How To Get 1000x Gains In Crypto (Free Tutorial)

(not financial advice). There is loads of talk about “1000x gains” in crypto – and looking at historical price charts shows you that it is indeed possible – in some circumstances.

So let’s look at this in an absolutely real and practical way – and learn how you can give yourself the best chance of doing it.

A Hole In One Is Rare, But A Hole In One With Only One Shot Is Astronomically Rare

First things first – getting 1000x portfolio gains in one shot is very rare, very difficult and you almost certainly won’t do it.

Maybe consider a lottery ticket? It’s cheaper – and you could get 10,000,000X gains!

Are you going to put your entire portfolio on one obscure crypto before anyone has heard of it, then hold through all the massive dips, not take any profit at all and wait until it hits that magical 1000x?

Who even does that? Almost nobody.

You are realistically going to split that stake into maybe 10 or 20 cryptos or some other allocation – in order to hedge against the fact that some of those picks will inevitably tank (especially with obscure small caps).

So even if you did get a 1000x on one of those coins, you would only have 10% of your portfolio on it; so you would only end up with 100x portfolio gains.

Which is awesome, but does not turn $10,000 into $10,000,000. It turns $1,000 of your $10,000 into $1,000,000….

Taking a parallel from a different industry: I created over 20 blogs. Only one of those made over $1,000,000 profit! Quite a few of them tanked and never made enough to even cover the money put into them, let alone the time! It’s a bit like that with cryptos. 1000x is an “outlier statistic” – with many not achieving that.

Market Cap And Timing

Timing is everything.

The first aspect of timing is being ahead of the crowd. If you want big gains you simply have to get there before the crowd (while still having the skills to determine which projects are destined to win big and which are not).

You also have to get out before the crowd gets out (at which point, of course, it dumps). This is perhaps even more difficult – because many of those investors are very happy with their 10x gains, which means they are dumping before you. On a really great project however, the number of people still wanting in continues to outpace the number jumping out, which means the price will continue to rise over time.

That’s a good way to look at it.

“1000x cryptos” are uncommon, but not insanely rare IF you got in when the market cap is absolutely miniscule.

However if a crypto already has a 100 million dollar market cap – then for it to go 1000x it would need to grow to a $100 BILLION dollar market cap!

At the time of writing, only 3 cryptos out of the 14,000+ in existence have a market cap over 100 Billion: Bitcoin, Ethereum and Binance Coin.

market cap

What are the chances that your 100M market cap crypto becomes a top 3 crypto? Very VERY small.

There are currently 110 cryptos with a market cap over 1 billion.

So pick something with a market cap under $1 million that becomes a top 110 coin, put all your money on it, hold all of it through the tips and the possibility that it might “only” get to position 150, ignore every single bright shiny object that comes along, that people are saying has better technology… take NO PROFIT and live with the fear that your chosen might never get there, tank and wipe out all that profit? You probably won’t do it! For every story you heard of someone doing it – there are probably 10,000+ people that didn’t.

Now you truly see how insanely difficult a 1000x shot is. Everyone talks about it as though it’s just there for the taking – but in reality it’s like getting a hole in one with the first golf shot of your life.

The second aspect of timing is buying during dips and getting out during peaks.

Timing is absolutely the difference between a 10x gain and a 2x loss on the same crypto, during the same cycle. You can see this – repeatedly – in every single chart!

It’s crazy to think that at all of those peaks, someone bought what the seller was selling… someone ALWAYS buys the top.

This pretty much proves that nobody has any real idea whether the price will go up or down…

One Giant Leap Or Several Small Jumps?

The next thing to note is that this is not a chasm that you have to cross in one leap. There are stepping stones. I know, I know. You promised yourself that Lambo by next birthday. But a better way to look at 1000x gains is that

10x then 10x then 10x = 1000x.

Now getting 10x gains on an entire portfolio is still difficult! Harder than you think! But 10x on an individual crypto is MUCH easier. So much easier that you do in fact have a good chance of doing it three times.

