10 Mistakes To Avoid That Will Leave You Rekt In This Bull Run
Avoid These at All Costs
At this moment, we’re in a very critical phase of the bull market. Things are pumping left and right. People are throwing caution to the wind and diving into projects head and feet first in an effort to secure a piece of the crypto pie. It is true that if you find yourself in the right place at the right time during a pump, you can experience unimaginable gains. However, do you know what else comes with the pumps?
Mistakes! Not just small mistakes either. I’m talking about life-changing-wealth ruining mistakes. The sad reality is that these mistakes are very easy to make, and a lot of people (hopefully none of you that are reading this) are destined to make them. Whether it will be because of inexperience, desperation, naivety, or all of the above, 97% of new investors and traders will make at least one of these mistakes. My main objective today is to identify these mistakes in an effort to help you all avoid making them.
Failing To DYOR
You’d be surprised at how many people go all-in on a project without doing any of their own research (or maybe you won’t because this might describe you).
Most people’s idea of research is listening to some random crypto influencer or friend/family member that has no portfolio proof or track record of making great calls. It’s either that or they just “Yolo” into a project and pray for the best.
This is a great way of becoming the subject of a crypto cautionary tale on how not to invest in the crypto market.
Even if you decide to take the advice of someone deemed to be “reputable”, you should always follow up with your own research. We’re human, we make mistakes, and no one is capable of making perfect calls 100% of the time. We’ve already put together a comprehensive guide on how to research projects to find the true gems. Please take the time to study and apply the methods that are listed.
Buying A Token That Has Already Pumped
Most people will look at the coin list on a coin rankings site or an exchange, find a coin or token that is up 300% in the last 24 hours and decide to go all in.
This tends to happen to most newcomers before they learn to properly research a project and be ahead of the curve.
They either look on CoinGecko and find the pumped coins or watch people on crypto Twitter talk about how much money they’re making.
This causes the newbies to experience FOMO and buy out of emotion. Once they invest, the project dumps, and they end up becoming bag holders.
John talks about the danger of buying coins that have already been pumped.
Going All-in on Micro-Caps Hoping for 100x Gains
In crypto, you have investors that try to outsmart the market and find some random coin with a $600k market cap that no one has ever heard of, to go all-in on. They’re hoping that this coin will suddenly gain some traction and pump 100x or even 1,000x.
I’m not saying that looking around the corner in an attempt to be early is a bad thing (it’s actually one of the best ways to play the market). However, there is a time and place for everything.
At this stage of the bull run (late stage), the trend is your friend. The chances of you finding some under-the-radar, super-secret microcap coin that has amazing fundamentals is unlikelier than it was earlier in the cycle. Thus, the risk of buying micro-caps is much higher.
With that being said, all hope is not lost. There are still small and medium cap coins out there that are still overdue for having their day in the sun and can grow tremendously. And maybe just maybe, we get another IDO season as well…
Holding On To Dead Coins In Hopes That They’ll Pump
“Hodling” is a code that we live by in crypto. Sometimes, however, it’s important to recognize when it’s time to break that code. If I had to guess, I’d say that at least 35% of retail investors have coins in their wallets that haven't had a GitHub update since Moses parted the Red Sea…
I understand that sometimes it can be so hard to say goodbye to a coin. But you need to dry those tears up and purge yourself and your wallet of that sh*tcoin that you randomly bought simply because of the hype around it at the time. I know you’re expecting that epic pump, but it probably ain’t coming.
That doesn't mean that you should sell your losers for projects that have already been on a tear. Find projects with solid fundamentals that fit a good narrative, and still have enough upside potential.
Now, one thing I will say is that sometimes projects do find new life. However, at this stage in the game, I would stay away from anything that looks like it has flatlined. Don’t be the person holding a dead project while missing out on all of the gains that are occurring in the market.
Falling For Scams & Rug Pulls
This is one of the most dangerous mistakes since even for experienced crypto investors it’s easy to fall for scams and rug pulls. No one is immune to making this mistake.
As the industry continues to grow, the scams and rug puls are becoming more elaborate and professional. The only way to truly defend yourself is with thorough due diligence research and not making any rushed decisions. Sadly, most people won’t research some of the projects before deciding to take a heavy position or “ape in”.
This is a prime example of a scam.
This is probably one of the most important threads that Matty has ever posted. I would highly encourage you all to bookmark it.
