Over the last few years, I have been collecting and revising my list of golden rules I follow to reduce my trading risk. Originally, the idea was to read through this list before every trade. While I don't do that, I do believe it is very helpful for all investors to continually be reminded of these rules.
I have found by following these rules, they help to lay the foundation for safer and more prudent trading.
SETUP & ADMINISTRATION:
Always Use a Hardware Wallet
Get a hardware wallet and use it. If the hardware wallet doesn't natively support the coin, chances are it can be used to authenticate a wallet that does. Do not leave your crypto on exchanges.
Always Have Access to Your Private Keys
As the expression goes, if you don't own the keys, you don't own the crypto. This also goes for exchanges. Don't leave your crypto on an exchange (you don't own the keys) or other 'online' service. If you do, then be fully aware, you don't own the crypto.
Always Keep Your Private Keys Private
The only way your crypto remains safe is if your private keys remain private. Do not store them online. Equally important, don't lose your private keys.
APPROACH TO INVESTING:
Do Your Own Research
This is one you have likely heard many times. If you are going to invest in a cryptocurrency, then do your own research. Make your own decision.
Don't invest more than you can afford to lose
We have all heard this one. It doesn't matter how 'sure' you are, don't mortgage the house or risk more than you can afford to lose. If you are short on money, don't bet on the market - find another way.
Never Go All In
Always have some to buy the dip and always have some for more trades. Risk diversification is the name of the game.
Do Not Leverage Trades
Don't do it. Period.
The real profits come from staying in the game for a longer period of time.
Avoid Emotional Trading
Don't worry about the trades you could have. Don't worry about other people's successes or failures. Only trade when you are in a calm and rational state of mind.
Do Not Day Trade
The market is almost fully automated and trades through AI and trading bots. Unless you have some very special software or skills, then trade over the long term.
Invest in Knowledge
The only difference between the decision between one crypto and the other is knowledge. Prize good knowledge. In this market, you always have to be learning.
Do Not Chase the News
This applies to both pump and dump groups and mainstream media.
Don't Buy into the Thrill (FOMO)
If you are not already in, then you missed the trade. Don't chase up-trends.
Buy During an Uptrend
An object in motion tends to stay in motion. Buy when the price begins to move up again.
Buy the Dip
Don't chase the price rise or buy-in at the peak. If you are not already in the market, then watch the crypto and buy in the dip. There will always be a dip. Just be patient.
Do Not Buy Shitcoins
Do not buy shitcoins. Period. They may be profitable for a short period, but if there are no fundamentals keeping the market price, it will fall. Don't be left holding a bag full of worthless shitcoins.
If it is too good to be true, it likely is. The cryptocurrency world is still highly unregulated and there are lots of scams. Use common sense and your better judgment. If it sounds too good to be true...well, you know the rest.
There will always be a better deal. Cultivate patience and buy the dip. There is no need to rush. If you feel you are rushing, then you are already too late.
Diversify Your Portfolio
To help minimize risk in a highly risky market, it's necessary to diversify.
Invest in Fundamentals
Let the business behind the cryptocurrency drive up the demand and price. The market price should be a reflection of the value of the cryptocurrency project. Buy into solid cryptos.
Define Your Exit Strategy
When will you exit the market and why?
Sell when the Market is at an all-time high
Don't worry - it will come. The market is always expanding and contracting and soon will find a new all-time high. Exit when the market as a whole is at its peak (for that period).