With timing, patience and excellent selection skills.

If you look historically at the people who got rich in crypto – most of them did not do it in one shot – or in one market cycle.

First of all, they got themselves into the position where they had enough to invest to get rich. (Super important!)

Second, they did a ton of research and study, and did not just ape in frivolously “Vegas style”.

And third, they did it in 2 or 3 jumps – with inevitable setbacks and obstacles along the way. They combed through hundreds if not thousands of coins, making databases, comparing statistics, and picking very carefully chosen winners.

Ignoring all the FUD and FOMO…

They might have made 10x in one market cycle, with lets say 5 of their 10 picks going 20x and 5 making no gains.

This then put them in a nice position, with enough to re-invest once again in a carefully chosen set of small projects and “recycle” those gains – with an opportunity to do some real damage and make some REAL gains.

You don’t win a war with a small army of footsoldiers. You turn a small army of footsoldiers into a large army. You then capture tanks and artillery. And THEN you move that heavy artillery into position… now you can capture entire digital cities… then entire virtual planets… 😉

Compound Gains

Another way to get to 1000x is to make much smaller gains, many more times. Now this seems easier – doesn’t it?

For example:

2×1000 = 2000
2×2000 = 4000
2×4000 = 8000
2×8000 = 16000
2×16000 = 32000
2×32000 = 64000
2×64000 = 128000
2×128000 = 256000
2×256000 = 512000
2x 512000 = 1,024,000 (1024x)

So doubling your stack 10 times (without taking any profits at all!) gets you to 1024x, which after the exchanges take their fees might be somewhere around 1000x.

(Before tax…)

What about micro gains? You could also shoot for 10% gains over and over again, continuously recycling the money on the dips and growing it gradually over time. But yes, 10% gains will get you there if you do it enough times.

Even this requires immense discipline. If one of your choices is slow moving and only gained 4%, you will be tempted to take that money off and put it on something fast moving. Which sometimes results in missing the pump on the one you bought. There will be losers as well as winners and you are bound to ‘buy the top’ a few times and become a ‘bag holder’ – watching as your money is stuck while the price goes lower, lower, lower. Wondering whether to absorb the loss or hold on for something that may or may not ever come back…. which is excruciating and WILL happen to you – a lot!

You will also want to take some profits, which is totally wise but of course lowers your investment power, meaning you need more multiples.

And – above all this – you will need to remember that…

Arbitrary Numbers Are Projection Math, And Projection Math Is NEVER Accurate

Ironically, you would have a better chance of 1000x gains by not sticking to arbitrary numbers like 10x or 1000x!

This sets a price target that has nothing to do with the actual coin and everything to do with ideals that only exist in your mind! Besides, when it gets to 9x you are going to take profits because you will be saying “this might be as good as it ever gets” and you would be right! Take the profit! Never let a profit turn into a loss!

You can always sell half and rebuy some if it drops and then consolidates. Watch out for the ‘dead cat bounce’!

Another possibility is to simply set your sell point as a limit order and then not even look at the chart. Which is quite nice, because chart watching is almost always FOMO-inducing!

Some people in crypto do really well without ever looking at charts – remember that.

Technology Changes

Looking through the charts of what was in the top 100 4 years ago, is extremely educational.

That chart is very different to the top 100 of now. What happened to the majority of those top 100 coins of 2017?

Many of those coins are “old hat” now. They were technologically promising at the time – however another project became the eventual winner out of the stack of coins that were being heralded as solutions to the same problem. Either that or new technology that did not even exist at the time appears and makes the old tech obsolete.

How will you know which one is going to win? It might not even exist yet!

In tech, this usually happens. If you are old enough to remember the internet before Google, you would know that there were once a whole stack of search engines competing for marketshare. Just like the cryptos of today! Eventually, the market decided on “one search engine to rule them all”. We also have one encyclopedia to rule them all, one video site to rule them all… see the pattern? Most of the others eventually get shook out and lose most of their marketshare to the winner.

