Rule 01: Invest in crypto with what you can afford to lose.
This also mean that whatever you've invested in cryptocurrency, be prepare to lose each and every cents of it. No leverage. No CFD. Nothing. $500 invested? Prepare to lose that $500 invested. That's the mindset to have :)
Rule 02: Don't forget Rule 01!
This may sound familiar to many. It is the that same 2nd rule as what said by the the Oracle of Ohama. Not difficult yea?
As mentioned in Cryptocurrency for Dummies - Part 1 and a short story, the example cited between BCH and BTC, does it look familiar to anyone? From 6XX USD to 2XXX USD, and now 1300 USD! Can you imagine how those who bought at 2000 USD will feel after a sharp 35% decline in a day?
Having that said, be reminded that in the cryptic world of cryptocurrency, a 30-40% drop/increase in a day is pretty common. Some even happen in hours! Catching the bull at the wrong time, might be a painful lesson.
How about a few other scenario apart from the ones who bought at 2000 USD for some thinking :p
- Bought at 600 USD (Wow. I'm still raking on a 100% gain!")
- Bought at 1,000 USD ("Argh.. I could have had a 'multi bagger'")
- Bought at 1,300 USD ("Now should I sell?")
- Bought at 1,700 USD ("I believe that BCH will rebound! Time will prove it right!" BTC will soon collapse!")
Bonus Rule: Be disciplined and not be greedy.
"If we don't take money off the table, unrealized profit will soon turn into losses very quickly!"
Many different individuals are expressing different views towards the world of cryptocurrency.
A good number are saying, "Bitcoin is in a gigantic, enormous bubble!"
Yet, there's also a great community that are saying, "It's just the start of cryptocurrency. One fine day, people will understand that fiat are useless! When you see auntie and uncle having cryptocurrency in their 'wallets', that's when you know that your coins now are worth a lot of money!"
Note: Investing in cryptocurrency is very risky. Please do your due-diligence before any actions. Having that said, I'm prepared to lose every cents that I've input into the crypto world should anything fall through. I do not recommend investing in cryptocurrency.
Cryptocurrency? I'm in too
Cryptocurrency for Dummies - Part 1 and a short story
Cryptocurrency for Dummies - Part 2 (Rules for crypto-investing?)
Cryptocurrency for Dummies - Part 3 (When do you start?)
Cryptocurrency for Dummies - Part 4 (Guide to start investing in Cryptocurrency)