Transcription
I've been in crypto for 6 years, and these are without doubt the 15 biggest lessons that I've learned that have moved the needle for me personally. It's been an absolute roller coaster. I've had periods of making millions of dollars. I've had periods losing millions of dollars.
In today's video, one of the learnings I'm going to tell you about is a story where I lost $1.8 million in a matter of days. But hopefully, by the end of this video, you can absorb the knowledge that I have accumulated over a period of many years. And in all honesty, this could be one of the most valuable videos that I've ever recorded because you're going to be able to take some of my biggest lessons and biggest learnings and implement them into your trading and investing. Not only to potentially make a lot of money, but also save yourself from making the mistakes that I have made. So sit back, relax, and learn from my mistakes, learned from my wins over the course of the 15 lessons in today's video.
Lesson number one, niche down early. I would say a lot of my success in the space and a lot of my learnings in the space could be attributed to the fact that in 2020 and 2021, I just went really deep into DeFi. I was in all the pools. I was yield farming. I was investing in the governance token under each respective ecosystem. For example, Phantom, Avalanche, Terra at the time. And by nature of digging really deep into one specific niche, which was DeFi, I just got really, really good at that thing. And by getting really good at DeFi, it taught me all about this other stuff: the psychology of a coin, the sustainability of token economics, the impact of hype and momentum, the importance of the team and the role that they play in helping a project succeed. Just by going really deep in one thing, I learned all of these other things, which eventually, when I ended up going into more general investing, I'd already built up this skill set. So for you, it doesn't have to be DeFi. It could be getting really good at low time frame trading. It could be becoming an expert in AI and the AI crypto crossover. Whatever it is, by becoming an expert, you're going to learn so much more, and you never know where that rabbit hole is going to lead.
Lesson number two, develop a real edge. In the beginning, especially 2019 and parts of 2020, I was kind of all over the place. And I think that was an important period where I learned a lot about the market, but I didn't really have an edge on the market. I would even say at times in 2021, although I had a lot of knowledge, I was still a lot of the time just gambling, and I didn't understand my edge eventually. And this happened really over the course of 2022 and 2023; I understood that I had a few very clear advantages in the market: my speed to absorb information, my connections and network in the space which I built, but also my eye for spotting fundamental alpha and being quick to act on information asymmetry. That is a real translatable edge in the market, which to this day consistently makes me money. So, if you're new to the space, I recommend finding an edge and developing an edge. It could be speed, it can be information asymmetry, it could be network; whatever it is, develop a real edge and don't just play the guessing game.
Lesson number three, I've learned this one the hard way a few times: Only buy things you actually understand. Don't just buy a coin because of creators hyping it up. Only invest in products—and this isn't just crypto; this also goes for equities as well—that you truly understand. Business models you understand, things that align with your beliefs in the market because it's going to be way easier to hold a coin through a volatile period if you actually understand the underlying business model. Because what happens is when the market crashes—and these are the periods where you actually should be buying more—if you don't understand what it does and if you don't have real conviction and you haven't built that, you're just going to be prone to panic selling because you didn't actually understand what you were holding. So make sure that your core crypto holdings are things that you actually understand.
This leads me on to the next lesson, which is don't hold too many coins. I highly recommend that most people hold between 5 to 10 core altcoin positions. Now, obviously, you can hold a lot more at certain times. If you're in a frothy period of the market, you can maybe get away with holding a little bit more and, you know, risking it during certain periods of the market. However, generally speaking, you should always try and get down to that 5 to 10 core portfolio holding range because it's going to be much easier for you to a really understand what you're investing in, but b keep up to date with all the announcements, all the news, which may technically or fundamentally affect your position. It could materially lead you to buy more tokens or sell more tokens if something to do with that project materially changes. And you'll only know that if you've niched down to 5 to 10 coins instead of trying to keep track of 30 to 40 coins. That one is very important.