And you probably haven’t heard of any of them now. Remember Inktomi? 7Search? Didn’t think so. In 10 years time, 90%+ of todays cryptos will be relics. I am already seeing some that no longer have a website as the project obviously folded.

In short, holding the same coin through more than one market cycle is probably not a great idea. You are better off remembering that everything has a rise and a fall, and to accept this as a reality, getting out before the fall and moving on.

What will be hot 4 years from now? Those are the projects to look into!

Trends change and in this space, trend is everything.

Remember the famous quote “I don’t skate to where the puck is, I skate to where the puck is going to be.”

Right now: NFTs, gaming and metaverse cryptos are white hot. DeFi is still pretty hot.

But what is going to be hot in 2, 5 or 10 years? There’s your target!

Strategy Template

So here’s my suggestion for an overall strategy:

1) Don’t put in money you can’t afford to lose. Seriously. Because this is crypto, and sh*t happens. On that note – learn about wallet security and take that side of things seriously.

2) Research. You need EDGE to get the right tokens! How will you KNOW before others know? Lucky guess? Research the heck out of all the new / upcoming projects and get in before the crowd. This is WORK and takes dedication: Understand trends and what is going to be hot for the next few years. Understand which projects have an edge on their competitors and why. (Can you write an essay on why AVAX is better than SOL – or vice versa – and whether it matters? Can you?) Understand tokenomics. Understand all the various scams, so that you can spot and avoid them.

3) Accumulate as large a supply as possible of a carefully chosen handful of small cap winners – during an accumulation phase of the market. Get in before they have massively pumped and reached the top of their trajectory as a business. How big is an amusement arcade going to be, really? A business that sells shovels though – sells opportunity – the kind everyone wants… this is it. Work 2 jobs and put the surplus into accumulating more tokens. Set yourself a target of accumulating ___x___ of your chosen token – this is a good target! Sell your crap on eBay that you no longer use. Just get the tokens. BEFORE it pumps!

4) Hold them until they have pumped significantly – 10x to 100x range is a good target. But taking profits at 2x is great, so long as you have something at least as good to roll them into.

5) Ruthlessly take profits while profits are there. Cull and sell while you are up. Get in before the crowd, get out before the crowd.

6) Recycle those gains into new projects.

7) Rinse and repeat until you arrive at the finish line. Expect that this will take 5+ years and that you should not be sitting still watching from the sidelines, but should be focused on improving your life as though none of the above is guaranteed and that you need to make it regardless.

8) Never forget that this is WORK. Remember John Paul Getty (one of the richest people to ever live) and his famous statement “The harder I worked, the luckier I got”. Remember this! Luck is not an alternative to work. Work your ass off and then put some of that money into investments that might multiply. Continue to work hard while those allocations are doing their magic – and keep going!

Dog Money Is For Two Types Of People

1 – Stupid people.
2 – People who know it is predominantly for stupid people, understand “the madness of crowds” and act accordingly.

But muh shibapoo-mastiff inu!!

Fail. If you think that someone is just going to tell you which coin to buy and all you have to do is sit there while the internet makes you magically rich with no effort and no stress… dream on. Suck it up; dog money is for the lost and the hopeful – but also for a few people who understand the behavior of the lost and the hopeful; and have no qualms about taking their lunch money.

Dog money is this generation’s lottery ticket. Throw a few bucks on it, sure – if you enjoy gambling. Enjoy the ride and the dreams of a better life, but don’t forget, all those 1000x gains come from others who buy higher than you did, also thinking they were going to get gains – and your 1000x gains must inevitably come from others losses… Yes, there will be a few big winners – but it probably won’t be you.

The Absolute Very Best Path Of All To 1000x Gains?

Learn to code.

