The very first rule you need to take care before trading is "Invest What You Can Afford To Lose".
Hi Traders !
As i said that i am going to describe some important crtypto currencies rules to follow to become a good trader and here i am, today we are going to talk about the very first and most important rule to follow as a crypto trader is "Invest What You Can Afford To Lose".
Why ?
Crypto market is like a chameleon and changes it's color in seconds. No one can predict crypto unless he/she has no control over it. Crypto can make your investment 2x, 3x or more in just a single day but other side it comes with very high risk too, which can make your investment zero in a day.
That's why this is one of the most important term say "Invest What You Can Afford To Lose" means if tomorrow your investment become zero then then you don't care about much or can live your life without tension or thinking much.
If you invest more than you can afford then you might make bizarre decisions when you are worried about loosing money. This advise is given only to protect you from loosing your life savings.
"Never ever take a loan to invest in crypto, this can become the worse decision of your life"
Another question is that, what amount i can afford to lose, what is that amount and what it's mean.
It's easy to say that "Invest What You Can Afford To Lose" but in actually how much amount it is.
The current situation of crypto market describe it very well , imagine about those people who have invested in crypto when bitcoin was at $20000 and look now where they are today. Their investments or portfolio are now not even 20% and if they are dealing with this situation very well and don't care about it much then, we can say that this amount is what you can afford to lose.
Let's take an example - you can think that i will put $1000 in market and if this money becomes zero then i won't care about it. But in actually when you see a price drop in you investments then it causes or make you do panic sale then the amount you are investing is more than what you can afford losing. This is when you don't care about it when that investment drops or become zero and has no impact on your daily life.
Investment Vs Saving
One more thing i want to make you aware about is that investing is not saving. Saving is when you put your money in a safe place for a time ( 1 day , month , year or more ) and it will be there for you when you need it in emergency or in need.
But investing is different from saving. Investing is when you put you money in way to earn more from it and which can also cause you loss overtime depend on where you put your money and it might be not there in case you need it or in emergency.
I hope that all of you understand that why this is an important rule to follow as a crypto trader. I want to cover as much as new comer i can, in this post and you help me too by resteeming this post or in any way, will be appreciated
Best Of Luck :)
Stay Tuned For The Next Part
Please do not take it as a financial advise. THIS IS NOT A BUY REQUEST. It is just my analysis,opinion and result of readings. So before investing in any Crypto currency, do your own research first. I will not be responsible for any losses
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