In our previous blog in the Navratri series, we looked back and discovered the birth of Crypto and how the Crypto story started. In this blog let us explore financial market wisdom mirroring Bhramhacharni, the goddess of wisdom.
Investing is as much emotional as it is material. Numerous ace investors throughout history have stressed the importance of patience, due diligence and having a methodical approach. The information age, where information is widely available online, can prove to be a double-edged sword for investors. The pros of having knowledge at your fingertips is that you can take your own time and read till you are convinced to make an investment. The flip side of the information age is that wrong information can reach you faster. In a day and age where content creation is highly democratised, it is easy to be swayed away by emotions. Hence it is important to make note of the absolute basics.
- Always start with research: Whether you are day trading or HODLing, it is important to fully understand what you are buying and why you are buying it. Approach Crypto from a holistic perspective and ask critical questions like- What is the problem the crypto is trying to solve? Who are the core team of the project? What are tokenomics? What is the future scope of growth? Etc.
If you are day trading, it is important to understand price and volume and how they are behaving at a particular point. You can use several indicators or none but the important aspect is to understand the behaviour of market participants to have an edge.
- Diversification is key: To have a sustainable CAGR for your portfolio, it is important to make your portfolio resistant to massive drawdowns. While no investment is fully safe from losing its value, one can diversify to ensure that the ship sails. For example: If you start with INR 100 and buy an asset and it loses 50% of its value, the asset needs to grow by 100% to get you to where you have started.
- Have a goal-oriented approach: It is good to have a clear entry and exit strategy to insulate yourself from FOMO and wrong advice. While investing involves having a methodical approach, it is also important to be flexible at times and weigh in market conditions to make a decision.
- Keep your Crypto secure: Always enable a 2-factor login to keep your account safe and use the suggested security protocols for your crypto account. If you are using a cold wallet, you must keep your seed key phrase secure.
Please note that the list is not exhaustive and is based on internal research. This blog should not be taken as investment advice.
To learn more about Crypto, Web 3 and Blockchain, visit ZebPay blogs. Click on the banner below to join the millions taking part in the Navratri festive celebrations. Stay tuned for our next blog which will detail “The power of crypto and blockchain” in this 9-part series.