Bet you weren’t expecting that! 🙂 Except for the OG’s in the audience, who just nodded their approval.

Yes, there’s an old saying among OG’s in the internet business world (ask me how I know 😉 )…

The Coders Always Win.

You know it’s true. Deep down in a place you were really hoping you could pretend didn’t exist.

The best way to get 1000x gains is to learn to code like a ninja and either start your own project or join a team that has the insight to recognize and work with your talent.

Sounds difficult – and boring – but might be easier and less stressful than trading? You might not get the “daily dopamine rushes” but you get “dev allocations” – which means a slice of the tokens at the ground floor price (how’s that for getting in before the crowd?); plus a chance to actually control how well a project works, rather than being at the mercy of the market!

Remember, crypto is a playground built by nerds so that the nerds win!

And let’s face it – becoming a billionaire is the ultimate revenge against the school bully…

It’s also a plain fact that blockchain coders are in HUGE demand and short supply.

So maybe it’s time to join team nerd?

Learn to code and go make something awesome. Because the most reliable way to get rich in a gold rush is to sell shovels. 😉

How This Trader Just Turned $8000 into $5,712,184,031 – Yes $5.7 BILLION – With ONE TRADE (Is This The Greatest Trade Of All Time?) – And How Can We Do That?

This Trader Just Turned 8000
Graphic © 8figurestack.com. Images – Shutterstock 554244451 (under license), Pixabay 6723430 (PD)

Insert boring-but-necessary disclaimer – this is not financial advice, you are probably going to lose money in crypto, do your own research, etc.

I caught this INSANE story posted by Morning Brew – and it’s too wild not to discuss. There is TONS we can learn from this!!

The craziest part about this story is that it looks like it is actually true…

So it turns out that cryptocurrency researchers are trawling through archives of old trades and not only learning from their discoveries but announcing unusual findings. This is now “a thing”. Blockchain trading archives are visible, accessible data; you can for example see the wallet address in the tweet I embedded above.

There are even apps now that facilitate this exploration – such as etherscan.io Look at these – or any crypto chart in depth – and you will see, nestled innocently among the small to medium sized trades, occasional giant trades made by crypto whales.

… and this one researcher uncovered this trade. Buying $8,000 worth of what was then (2020) an unheard-of crypto token that was “way down in the weeds” somewhere. Maybe number 3000+ in the Coinmarketcap charts. Just another memecoin / shitcoin……. that turned into a top 10 coin.

Now we don’t yet know whether that wallet held on to all $8,000 worth of SHIBA INU that they bought in 2020.

However if they did, then that gain of 71,400,000% makes this quite possibly the single greatest trade of all time.

(As well as perfectly timed hype for the holiday-season crypto boom madness that we have seen before…)

How Can I Do What They Did?

Let’s get to the point. The reason why you are here. Enough about them and what they did; how can YOU get your slice of the pie? 🙂

I’ve got some great angles and insight on this and think you are going to love it, so buckle up and lets dive in. Toss the charts out of the window for a minute… and let’s consider some macro factors.

1) Forget SHIB. It’s Done! Pick The Next Mega-Boom Coin.

Doing what our SHIB trader did is theoretically still possible in the booming crypto market; not because of SHIB, but because it’s quite likely that there will be other stories like this in the next few years – perhaps even bigger, as the amount of money in this space continues to expand. However it almost certainly won’t happen again with SHIB. It’s too late for that.

The insanity of SHIB’s mega-boom will however likely push it higher – as it’s now mainstream news worldwide. Depending how many people pile into the SHIB tulip bubble, it could possibly go another 10x or maybe another 100x. But another 1,000,000X seems extremely unlikely. Bet your house AGAINST it type unlikely. It’s already done its thing. Remember the saying – if you see a bandwagon, it’s too late.

In other words, the play here is to forget SHIB and to search the wilderness of new projects and micro caps for the next big winner.

And how to search for these gems, pray tell?