Lesson number five is always trade with a predetermined plan. Before you buy a coin, you should already know the exact levels or the exact plan for invalidating that trade if it goes against you, and you should already know the exact levels or the exact increments that you would look to take profits on that coin. Now, of course, things can change based on the market and new information. You should always change your market strategy based on new information; that is what good traders and investors do. However, you don't just want to be sporadically deciding things after the fact; at least by having a predetermined plan, you're not going into a trade completely blind. And I think people screw this up, and myself in the past as well. You know, people won't have time horizons on their trades. They'll buy a coin being like, "Oh, it's a long-term hold," but then it'll start to crash. And then they'll start to sell that coin, but wait, you said it was a long-term hold. So, why are you trading it based on a dip in the 1 hourly chart? If it's a short-term trade, just accept yourself it's a short-term trade and clearly define that before you enter. So, always go into every single trade with a plan; you'll be much better for it.
Number six is always position sizing those trades correctly. I see this time and time again in the market: People will essentially chase gains on a certain coin by sizing up instead of having strict parameters that they stick to in terms of allocations versus their portfolio. For example, people might be on a losing streak, see a coin they like, and be like, "Oh, you know, I'm going to size up 20% of my portfolio into this coin," only for that trade not to pan out. And for you to blow up 20% of your portfolio just because you put too much size into a risky coin. You need a predetermined position size based on your overall portfolio size. And that also helps actually weight your risk-reward on each individual trade.
Lesson number seven, this follows on from the last point: Always set technical invalidations. I don't care if you are super bullish on a coin; really, really, really fundamentally bullish. Have some sort of invalidation because there are times where you might be long-term bullish on a coin, but in the interim it might go down, and you can actually get a better entry. But if you've oversized at a certain point and you're not able to at least recoup a percentage of your position as it starts to break down, then you don't have the necessary dry powder or capital to buy in lower. You can have a parameter like, you know, on the key high time frame horizontal, I'm going to d-risk 20%, and on the break of the 200 MA on the daily, I'm going to d-risk another 30% to get 50% off the table. And you can always reenter that on a reclaim of strength. So, you can be bullish on a coin long-term. You can be bullish on a coin's investment potential, but still set invalidations. It'll save you a lot of pain. And out of this whole video, I think that's one of the highest leverage changes that you can make because I've certainly made the mistake many times in the past of not doing this. And now, pretty much every single trade I go into, I have a technical invalidation.
Just as you should always set invalidations on a trade, you should also sell on the way up as well. So, the next lesson, and this is an obvious one, but one I'll reiterate, is you should always be taking profits in the market. Always take profits on green days. Even if a coin is going to keep going up, latter out. If the market eventually turns—and eventually it will—you need dry powder to be able to capitalize on dips. So, even in uptrends, you still want to be taking cash off the table with predetermined increments. If a coin goes up 10%, offload 10%. If it goes up 30%, you know, offload another 10 to 20%. Keep offloading small amounts on extreme green days, and that'll give you the capability to buy in on extreme red days.
My next lesson is when you do take profits, don't just keep them in an exchange. This is a lesson that I've really learned the hard way. So, there were many times even last year where I would make lots of money on a trade. So, I would make stable coins, and I would have stable coins in my wallet. I thought I was safe, right? because I went into stable coins, but because I had them readily available, I would see a trade, and because I had all this money there, I would be like, "Oh, I can size up on this one, right? Cuz look, I've got all this money." So that excess liquidity in my head made me take on more risk, and then that led to bad trading. Whereas if I had offramped into fiat, physically into a bank account or cold storage in a wallet that wasn't readily available, I would have locked in a lot more of my gain. So this is a tip to you: When you do take profits, take a percentage of that; either put it into cold storage USDT or Bitcoin that you just don't touch or is hard for you to get access to, or literally off-ramp it to a bank account because that friction of re-onramping will stop you from impulsive decision-making when it comes to trading.
