This post was inspired by Jon Creasy’s article from Decentralize today 

It’s no secret that many of you, including me, jumped in the cryptocurrency market to make quick returns. But not everyone makes fortune. Trading is a gamble, but you can mitigate most risk by value investing. And when you do value investing in cryptocurrency using the principals of Warren Buffett, the legendary investor, your returns can be huge.

First and Last rule of value investing is: “Never sell in Loss”. And believe me, it’s very hard to follow this rule when you keep on looking at charts to know the position of your coin portfolio. The market is very volatile in nature, you would be tempted to panic sell, only to regret it a few days later.

To apply the said rule, you should be very confident abut your investment pick. And that confidence will come from extensive research on the coin your are investing for long term.

Research

Before you start your research on any project, you need to start research on which segment you are mostly likely to invest where impact of blockchain will be more powerful. There are different areas like- Platforms, Gaming, Identity, Payment, and Healthcare where blockchain can be an effective solution. You need to identify the segment where you are most likely to invest. Platforms is the most favorable segment followed by payments right now.

Here are the four questions you should ask yourself before any investment, adapted from Tim Ferris’s book, tools of titans:

1. Do I understand the tech?
2. Would I use the tech myself?
3. Do I see other people using this tech in 3 years?
4. Do I have any type of advantage investing in this token?

These four questions will help you do your research about the project behind the coin. Once you are done with your research about the project, the next thing you need to track is the past performance of the coin and derive a pattern. If the coin grew well in the past, what was the driving factor? And what will be the driving factor in the future that can make the coin grow? The project roadmap will give you insight about the upcoming announcements about the project, which generally positively impacts the price.

Once you are done with the fundamental research about project, you need to do technical analysis of the coin. You can also check charts posted by other traders/investors on tradingview.com or you can do charting by your own.

Refer these links to learn about MCAD and RSI analysis.

http://www.investopedia.com/terms/r/rsi.asp

http://www.investopedia.com/terms/m/macd.asp

Buy

Once you decided the coin you are going to invest in, DO NOT INVEST IMMEDIATELY. Buy during the bearish run of the coin. Buy when there is low volume left in the coin, Buy when everyone start selling it. Buy when doubters started calling the project a “SCAM”.

Dont buy all in one shot, Buy in parts, Buy more when coin dips more. Try to accumulate the coin in at-least four parts.

I recently heard many people calling “QTUM”, “NEO” and “PAY” as a scam. All these projects’coins are on the floor and available at very low bid price. This is a good time if any of these is a good investment pick for you. So the idea is to buy during the bearish run and sell when your targets are met.

Hold

Once you have bought the cryptocurrency at the cheapest available price during the bearish market, you will see your investment growing. Once the entry is perfect, the exit would be extraordinary. Now its time to set your exit. Warren Buffett is said to have made 10-100x with his few investments, thats what he suggests to other investors too, Target not less than 10x with your investment. Once you set the target, move the investment to safe storage – Cold wallet or wallets where private keys remain with you. Stop looking charts now, and track announcements. Wait till you get returns.

This is the only way to make fortune in cryptocurrency, and that’s how the Warren Buffett of the world were made.

Bonus

Few recommendations from our side which you can start accumulating.

1. NEO – “Blockchain Development Platform”
2. SNT– “Ethereum client”
3. 1st – “Gaming Platform”
4. PTOY – “Blockchain implementation in healthcare”
5. STRATIS – “Blockchain Development Platform”

We suggest you to secondary research on our recommendation for better decision making.

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Hitesh Malviya

Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.