days that where prices go up or down sharply. Be disciplined, and take decisions and implement them during low volatility days!
Tip # 19: Prior to initiating a position, ask yourself what would you do if the value of the equity you bought decreases by 50%? Are you able to hold through that drop and wait for the price to recover (that is if it recovers)?
Tip # 20: Better be in the market one year early than one day late.
10 Cryptocurrency Investing Tips on Discipline and Risk Management
Tip # 21: Identify your objectives and timeframes when trading cryptocurrencies. Traders with short timeframes and lower risk tolerance are better off scalping for smaller more frequent gains.
Tip # 22: Don’t buy cryptocurrencies after they tripled in value or right after price moving news is published. Instead wait for the cryptocurrency to come back to test support. There is *always* a retracement after any major rally. Recognize ‘FOMO’ with yourself.
Tip # 23: When deciding which cryptocurrencies to invest in, be extremely selective and only use intrinsic value creation as the criterion.
Tip # 24: Would you be inclined to sell at a 50% loss to preserve the rest of your capital? If so set tight stops to cut losses early on or even reconsider if crypto investing is the right choice for you.
Tip # 25: There is a strong correlation between all cryptocurrencies. We noticed that they move in tandem and tend to strengthen and weaken all together.
Tip # 26: Consequently, it does not make any sense to feel bad that you missed a rally in one specific cryptocurrency in a bear market or consolidation. Ultimately, they will all go up as an asset class, simultaneously, but on the long run some will go up much more while the vast majority will have muted results.
Tip # 27: Cryptocurrencies tend to be positively correlated with the Nasdaq. The major rallies in cryptocurrencies came at a time the Nasdaq was hot. This may be one of the criteria in your disciplined method to work towards a sell decision.
Tip # 28: As the editor of the first cryptocurrency investing research service in the world we receive many questions from crypto investors. One thing became blatantly clear over time: one or two day heavy price declines in cryptocurrencies tend to bring great anxiety among crypto investors. Don’t forget this: one day does not make a market.
Tip # 29: That’s why a combination of a long term focus combined with a thorough selection of cryptocurrencies to invest in based on adoption and value creation are THE most important criteria to apply, in a disciplined way, always!
Tip # 30: Did we repeat sufficiently that Ripple is the most amazing crypto startup in terms of adoption and delivering ‘real life value’ (solving ‘real life problems’) together with its XRP (XRP) token? If not sufficiently clear please read our Ripple (XRP) Price Forecast, our Ripple Fundamental Analysis, Ripple On Its Path To Become The Largest Cryptocurrency.
10 Cryptocurrency Investing Tips for Chart Analysis
Tip # 31: It is the chart that will determine an entry and an exit point. It is based on the charts that we concluded on Dec 31st, 2017, that it was time to sell. Our sell recommendation was even published in the public domain: Ripple Rises 10-Fold In One Month. Cryptoccurencies Setting A Major Intermediate Top. Many were laughing with us at that point in time, because of the hype ‘everyone and his uncle’ was buying more cryptocurrencies. One year later crypto investors sent us messages that they should have listened. Going against the tide requires disciplined and strict chart analysis skills.
Tip # 32: Following news is the antidote of chart analysis. News is a lagging indicator, charts if used appropriately can and will be leading indicators. A lagging indicator has the potential to destroy the predictive value of a leading indicator, be careful with this!
Tip # 33: Most cryptocurrencies have their own specific chart patterns. They also come back consistently over time. Respecting individual differences of chart patterns among cryptocurrencies is mandatory to take into account when analyzing them.
Tip # 34: Combining chart analysis with fundamental analysis is extremely powerful for cryptocurrency investing. An illustration of InvestingHaven’s research team does this is shown below: the long term Bitcoin price (BTC) chart show dominant chart patterns and combine this with the fundamental trends. We have a similar one for Stellar Lumens (XLM) in our Stellar Lumens forecast.