1) 100x and even 1000X coins are not all that rare. There are quite a few people already doing this research and sharing their calls. You can learn a lot from the best of these. Typically, you can see them on Twitter. Great example – SecretsOfCrypto (amazing content).

2) Scour either Coinmarketcap or Coingecko and skip the top 1000. Instead, trawl through the mud, the unheard-of stuff down below… looking for something that jumps out. Apply a research checklist such as the excellent altcoin research checklist shared by SecretsOfCrypto (it’s the second image, I could not figure out how to separate the tweets sorry):

3) Look at sites such as icodrops.com for the new ICOs.

You will quickly see just how many of these micro-cap projects there are to choose from – over 10,000 – and how overwhelming it can be. Your odds of picking a big winner are slim. You will also have to be super patient – as often these might sit in the digital wasteland for months or even a year or more before blowing up (if they do indeed blow up, which some never do…) You will also need to have the skills to move the right digital assets onto the right exchange and position yourself to make the purchase. And then, you will need the diamond hands to HODL all the way through all the dips and troughs, even when it is 1000x, all the way to the million x line..

Still, if you did happen to pick the next “million x” coin and do all of the above correctly – then buying $20 worth would land you a cool 20 million…

2) Branding Is CRITICAL

One thing that almost nobody talks about in crypto is branding. SHIB may be “just another memecoin” – however it has FANTASTIC branding. Talk about mass appeal! The name. The logo. The overall vibe. (Have you read the “woof paper“?) It’s marketing genius!

Everyone looks at the top coins for “signals” and clues as to what will be next – but one thing I have never heard anyone talk about is that the top coins ALL have fantastic branding. Name, visuals, aesthetics, flavour. Flavour! Remember that! History has shown us that you can sell a billion dollars worth of an arguably unhealthy food if it has great flavour! Same goes with cryptos!

Bitcoin: Not only a groundbreaking technology, but a PERFECT name. Perfect!!! Think about it!!! Think about how truly great this name is. It rolls off the tongue as though its stardom was inevitable. Do you seriously think we would be where we are today if they had decided to call it “turdcoin”. Even if it had the absolute same technology, same utility: Terrible name = FAIL. Bitcoin also had that super cool logo…

bitcoinimage – Shutterstock 554244451 (under license)

Look at it. Looking like a dollar symbol but using the letter B, embossed onto a gold coin. How sexy is that? Doesn’t it make you want it? It’s pure fluff… it doesn’t even exist! “It’s not even on the elemental chart.” It doesn’t matter… nobody cares! Want is what matters.

Absolute branding genius. Let’s move on. Ethereum:

ethimage – Shutterstock 709036480 (under license)

Amazing name. Doesn’t it just sound mystical and magical? Combined with that pyramidal symbol; hinting at ancient mysteries, pointing upwards as though indicating that it is going up, up, up and nowhere else. Again, it’s incredibly appealing. The manufacture of desire! Complete branding brilliance.

Now look through more top coins. See the pattern? You are welcome 😉

You could almost go so far as to say that the branding is even more important than the “real world benefits” – and that SHIB has proven this. We already knew it, in fact. Just look around you at the world’s top brands.

The fact that branding often has more power than utility is is a key, eye-opening fact that most simply cannot accept.. It’s all wrong. It’s outrageous. It’s offensive.

But it works. Now let’s talk about outrage…

3) Disruptive – In A Seemingly Outrageous Or Nonsensical Way

This is also critical. Bitcoin disrupts money. It does something that “normal money” simply cannot do.

The other thing about bitcoin that many forget is that it was massively controversial back in the day. It’s been accepted now – but in the beginning, it caused true outrage. People were infuriated that this “fake money” could be treated as though it was a “real asset” even though it was essentially made out of nothing more than data in computers. Money made out of ones and zeros? What an outrage! Totally ephemeral! Having no substance whatsoever! No real gold to get your hands on. What happens if the power goes out? What happens if it is hacked? What an outrage!