Trading With Leverage
If you want to skip to the front of the line to Rekkt City, you should try trading with leverage. Jokes aside: Do not, I repeat, DO NOT trade with leverage if you don’t have serious trading experience. Outside of falling for a rug pull, this is by far the quickest way to lose your money in the blink of an eye if you don’t know what you’re doing.
Even some of the best traders experience catastrophic losses in the leverage game because no one is completely immune to emotional decision-making and whale-induced liquidation hunts.
Crypto is volatile enough for you to spot trade and make gains that are on par with leveraged trading traditional markets. Take advantage of this if you’re a trader!
If you’ve ever wondered what it feels like to step in quicksand, then you should ignore this advice and start using leverage.
This is how quickly the losses can pile up:
Selling Out Of Your Entire Position
After a nice price run, taking profits is crucial. But it does not mean selling everything, especially when your thesis hasn’t changed. There is almost nothing more humiliating and “FOMO-inducing” than having held a coin that goes on a tear after you sold.
It is very easy to get excited or even fearful when you make a certain amount of multiples. This is certainly understandable. A good strategy to counter these emotions is taking out your initial investment, along with some profit, and leaving some of the position open just in case there is still more upwards movement left in the tank.
As the price keeps rising, you can continue to take profits in increments (basically Dollar Cost Averaging out). Ultimately, you have to figure out what works best for you, but that’s usually the strategy that most professional investors and veterans abide by.
Selling Low or Too Early
People usually tend to sell red when they feel overexposed or scared off by FUD & volatility. However, it’s important to remember that every asset experiences positive and negative price movements in the short term, irrespective of fundamentals or the long-term trajectory.
If a project’s fundamentals are still solid, and the team is still active, random volatility isn’t an ideal reason to have “paper hands”. Some of you will experience a dip in the market and allow yourselves to be shaken out of the market. This means that you will more than likely sell at a loss and buy back in higher later on.
We’ve all been a victim of selling too early, and this is a mistake that will probably be made more than once.
You have to be prepared for the volatility of the market. The best way to prepare is to come up with a solid exit strategy and stick to it unless underlying conditions change (E.g., something goes significantly wrong with the project, the market turns macro bearish, etc.).
NOT Taking Profits
This right here has been the number one finisher of billions of dollars in gains. Tons of people watch their bags skyrocket everyday, and make the mistake of thinking that there is more gas left in the tank for the pump to continue.
Family, I’m here to tell you that if you ever want to see a grown man or woman cry, find someone who refuses to take any profits after their portfolio has pumped 100x before an inevitable market crash. Check in with the same person on the day that the bear market hits, and contact me with the results.
Many of you all will ride the wave to the top, become caught up in the euphoria, and sink with the ship without ever profiting a dollar. YOU DO NOT WANT TO BE THAT PERSON!
I understand that it can be hard to hit that sell button when it seems like everything is skyrocketing to the moon, but it’s a necessary and healthy habit. Train that profit-taking muscle early so you’re prepared!
When you do decide to take profits, remember to take them while things are pumping and NOT on red days.
Overlooking NFTs And Gaming
In crypto, there are four types of investors:
Investors that see opportunities early and take full advantage.
Investors who are exposed to future opportunities that they may not fully understand, but take a small to moderate position just in case.
Investors who see the light a little too late, and have to play catch up.
Investors who completely miss an opportunity, become bitter, and spread FUD instead of salvaging the last opportunity they may have left.
The last two investors listed are the worst categories to fall into.
Among investors, it’s apparently normal to dislike a new trend or narrative until it gets validation by the market (aka prices go up). For example, there are a lot of people in the space that are turning their noses up at the idea of owning an NFT or exploring the NFT gaming space (shout out to the right-click + save as crew).
Meanwhile, the NFT sector has been absolutely exploding. Anyone refusing to look into NFTs and NFT gaming are literally missing out on thousands of multiples in gains.
The reason I can speak so candidly to these mistakes is that I have fallen victim to a few back in my newbie days. A good number of these mistakes can be attributed to one thing, GREED. We all have aspirations to reach that millionaire status, but the chances of that happening overnight are slim to none. To be honest, it shouldn’t happen overnight either. Anything worth having is worth working or at least waiting for.
If you take your time, study the space, and stay dedicated, you’ll find that success will come much easier.