All right, so the next point I'm going to make might sound slightly counterintuitive, but that's because everyone gets this wrong, and it's you should be riding your winners and cutting your losers. Now, still take profits on your winners; you don't want to get into the habit of not taking profits. But does it really make sense for you to cut your strongest coins that have momentum to rotate into another coin which is unproven and doesn't have momentum just on the fact that it'll probably catch up? I mean, we are in a different market this cycle. Maybe that worked in 2021, but this cycle you have to be a lot more selective with what you're holding. And if you're holding a coin that's performing really well, it's probably because it has the fundamental and the technical catalyst that are keeping it in line for that growth. So what you should do instead is aim to keep your winning positions intact. Take profits on them, of course, but keep them intact. Don't just rotate them into another coin that hasn't pumped yet. Because what you'll do is you'll actually end up limiting your upside. A lot of the time the leaders in the market, they'll keep on leading, and the losers, they'll keep on losing. By rotating out of your winners into your losers, you're essentially fighting momentum. And crypto trading is all about momentum.
My next point, don't marry your bags. So, in Q4 last year, there was a coin called Lucky Coin, which I had a lot of conviction in because I thought it had a good narrative as a meme coin. And the coin actually went up a lot, but I didn't take any profits because I got attached to the coin. I had this thought in my head that, oh, you know, I was going to make $10 million off this position. So, in my head, I'm like, why would I sell for 1 million or 2 million if, you know, I'm going to make 10 million? Then, when it started to go down, I didn't take my initial advice from earlier in the video about invalidating based on technicals when it broke down cuz I was like, "No, no, it's going to come back. I'm going to make 10 million off the trade." Anyway, needless to say, I lost a lot; I rounded about $1.8 million. I didn't take a single dollar in profit because I got attached. So, never marry your bags in crypto.
All right, I've got a few more lessons now, and I've definitely saved some good ones and really impactful ones for the end here. My next lesson is narrative is more important than fundamentals. So, a lot of people, they will be like, "Oh, you know, this crypto gaming coin, you know, is a really good coin because it has very strong fundamentals, and they have a good ecosystem. They've got big backers, and it can have the best team in the world. It can have the best tech in the world, whatever." But if it doesn't have a narrative, if there aren't loyal community members, if the overall market is not investing liquidity into that trend, it's not going to pump. And conversely, there are a lot of bad coins with bad fundamentals that will pump just by nature of the fact that they are on hot chains or in hot narratives like AI, RWA, DeFi, the base ecosystem. You know, at times it was the Solana ecosystem. They pumped just cuz they were associated to these trends. So remember, crypto is an attention economy; you are trying to preempt where attention is going to go. And in some cases, you're just trying to hop on the bandwagon of existing attention. A lot of my best trades in crypto, they haven't been from me pre-positioning months or years before this magical narrative pops up in the future that I've predicted. No, it's me seeing, oh, the ICM narrative is starting to gain traction now. The AI narrative is gaining traction. Prices might already be up 20, 30% at that point, but cool, I'm going to get in because I think it has staying power. So, a lot of the time it's just about you working out, all right, how early am I in the narrative? You don't need to be there at the very start. This is what people always screw up. They're like, oh, prices are up, but you know, I've missed it. If it still has staying power, then you're just working out whether you're still there in time to catch the meat of the move. And a lot of the exponential gains are towards the very end of a move in the macro cycle, but also micro cycles within certain sectors. So instead of trying to always be early, be early, be early, be early, sometimes you're better off just understanding that there might be still runway to go on a narrative which has already pumped a little bit.