Let’s not forget that paper money too is “just pieces of paper”! Very sexy-looking pieces of paper though, as pieces of paper go – did you notice that? Great branding!

Back to the topic. The outrage was a CRITICAL component of Bitcoin’s success. Understand this!!! As Bitcoin’s price rose, so did the outrage. How DARE this DESPICABLE “unreal money” actually become something real!!! And the outrage spiked news stories, which got everyone talking, which made more people jump in, which made the price rise more, which caused more outrage and more publicity…

Now do you see it? Same with DOGE. A JOKE coin that went ballistic. What an outrage! Now SHIB. Another “stupid dog coin” going up 845% in a few days, while all those well-put together “real” tech projects do 10% at best!

There are many more examples of outrage helping a company along. Tesla motors: remember the outrage against them from the legacy auto industry?

Now look at NFTs. What an OUTRAGE – that a stupid JPEG of garbage non-art, created randomly by a computer, can become valuable.

In today’s news – a CryptoPunk NFT just sold for $532 MILLION

How outrageous is that? How totally punk rock to slap art in the face and make $532 million in the process. 🙂 A perfect example of outrage marketing…

4) Timing is everything

In crypto, timing really is everything.

Most people trade in the complete opposite way to the profitable way. They pile their money “on the horse that’s already winning”. That might work for a horse race (if you were allowed to place bets in the final furlong!) but that’s not how it works in the markets.

This phenomenon is what causes people to “buy the top”. They see how much it has already gone up and think “it’s bound to go higher”.

But imagine if you had bought low – months ago – and were now seeing that price. You would be thinking I’m taking my money RIGHT NOW – before this thing tanks! So those extreme highs means that people are up, big time – which means they are selling – and you guessed it. That means it is likely on the way down soon. Once a few whales cash out and it starts to dip, lots of other people will cash out, which will make it dip more… and the snowball effect will amplify the sell-off and make it tank.

It’s pure herd instinct! But the wolf doesn’t do what the herd is doing…

People “buy their emotions”. They buy when the excitement is already on something. When it’s already gone up. This is the wrong time.

The wolf zigs when everyone else zags. The wolf trades asymmetrically.

How many times have we heard the world’s greatest investors illustrate this? – such as Warren Buffett – with his famous quote “Be fearful when everyone else is greedy and be greedy when everyone else is fearful.” And the famous Baron Rothschild quote “Buy when there is blood in the streets, even if the blood is your own.”

Think about it. At those times – when there is “blood in the streets” of the markets – the mindset of the masses will be “@#$% this piece of @#$% coin. @#$% cryptocurrency. I need to get OUT of this @#$% NOW before it ruins me any more!!” At that point, they are offloading (too low!) – wallet and pride wounded, overtaken by fear or even panic, without thinking, without strategy.

That’s the buy signal!

Others too have said that when we see a boom of “dog coins” and other irrational stuff; when the mass public is hyped to the max – that’s when it’s time to call the top.

So think about our SHIB trader. He/she bought it when it was (sorry)… a pile of dogshit. 🙂 When nobody wanted it. When it didn’t look like it was going to do anything.

Making a wild guess here – I highly doubt it was their first rodeo. This person may well have already made a big pile on crypto and deliberately decided to take 10% of that and buy 50 new, obscure projects before anyone cared about them. It’s HIGHLY unlikely that they put their last $8,000 on some unheard-of token before anyone in the world was interested in it.

It’s also possible that they were “close to the action”. They might have known the credentials of the players on the SHIB team and thought “this is going to be big”.

Summary

So now you have four interesting macro indicators to add into the mix of your coin research, along with all the other technical and macroeconomic factors that everyone else talks about! Look for something that hasn’t done its thing yet, that has massive raw appeal, that has some kind of outrage or talking point that goes viral – and look for an entry point into the market when the general sentiment is bad, fearful or otherwise maximally negative.