Tip # 35: Reading a chart seems simple but it really is tough to get all important insights out of a chart. Charting is the art of understanding probabilities of where a market is heading, when it might peak and when it might bottom.
Tip # 36: Only 1% of time on the chart defines great entry and exit points while 99% is meant to follow and/or prepare the trade. Let’s apply this to a 5-year weekly chart: 1% of it coincides with 3 weeks in the 5 year time period which is optimal to take a trade (buy or sell). As a wise investor once said: “timing is not everything, timing is the only thing.”
Tip # 37: Only 1% of price points on a chart are relevant while 99% is irrelevant. In a world of chart overload you have to go back to the core, and realize that only 1% of price points on a chart do matter. It is 1% of price points that help you identify dominant trends which is what it is all about for successful investing.
Tip # 38: We always have to respect the saying ‘markets can stay irrational longer than you can stay solvent‘. The only way to manage this is to stay focused on charts as long term patterns mostly reveal major tops. That’s what crypto investors have to look for: those ultimate topping and bottoming price points.
Tip # 39: Intraday charts are not for long term investors. They are only there for traders. Everyone has to make a tough decision: either you are an investor or you are a trader. In each case you need a different toolset, a different chartset, and different charting principles. The points made above apply to investors with a long term horizon, which is a bare minimum of 3 to 6 months.
Tip # 40: Reading a chart seems simple but it really is tough to get all important insights out of a chart. Charting is the art of understanding probabilities of where a market is heading, when it might peak and when it might bottom.
10 Cryptocurrency Investing Tips on Crypto Market Consolidations (especially the one in 2019)
Tip # 41: Consolidations are very frustrating for traders and investors. This is the type of situation in which the vast majority of investors show no patience. They then sell with a loss, only to find themselves chasing prices higher after a certain time period.
Tip # 42: Consolidations create a very bullish long term outlook for any asset or market. Essentially, during sideways trading, sellers tend to leave the market every time the price peaks. If a consolidation goes on long enough all sellers leave this market. That’s the ideal market condition for a new bullish trend.
Tip # 43: The psychology behind this has to do with the fact that participants are just worn out of that market, and recognize the opportunity cost they’ve had to endure while waiting for a resolution. By the time the market breaks out it’s just been too painful to remain in the trade. That’s when Mr. Market resolves in an explosive upward move.
Tip # 44: The saying goes “the bigger the base, the higher in space” which means that the longer a sideways consolidation period the more bullish power because there are less sellers in that market. That’s what’s happening in the crypto market right now.
Tip # 45: Identifying and tracking consolidations on monthly and weekly timeframes is key to identify when the new bull market starts.
Tip # 46: With the previous insight in mind it becomes easy to manage risk, see the risk management related tips above. The stronger the confirmation of a nascent bull market the higher the level of risk that is allowed.
Tip # 47: Tracking your longlist and shortlist of cryptocurrency tokens is a long term process. It may take many months, even years, before you believe a position in a specific token is justified. Use the chart and the analysis on long term trends (crypto bull market, crypto consolidation, crypto bear market) together with your longlist and shortlist.
Tip # 48: ’Bull markets beget bear markets‘. It is at the heights of a crypto bull market that buying gets saturated. Only crypto sellers are left, and it does not take a lot of sellers to take control and trigger a new bear crypto market.
Tip # 49: Last but not least, by far the most important tip of our long overview is that ‘bear markets beget bull markets‘. It is at the depth of the cryptocurrency bear market that all sellers leave, which makes place for a market to consolidate and set the basis to turn into a future bull market.
Tip # 50: The 2019 consolidation is similar to the 2015 consolidation. In this article Bitcoin’s Long Term Chart is Bullish we made this point extensively, we strongly recommend to read this. The similarities are striking!Read this very complete #cryptocurrency investing guide with 50 cryptocurrency #investing tips. Crypto investors learned them the hard way so let's use this wisdom in the next crypto bull market which is underway! Click To Tweet
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