“To err is human; to forgive, divine” — English Proverb

Ah yes - “To err is human”, a phrase that each and every new cryptocurrency investor, at one time or another, will come to embrace, yours truly included. Now while I no longer completely new to cryptocurrency , I have made a LOT of mistakes during my initial weeks (as all Noobs do).

I read the blogs, watched YouTube tutorials, subscribed to Reddit communities and followed the all of the so called crypto “experts” on Twitter, in order to minimize the risk of failure. But even after all of this prep, I still managed to fall flat on my face(quite a few times). And a couple of times, I fell pretty hard.

I was going to start the list with Make Sure To Research, Learn about, Watch YouTube Tutorials, etc. But then I thought, if you are someone who would actually skip those steps, and thus just invest on a whim, you would probably never search for an article like this one. To those people, best of luck. to the rest of you, currently reading this, it goes without saying to do your homework before investing and to only invest what you are willing to lose.

Now as you begin your cryptocurrency journey, take a deep breath and begin to embrace the fact that no matter how much you think you are prepared for this market, you are not. You will stumble, and at times it will be bad, but if you are patient and avoid the 7 mistakes listed below, you and your portfolio will respond and grow. The most patient and prepared investors make money in both bear and bull markets, while the unprepared, greedy investors leave at the first sign of a dip.

1. Not Understanding How The Coin’s Circulation Supply Determines Its Price Per Coin.

Market Capitalization (MCap) refers to the total market value of a coins/tokens outstanding shares.

Circulation Supply (CS) refers to how many coins/tokens are currently available to trade.

Divide the MC/CS = Price Per Coin

If I had taken the time to learn this simple equation from the get go, I would not have spent the first week of crypto trading thinking that the $150 worth of Ripple, I had just bought, was going to allow me to buy a lambo when the price of Ripple hit $4K (which was the price of Bitcoin at the time).

All I kept thinking that week was, “I was going to be a MILLIONAIRE!” “Why weren’t other people doing this?”Cryptocurrency is soooooooo easy!”

The dream burst when I read on Ripple’s Reddit Page that it had a circulation supply of 30 Billion (in comparison, Bitcoin had 16.5 million). Such a large circulation supply meant that if Ripple somehow managed to rise to $4K (or even $1K), the company would be worth over $30 Trillion dollars (Apple, the largest Market Cap in US is valued around $865 Billion). That is not happening in my lifetime (some Ripple diehards may disagree with me on this — LOL).

While you can absolutely make money on these penny coins/tokens, look up its circulation supply and then plug it into the equation to give yourself some reasonable price per coin expectations. If the supply is in the billions, you may want to reassess your price per coin target from $4K to say $1, $2 or $3.

2. Selling Your Coin/Token Because It Hasn’t “Moon’d”

So remember how I just told you that I had bought $150 worth of Ripple and thought that one day it be worth more than $4 million? Well it is not quite 4 million but it is worth north of $1200 (at today’s price), giving me a nice ROI at around 700%…I mean the person who now owns my Ripple, has a nice ROI at around 700% (or higher if they sold it when the price was above $3).

So what happened? Well, I didn’t panic sell, instead I had become impatient. I saw all of my other coins ticking up while my Ripple hovered around $.20. So I took a small profit, I sold Ripple and bought some more Litecoin (which was rising), and never looked back…until Ripple hit $.50, then $1, then $2, then $3.

I was in Ripple for less than 30 days and dumped it because it hadn’t “Moon’d” in that time. Talk about noob stupidity. So be patient with your coins and try to give it at least 3 months before you make a change. Being reactionary in cryptocurrency will always burn you in the long run. Let the market/coin play out.

3. Trying To Day Trade

Unless you are a experienced chart reader or seasoned day trader (either in traditional stock or commodity markets) don’t do it. You will lose more than you make. I tried it for a week with certain coins and (thankfully) came out flat. I did, however, miss out on a couple of big gains by flipping coins too soon. Crypto is very volatile and while Technical Analysis is a good way to pick when to buy and sell, trying to learn and implement the craft from the onset will more than likely ruin your portfolio.