The next point that I want to make, and this is something that I wish I listened to in the beginning, you have to pick the right vehicles based on your bankroll. So when I first started crypto, you know, I was watching all these creators at the time, Becca, Elio, Banter, and you know, these guys were multi-millionaires. So I would watch what they were buying and be like, "Oh, you know, I should buy what they're they're buying, and I should trade how they're trading." But what you got to understand is if you have $10,000, you're not trading like the guy who has multi-millions. If you have $500, you're looking at even different vehicles from the guy that has $10,000. So understanding where you're at is very important. Your strategy, the types of coins you trade, and how much risk you take depend a on your goals, but b where you actually are in the scope of your journey. So if you only have a few hundred to your name, don't even bother looking at, in my opinion, things like Solana or Ethereum or Bitcoin; you're better off looking for free ways to make money in the space. Um, engagement farming on, you know, Cookie and Kaio are good examples. I'm going to do a video on this soon. Airdrop farming, especially like the free airdrops or the incentivized airdrops. These are very plus EV if you have a very small bankroll. Onchain trading, very plus EV if you have a small bankroll. I don't think purpose trading is that good if you have less than a few thousand in my opinion; I think onchain is much better for people with less capital. So, what vehicle you pick is going to depend on where you're at in your journey, and that will evolve over time. Hopefully, you listened to advice earlier in the video; you pick one niche, you go with a sub-sector of that niche, and then you can expand out as you build up your bankroll over time.
Now, this leads me to the next lesson: As you build up your bankroll, remember your objective. Now, your objective could just be to get, you know, filthy rich in dollar terms, and that's completely fine. If that's your objective, stack, you know, USDT and be on your way. But if you have the slightest belief in Bitcoin like I do, then you should remember that altcoins are a proxy to stack more Bitcoin. So your end goal at the end of the day is to accumulate as much Bitcoin as possible. And if that's the case, then you want to use altcoins as a way to increase your Bitcoin denominated portfolio. Now, there might be times where you trade alts into stable coins and then back into Bitcoin on big dips. Recently, Bitcoin dropped from like 100K to 75K. I had put altcoin profits into stables, and I'd reinvested into Bitcoin on a big dip. You might even cash into stables now and then wait for the next big bare market and accumulate more Bitcoin; you know, you do run the risk of missing out on upside in the interim. So, whatever you need to do to stick to your trade, that's up to you. But my advice would be always treat altcoins as a way to earn more Bitcoin and always accumulate Bitcoin on major dips if you are bullish on it as an asset.
And here is my last piece of advice: This is an underrated one cuz I think most people don't do it, and AI can actually help you do this: Journal this entire journey. Take an AI chat. Every time you open a trade, tell it why you're opening the trade. Every time you invalidate, tell it why you're invalidating. And also simultaneously run a visual tracker like Coin Market Manager, for example, where you actually plug in your exchanges and you can see your win rate on all of your trades. Most people aren't even aware of what they're doing. They do all these things; they trade all these coins; they invest in all these narratives, but they aren't tracking any of it. They aren't reflecting on, oh, I lost money on this trade. Why was I too quick to enter? Did I not do my own research? Did I not have an invalidation? Like the only way that you'd be able to learn from your mistakes and get better is if you actively improve. And the only way to actively improve is to be aware of what you're doing. And the only way to be aware of what you're doing is to journal. So, we're in a great day and age cuz you don't have to use a notepad and a pen. You can use ChatGPT or Gemini; they're my two favorite models. Create a dedicated chat. You can even send it voice memos. It's very easy. Have your phone or your iPad or, you know, your microphone there. Speak into it. Be like, "Hey, I just traded a Solana. I bought it at this price; this is, you know, my thesis," and you can actually get it to log that, and then when you invalidate, you can tell it, and it will actually learn. So over time, it'll learn to pick out the flaws in your strategy. It'll learn what you do well, and it can identify patterns that you might not even be smart enough to spot. By actually actively documenting everything, you're going to become a much better trader because you have that reflective process going on.
If you do enjoy these tips, I recommend that if you have the opportunity to that you join the Mass High Club Discord in the description below. This is my exclusive Discord community where I've built an amazing ecosystem of some of the best traders and investors in the space, and that's where I post my active trades. So, you know, new coins I'm looking at, new narratives I'm looking at, if you enjoyed some of these lessons and you think they're valuable and you want to actually implement them instead of just telling yourself
That you're going to do it like you might have over the past few years, and you want to take that plunge to become super serious, I highly recommend checking out my Discord link in the description below.
I'm sure you won't regret it, cuz I think we've built the best community in the crypto space.
I'm going to see you in the next video, and I'll catch you in the next one. Have a lovely rest of your day. Peace out.