For me these are words to live by, I have taken all my BTC an ETH from the exchanges and put them safely in my Wallets (got really scared during the Kraken incident, luckily the price seems to go back up now). Will stay in for the long rung...
Below the full post, for the comments see the post on Reddit.
This is exciting, isn't it!?!? Given all the commotion lately, I thought I would give some (unsolicited) friendly advice to the board that will hopefully help people make some smarter decisions. These are skills that I've amassed over an 8 year career on a prop desk. I am not an expert in cryptocurrencies by any stretch, but I have a better than average understanding of markets (I hope!)
Here are some general guidelines to follow.
Don't panic! Ever!! Panic is the number 1 source of losses in trading. Always. The key to not panicking isn't to "just don't watch the price" or anything like that. The key is to believe in your trade. If you truly believe in your trade, it will come around. The drops in price don't necessarily mean anything, because...
- Traders/Investors/Amateurs LOVE LOVE LOVE taking profits. The "buy and hold and ignore all fluctuations" mentality only exists to a select few. The rest of us love locking in profits! I bet 9 out of every 10 newly minted millionaires or hundred thousandaires will exit their position. And they will do it so swiftly (because what if that's the top and they miss it) they are willing to push the market back down just to exit their positions. This is NATURAL. Those who like to hold for the huuuge rally are merely the vocal majority. Those of us who cover, we stay silent (because we don't want anyone to know that we got out in case it keeps going).
- News, not speculation, is the absolute number 1 thing to watch out for. If there is no news, don't concern yourself with the price. All this talk of insider trading and "i wonder if a firm/exchange/country is going to make a big announcement" is all going to lead to bad decisions. The best strategy is to read up as much as you can on ETH and make an informed decision if you want to be invested in it. You guys are focusing way too much on the technicals. "where is it gonna stop" "what does this mean" "our market cap is above $XXX" "we just dropped X%". All of that is garbage, simply because this is a NEW frontier, new market. This isn't XYZ corporation you are trading where technicals could (although still usually don't) matter. These markets are THIN (I've seen the order book). Any small amount of cash can move these markets HUGE. Focus on the news. On today's price drop while everyone was panicking, I was scouring the internet for any news, any announcements, things like that. THAT'S important. Saying stuff like "I'm gonna buy if it hits $2 because that's a cheap price!" is naive if you aren't sure that there wasn't an important announcement.
- This is probably a buy and hold trade. The risk/reward is INSANELY asymmetric, meaning the upside is way bigger than the downside (obviously). But that also means, there's no difference between $1, $2, $3, or $10. In the end this will either be at $0 or some insanely high number. So everyone stop freaking out.
I hope that helps for now. That's just a start. I'm open to answering questions or PMs about how banks/prop shops/hedge funds view these markets. Good luck everyone. To the moon!