4. Not Learning The Lingo

There are a lot of fun Cryptocurrency Acronyms out there and learning them so that you can communicate on Reddit and message boards will help you endear yourself to the crypto community.

5. Not Asking or Googling Your Questions

I wish I had asked more questions initially, but I always found myself too embarrassed to do so. I imagined being singled out on Reddit, Twitter, or Facebook, as the noob who knew nothing (even though, that is exactly what I was). Wanting to just fit in, I lurked and would only post if I knew an answer or thought I had a solid opinion.

Finally I remembered: Who Cares? The jerks who like to call out the noobs, are anonymous strangers, hiding behind a keyboard and screen, and did I really need their approval? Nope. So I started to ask my questions and guess what? Plenty of users were online to help me.

If you still feel hesitant about positing a question, just type in your question (word for word) into the Google search bar. I guarantee it has been asked somewhere and Google has indexed that page and can provide the link to that page. Remember, the only dumb question is the one that is not asked.

6. Be Active In Your Coin’s Community

No matter if you pick 1 coin or you pick 100 coins, join the Reddit Community (if it doesn’t have a Reddit Community, that is usually a red flag), follow them on Twitter, Facebook, join their Discord or Slack group (a lot of great conversation, sometimes from the developers, happen on these two platforms).

Think of it this way, if you are going to invest your hard-earned money, shouldn’t you at least have a basic understanding of what the coin and the team is trying to accomplish? If the community is pretty quiet or you find it hard to figure out information about the coin (its team, vision, etc.) then considered those red flags and either get out of the coin or move on to your next target.

7. Watch For Scams — ICOS, Ponzi Schemes, Wallet Schemes, Pump And Dump Groups

Rule of thumb with regards to anything offered on the internet: If it sounds too good to be true, then it probably is.

Hopefully you have heard that phrase before because it really applies to the wonderful world of cryptocurrency.

Initial Coin Offerings (ICOs): While some ICOs are legit, some are not. So try to be cautious before you run and dump your money into one. Anyone can create a coin (for about $100), launch a website for it, then write up some White Paper and post that and a road map in less than a day. So before you decide to invest make sure you do 3 things: Research, research, RESEARCH. Look-up the team, read through the website, subscribe to the reddit community (again, no reddit community, RED FLAG) and ask a LOT of questions.

Ponzi and Wallet Schemes: Seem to be the new thing popping up in the crypto communities preying on the naive, new investors. With Ponzi schemes, the reoccurring theme seems to be asking people to invest a set amount of money into a Bitcoin/Crypto “Fund” and they guaranteeing the investor minimum return, regardless of market performance. Again, if it is too good to be true, then it is — just ask the poor people who invested in Bitconnect. As for the cryptocurrency wallet schemes, I have just recently started to see tweets which look like they are from Coin founders (Charlie Lee (LTC) and Justin Sun (TRX) specifically) accounts. The tweets normally sound like this: “Lets play a game, first 15 people to send me X LTC coins (or Tron) to this wallet address, will receive 10x back to their wallets.” If you look closely, the Twitter handles are a digit or letter off from the actual accounts. These are just scammers phishing for coins. Rule of thumb in crypto world — Only send your coin to an exchange wallet, personal wallet, or a friend that you actually know.

Pump & Dump Groups: I personally hate them because I feel that they take away from the spirit of the cryptocurrency community. If you see one advertised (normally on Reddit or Twitter),please ignore it. The main ploy is to recruit as many people as possible so that the original creators can profit the most. These creators have already purchased and accumulated large amounts of the low market cap & low volume“Coin” that they want to “pump”. Once their group is large enough, the send a “signal” to buy. As everyone is buying, they have already created limit sells at a pre-determined price. Once the coin hits that price, the “Dump” occurs as the creators limit sell orders hit, and a lot of the groups members and then stuck with worthless coins that they purchased at a high price.