Superheroes may be equipped with godlike powers, but that doesn’t mean that they don’t restrict their actions. In fact, they live by a set of rules that make up a code of honor. For example, Superman fought for justice in ways that are also just. Additionally, taking human lives is against Wonder Woman’s principles.
But why would anyone willingly limit themselves when they are seemingly omnipotent? Well, this depends on how you see rules. Others feel like they are being tied down, but for some, living by rules is like wearing a seatbelt before driving. More than a restriction, it’s a form of protection.
Similarly, financially savvy individuals also follow rules to boost their growth and maneuver efficiently against problems. In an article published by Forbes, Corey Blake and David Cohen, president and vice president of a storytelling establishment called Round Tables Company, affirm that a code of honor can be used as a compass so you won’t get lost while embarking on a crusade to success.
If you plan to actively trade your hard-earned money, may it be on market stocks, real estate properties, or cryptocurrencies, adhering to rules is essential to bolster the chances of fruitful ventures. Below, we have compiled several guidelines that can help jumpstart your crypto trading journey.
All is Fair in Love and War
Although not a comic book superhero, William Shakespeare is a literary hero in every way. Accordingly, he once wrote that all acts are considered fair in wars. And trading, we must tell you, is an ongoing modern-day war.
According to web writer Mancuel Ninfuehr of the Good Audience, in ancient wars, military leaders faced difficulties caused by the “fog of war” — a term used to describe how it’s impossible to see everything thoroughly when engaging in organized battles. Because of these blindsides, generals must make decisions despite the lack of information.
Let’s apply this concept to crypto trading. Big-time traders, called “whales,” own a considerable amount of tokens, to the point that their trades largely affect other investors. They also have access to vital information, such as messages that influence the pricing of virtual coins. This enables them to figure out exactly when and where to trade.
On the other hand, it takes a while for small-time investors to find out whether these messages are real or fake. Seems unfair? Well, all is fair during wartime, so make sure to take precautions and gain as much info as possible before shelling out money.
Don’t Let Emotions Drive Your Decisions
If superheroes let their feelings get in the way of their deeds, there would be too many revenge plots and massive killing sprees in comics. Following this principle, basing your crypto trading decisions on emotions can lead to drastic financial disasters.
There are plenty of people who play foul in crypto markets and try to take advantage of less-informed traders. They claim that particular tokens will soon appreciate so that they can drive up the prices and conveniently exit. So, don’t be blinded by your desire to build wealth. Conduct your own extensive research and never trust baseless speculations. Remember, you’re fully responsible for the outcome of your investments, so be careful and meticulous in choosing where to invest.
Diversity is the Key
Crypto markets are extremely volatile, and in an instant, you can lose huge sums. A good security measure to mitigate losses is diversifying your portfolio. For a clearer example, let’s look at market capitalization.
There are three main classes of market caps: large-cap, mid-cap, and small-cap.
Accordingly, each class has its advantages and downsides. Also, more often than not, they don’t simultaneously experience growth. Your mid-cap cryptos may appreciate as your large-cap cryptos depreciate. Therefore, to maximize the growth potential of your investments, it’s important to develop a portfolio that strategically combines all classes.
To learn more, you can check out our guide on cryptocurrency market caps.
But here’s a reminder: a diversified portfolio is an effective risk reduction tactic, but while it can lower threats, they simply can’t be eliminated. So, set up your expectations accordingly.
Greed is Your Enemy
Taking a profit at opportune moments is another way to lessen your losses. Often, when a cryptocurrency starts growing, an investor’s greed heightens as well. But as we have repeatedly stressed, crypto markets are volatile, and risks simply cannot be removed. So, when a coin reaches a 30% increase, why not pull out profit? Your goal may be higher, but taking some profit at this stage is helpful since there’s no guarantee that it will actually hit your ideal growth.
Develop a habit of periodically pulling out profits because waiting too long can increase the likelihood of investment losses. You may also scout for reentry if you wish to reap more prospective gains.
Look at the Bigger Picture
As previously discussed, trading is a constant war in which the exchange of information is monopolized. Thus, instead of exhausting intensive methods to learn about unreachable details, it’s much better to take advantage of the information you have full access to.
A specific example is measures of value. Several metrics indicate the real value of a virtual coin, such as its current price and market caps. It’s a good idea to consider these indicators, but keep in mind that one or two metrics won’t cut it. There are many reliable tools that you can utilize to determine a virtual coin’s accurate value so do your research and be analytical.
Use Mentorship as a Leverage
Just like how Robin has Batman and Spiderman has Iron Man, you too can benefit from an agreeable mentorship. And we’re not talking about a random friend or colleague. It pays well to learn about the tips and tricks of immensely successful investors. Moreover, you don’t have to actually be acquainted with these people. Simply reading up on experiences that they share on public platforms and taking their crypto trading advice into account can be very helpful.
You can also visit websites and blogs on crypto trading, or sign up to newsletters curated by trading experts. But do note that advice should not be treated as a promise, so while considering guidelines is essentially wise, always invest at your own risk.
Adhering to rules is indispensable in safeguarding investments, especially for beginners. However, as you acquire more knowledge and experience, you can bend or break guidelines as needed.
Are you a novice in crypto trading? Join the discussions on our Telegram chat to share your story on the trader hero who prompted your entry to the crypto world. Interacting on our Facebook or Twitter communities can also be a big help.
Remember, even the Avengers and the Justice League hold meetings regularly, so you can safely assume that communicating with other investors is a superhero-approved move.
Originally published at noahcoin.org on September 16, 2019.