Further Notes And Important Takeaways:

Note #1: This Is Wealth Transfer, Not Wealth Creation

Wealth is not being created here (unless the project has some real world utility). This is essentially money moving from one pocket to another. It’s important to understand this and its implications. Let’s assume for the sake of argument that SHIB is “just a memecoin” and despite the charitable focus and other interesting ideas, let’s assume that one day it will go to zero.

Let’s also assume that our early buyer sells high and cashes in right now. That means that all of the $5.7 billion earned from this trade ultimately came from other buyers who “bought the top” – thinking it was going to go higher. Maybe it does go higher. Then that money is passed on from other buyers who bought even higher. So it’s just money flowing from one pair of hands to another.

For every cryptocurrency winner, there is likely to be a cryptocurrency loser – or perhaps ten. And all of the money that went to make up this crazy story came from someone else’s pockets.

Note #2: The House Always Wins

Now this is key. In the casino, the odds and probabilities are finely calculated so that the house gets their take and always profits. This means that on balance, if you averaged out all the winners and the losers, everyone else except the casino is on a loss.

The same applies here. How? Because everyone buying and selling crypto is getting dinged multiple times on the way in and on the way out.

First, when you buy crypto with fiat currency – lets say on Coinbase or wherever, Coinbase charges a fee. Quite a savage fee – in my humble opinion. But you will pay it, because you are caught up in the rush of excitement and their 3% seems like a trifle compared to the 10,000% you are about to make… oh and if you bought with credit card, you might get a fee there too.

Second, they charge a spread. In addition to the fee! You probably didn’t even notice. A spread is a small (or not so small!) adjustment to the exchange rate – so that you get dinged a little bit on the swap each time there is an exchange transaction.

Third, there is a fee when you bounce your shiny new bitcoin to the trading platform you are about to plunder.

Fourth, each trade on the exchanges has a maker / taker fee. This might typically be 0.1% – small enough to make a minimal difference to the profitability of your trades – however on the billions of dollars of transaction volume pumping through the big exchanges daily, that adds up to a huge amount. Not to discredit the exchanges – as the task of running a crypto exchange is reportedly one of the most challenging / demanding businesses in the world.

Fifth, you get dinged again on both the platform fees AND on the spreads on the way out into fiat again!

And Sixth – but certainly not least… every profitable trade is taxed. More than once! Three times, in fact. Let’s say our intrepid SHIB trader cashes out his billions. This person is going to get hit with capital gains tax, which depending on their location, could be 28% or even more! And you thought Coinbase fees were high! 🙂 But it gets worse… lets say next they buy a house – bam. They get hit again with another big slice – real estate taxes. They then go Christmas shopping. Bam – sales tax / value added tax on everything. And then at the end of the day, when the curtain comes down and they try to leave whatever they have left to their kids – bam. Taxed a third time. The final nail in the coffin: Estate tax, possibly another 35% of what remains.

Can you believe all that?? Now you know what I mean when I say the house always wins… 😉 And this is “decentralized finance” baby! Where we are going to stick it to the banks and to the man and we are going to take our power back!

Mmhmm. Sure.

The only ways to “win” this game are therefore a) not to play (that could hardly be called winning) and b) to win so extremely big that even after the crypto exchange, the various financial intermediaries and finally Big Daddy have taken their slice, you still have F.U. money left. At this point your troubles are not over, though – you’ll probably want absolutely first class accountants; then you are going to have to deal with everyone else wanting to get their hands on your gold and so you will move to a different part of the world – and end up living as a semi-reclusive tax-exile expat in Monaco or similar. Fun times! It could be worse.

And it probably won’t be you. 😉

Note #3: Take Profit Before It Goes Back Down

There is an old saying among traders “Never let a profitable trade turn into a loss” and this is a truth. Taking profit is always ok – because you don’t know when the top will be. Nobody does – and when it happens, in crypto, you typically get a big, fast correction. In other words, if you leave it in too long, hoping to squeeze the last drop of juice out of the orange, you might get caught by the drop.

