SHORTS: How Do I Survive?
Investing is a game with 80% of the battle won in your mind.
Conviction is edge.
This is a mantra I learnt from my friend, and I regularly repeat it. Why? Because it rings true again and again. Amidst the bloodshed we’ve seen in the last few days, people are getting scared, and it’s normal. But if bought ETH at $4,000 and you sell at these levels because of your fear, I have nothing to say.
Because in this game, there is only one rule: Survive.
As a normal person, my approach to investing in Crypto is relatively straightforward. I buy what I believe in, and hold it until it goes up, and don’t get scared when it goes down.
It sounds relatively easy right? But that’s where everyone screws up. When it goes down, people fumble. People get scared, and they sell.
There’s nothing wrong with taking profits, but if you buy at a higher price and sell at a lower price, what exactly are you trying to do? This right here is what I’m talking about; When you ask yourself: “Why did I buy high and sell low?” The answer is always related to your investment psychology.
You were either over-leveraged, over-exposed to risk, or just didn’t have enough conviction to hold. None of these factors have anything got to do with the price action of the asset. None of these factors had anything to do with the foundations of the asset.
The reason you lost money was because of your trading psychology.
So, how do you fix this? Well, the idea of how I approach investing is - I’m uber long crypto. Foundationally, I legitimately believe that in 10 years crypto will be the future. And so everything I buy, I buy with the intention of holding it for a long period of time.
I also don’t risk more of my portfolio than I can afford to. NFTs, for example, are around 5% of my portfolio. And my total crypto portfolio is just money that I can afford to lose. I will still live a relatively nice life even if it goes to 0.
The last ingredient is conviction. I buy assets I’m confident will perform in the next 10 years. Take $OHM for example. Everyone is fudding the crap out of it, and the price has dropped significantly. But that hasn’t changed my bullishness on the project.
The foundations of the project hasn’t changed, only the price has. I’m not worried about my money, because I can afford to lose it. And because of that, I’m ok with holding it all the way to $1 if I have to. $OHM was never meant to be some speculative asset - it was and always will be a bank.
Look, if you want to make it in crypto, just survive and long. Think about it - if you bought bitcoin at 1k and just held, you would probably be up more than if you had tried timing the market and selling the “top” and buying the “dip”. I’m not saying that you CAN’T, but statistically you’re not that good of a trader. More actions = more leeway for error.
So the answer is simple - build a strong psychology, a strong investment thesis, and chill.