Why is Not Everyone Striking Gold by Investing in Cryptocurrencies?
Mohsin Jameel will explain why not many people are able to taste success with cryptos. And, also give you some tips on how to trade cryptos the right way.
2019 marks the tenth anniversary of digital currencies. Cryptocurrencies are all around. Your colleagues are discussing it at work, your friends are arguing on which cryptos to invest in, and you even come across news articles on how even grandmas are into Bitcoin.
With so much hype and talk about digital currencies, I’m sure you’ve got this question running on your mind, “why aren’t many people earning with cryptos?”
Here, in today’s post, Mohsin Jameel will explain why not many people are able to taste success with cryptos. And, also give you some tips on how to trade cryptos the right way. Let’s get started, right away.
Crypto Currencies – A Game Changer in the Trading and Investing Landscape
Mohsin Jameel - Cryptocurrencies - A Game Changer
It’s true that regular trading has undergone a paradigm shift with cryptos. A lot of people have jumped onto the cryptocurrency investing bandwagon. Sadly, most of these people are clueless and have no prior experience in investing. However, they don’t realize this until they are neck deep in a financial mess.
Though investing in cryptocurrencies is miles different from investing in funds and the stock market, the fundamentals remain the same across both domains. While Cryptocurrencies have changed the game, the Rules of Investing remain the same.
With years of experience in stock investing, I hope to pass on my experience in both fields to you. Here, I give you the simple rules to make money investing in cryptos.
What is Your Goal of Investing in Cryptos?
Mohsin Jameel - Know the goal of investing in Cryptos
This is a good question to ask yourself before you start investing in cryptos. For many people, the main goal of investing is to make more money.
But, are you really making money with your crypto investing? Are you tracking your profitability? Or are you carried away by your emotions? For instance, let’s assume that you make eight trades with cryptos. You make five profits and three losses. While it may appear that you have made a profit, you need to work out the actual numbers.
What if two of your losses were bigger than your profits? This has the potential to bring down your net profit. Make sure that you do the math.
To get Crypto Investing right and to Strike Gold, here are
The Fundamental Rules of Crypto Investing
Rule No.1 – Never Lose Money
Mohsin Jameel - Fundamental rules for Crypto investing
This point is very important. Even if you don’t any other rule, make sure to keep this one in mind at all times.
Make sure to keep track of the numbers right from the time you start investing. If you find that you are consistently losing money, then it’s essential to change your approach. Very often, beginner traders make the mistake of not factoring in their losses, when they get a win. You may see a win occasionally, but that doesn’t mean you get an overall profit.
The idea here is to “Stop Your Losses in Time.” Time is a crucial component of investing, and it can be your friend if you know how to use it right.
The smart strategy here is to cut your losses before they mount, and alter your investing strategy.
Rule No.2 – Don’t Be Over Smart
Very often, newbie investors make the mistake of assuming that they are smart. And, they believe that they are smarter than investment experts. If you have this attitude, then the chances are high that you are likely to end up making costly mistakes. If you consider yourself as a smart investor, then it’s likely that your overconfidence will land you in a soup.
Did you know that the best investors in the world never consider themselves as smart? They always consider them as learners, learning from the mistakes and good choices made by others. Read up on the strategies of other investors; understand what worked for them and what doesn’t work for them, to make the right decisions.
Rule No.3 – Focus on Both Your Medium and Long-Term Goals
As mentioned above, time is your friend when it comes to investing. Even if you plan on making short-term trades, you have to consider the long and medium-term growth prospect while choosing investments. There’s no point in selling at a loss unless you need the money for emergencies. Hold on to your crypto investments, until you see a profit.
Rule No.4 – Formulate Your Investing Goals
Very often, people who invest in cryptos do so without any particular goals. They don’t have any well-planned investment strategy that backs up their decisions. Without an investment strategy, your successes are based on luck, and your failures are a result of bad luck.
Start by having clear goals. Don’t look at the profits and losses of others as it will disrupt your investing rhythms. Instead, make investment decisions based on your goals.
Rule No.5 – Never Rush a Trade
Let me explain this rule with an example. Say, you invested in a coin, and then upon further research, you found that the coin doesn’t suit your investment goal. What would you do? Do you rush to dump the coin? Or would you hold onto it for a while?
The smart strategy here is not to make a rush. Instead, research the coin and if you are trading it, make sure that you sell it for a profit, thereby making your wrong initial decision a profitable one.
Remember, that don’t make investment decisions based on your emotions. Wait and be calm. When it comes to crypto investing, time is not a liability but an asset.
Final Words by Mohsin Jameel
I hope that this article convinces you that crypto investing provides you an excellent opportunity to make money. But, the one catch is that – you should make the right choices to make money in the crypto ecosystem. Follow the rules given here, and make sure to do your math, so you don’t make losses.
If you need further guidance on making the right investment choices in the crypto world, you can check out other articles by Mohsin Jameel here, or get in touch with my team to guide
