Thought I'd take a little time to write down some tips for new people coming into the space. I know pretty much all of it's been said in one way or another, but I figured there's a chance it could help someone out. Feel free to add your own tips or offer any critique on my list.
- Have a goal. Sounds simple but I meet many people who have no plans when it comes to their crypto. If I want to get into a crypto, I try to make a plan that includes the price I'd like to enter at, the percentage gain I'm aiming for, and a basic idea of a timeline.
- Choose the right exchange. Keep in mind the security, fees, and cryptocurrency offerings when selecting an exchange. I am constantly surprised by how few coinbase users don't know they have free access to coinbase pro. If you use coinbase pro you can not only set limit orders, but you will pay significantly lower fees. These two things are huge reasons to use coinbase pro when buying/selling vs regular coinbase. You can transfer money and crypto between the two accounts free of charge.
- Specifically for US residents: be very careful if you decide to use Binance. My wife's boyfriend's accountant was using Binance with a VPN to trade coins that aren't offered on US exchanges. Eventually they forgot to clear their browser data one time before accessing binance and the site detected they were actually in the US. Binance locked their account until they can prove they are a EU citizen. If you choose to use Binance as a US citizen, know the risks and how to best avoid them.
- Backup. I think some people underestimate the importance of their seed phrase. I've met a lot of people who save their seed phrase as a picture on their phone or copied on a single piece of paper. I'd recommend not to save your phrase as a picture and having at least two written copies of your seed phrase stored in separate locations. You may even consider renting a security deposit box to store one copy - a small box is actually pretty cheap to rent compared to the potential loses of losing your seed phrase.
- Keep taxes in mind. It will come in handy to have a log or excel sheet of all your transaction details. You'll thank yourself later after you cash out. If you're planning on trying to avoid taxes, research your ass off and good luck - I sincerely hope you win against those parasites.
- DYOR. Hesitated to write this one because it's so often said, but I think it needs to be on here. I know that I've been guilty of impulse buying cryptos in the past. My biggest reason for promoting DYOR now is that it is honestly more rewarding. When you gain, you feel like you have a bit more responsibility for the good fortune than if you had just thrown money into a random coin. I have also just been much more successful after selecting a few projects that I have researched and investing in them rather than just randomly investing small amounts in a bunch of random projects.
- Zoom out. Try not to get caught up in the minute/hourly/daily charts unless you are trading. It's a lot less stressful when you make your investments and then focus on things like your work/social life, things you can control. Check back every now and then on your investments, but try not to obsess. This will make it much easier to HODL and get some real gains.
- Time in the market beats trying to time the market. This is kind of a cliche, but only because it is generally true.
- Don't tell everyone about your crypto. Besides looking like a douche, this can be dangerous for obvious reasons. I think it's okay to share portfolio percentages with good friends, but I wouldn't give out specific amounts, and definitely don't post that stuff online.
Edit: Adding the tips from comments below. Also, obligatory thank you for the gold. First gold ever - kinda cool.
- DCA - Dollar Cost Average - It's generally better to invest your money in smaller amounts at a regular interval rather than investing the entire amount at one time. Many good in depth guides on the internet for this.