Lessons learned during my journey in cryptocurrency (Part 2)
IV) Missing out may be costly. The fear of it may be costlier!
Not too sure if people can relate to this or is it just me. I hear about a coin and I keep it on my radar. Suddenly, it goes up significantly. My thoughts are: "For sure it would have to come down, so I'll set my entry point slightly lower than present price." Nope, the order doesn't get filled. Instead, it goes much higher again. I decide this time to bid higher than the previous occasion but still lower than the current price. "It can't go up that fast for sure!" I assure myself. Sure enough, my orders are left in the dust yet again! D'oh! By this time FOMO (fear of missing out) takes over. Damn it, I'll pay market price for it! By now, the price has been pushed up so high and starts correcting. How coincidental? This never fails to happen. I pride myself as being smart. But I prove myself wrong having repeated this stupid mistake time and time again. Sigh. Thankfully by now, I have learnt to keep FOMO at bay (70% of the time). I have to assure myself sometimes that there will definitely be opportunities out there sooner or later. True enough, good opportunities do turn up in a matter of time. So, while FOMO may be prevalent, we should learn to pass on certain deals (which may be too costly by the time we are aware of them) and wait for others to come by. From experience I can assure you and myself, there will be opportunities.
V) "No regrets" may have to be your mantra from time to time
Very often, I find myself banging my head on the wall (not literally of course) when I exit my positions too early. The coin was not losing money. It's just not moving as fast as I would like it to. Yes, we crypto investors are too spoiled sometimes. Many coins sometime appreciate at the speed of light. So when they only appreciate at the speed of sound, we don't feel justified holding them. Bad, I know. So, on a number of occasions I find that had I waited only a couple of days more, the value of the coins would have started their speed of light appreciations. Ouch! That's painful. Similar to the 4th lesson, I have to remind myself, no regrets. Let's move over to something else.
VI) Taking profits
I'll admit to you. This is the toughest challenge I still struggle with. I prefer to buy coins with the intention to hold them for the longer term. Because of my nature of work, I tend to pass on the shorter term trades though they may have more earnings potential. Very often, the coins I invest in doubles within a short period of this. Conventional wisdom will teach us to take some profits in order to lessen the risk of the particular investment. Also, you can use the profits to invest in other opportunities as well if you do not have much capital to start with. However, I tend to hold on to the full number of coins and not sell any for fear of losing more profits as and when the price of the coin go up even further. That fear often keeps me from taking profits whenever my investment doubles. Not a good practice, my logical mind says. I'll have to keep working on it I guess......