A good strategy here is to “ladder out”. This means sell some at various profit percentages. This way, you sell some when it’s up, but leave some in, in case it goes higher – and set a stop-loss “in profit”. This is a great position to be in and mean that even if it absolutely tanks tomorrow, you still made money! You have, however, still got “unlimited upside potential” and can then relax. Your work is done and you can let it run. Take some more profit when it goes higher again!

A nice tactic in crypto is to take 50% out when it goes 2x. This means you got all your money back and the remainder is “the house’s money” that you can relax about because it’s all upside (aside from the fees and taxes).

But how do you take profit when you have $5.7 billion and it would crash the market if you did?

First world problems 😉 Enjoy the ride… Staxxx

This Is How YOU Are Going To Get “Rekt” (Wrecked) In The Cryptocurrency Markets (Don’t Do This!)

Standard disclaimer; this post is not financial advice or a recommendation to buy or sell. Trading cryptocurrencies exposes you to considerable risk of loss.

“If you see a bandwagon, it’s too late” – Sir James Goldsmith.

You are going to hate this post. You already hate it – and you haven’t even read it yet!

Why? Because it’s going to burst your cherished fantasies of how you thought you were going to get rich in a flash with almost zero effort.

And everyone hates that guy. The ruiner of dreams. The burster of bubbles. The “Fudster”.

As if it’s my fault you lost your ass…

So go ahead, do what you were going to do anyway; and then come back to this post when you lost $10,000, $20,000, $100,000 or whatever sizeable chunk of your hard-earned cash you decided to throw at some shitcoin or NFT that looked like it was going to go up to infinity and beyond – and take you with it.

Still here?

Here’s what’s going to happen to you (or already happened to you)….

You heard about “this cryptocurrency thing” and the “tales of conquest”; people who made vast, fast fortunes. Millions, billions. You went on Youtube and got overwhelmed with information overload. Wow, what a crazy rabbit hole! Insane!

But you hung in there and did some research. You found several coins that “look good” – they have some real-world utility plus an explanation of how they “are the future”. This, although it seems complex, just about makes sense to you – and sounds good. Really good. Next level good!

So you made a shortlist of these cryptos – and decided to go in on them. You buy some. Nothing too insane – just 25% of your portfolio. What’s the point in leaving it in a savings account where it will get 0.1% interest? The banks are robbing you! Don’t wait til it’s too late, they say. Do it now, they say. Seize the day, right?

You’re IN and you are checking the charts hourly! It goes up some, it goes down some. Oh, the emotions! Don’t check the charts continuously, they said. “It doesn’t matter”, you tell yourself. “How can I be losing money just by checking?” This is of course, totally logical!

By the next day, you are up 3% overall. Pretty sweet! This is great! Let’s say you are up $150.

You just made WAY more money in one day than you did leaving that money in your savings account for a year! [except that you didn’t make the money, because it’s still on the trading platform and not back in your savings account]. But my money is going to stop making money if I put it back in my savings account, obviously. So screw the banks! Screw the boss! Screw everyone!

You love this.

And you wonder what else is going on in the crypto-sphere…….

Looking at Coinmarketcap – there is a tab for “biggest gainers”. You click to sort the list and rank those at the top. And there’s this thing that you’ve never heard of…. that (holy shit!) has gone up 30% in the last 24 hours! Whoa! *click*

OMG, this new crypto is not only up 30% in 24 hours… it’s up over 100% in the last week! Wow! It’s like a freakin’ rocket! Look at that curve!! Look at that trading volume!! And it’s still only 0.0000001 cent per token! This thing really has room to move!

It’s blown your little 3% gains out of the water.

And it’s a new project! It could still go 1000x…

Ferrari. Country house. Tropical island. Telling your boss to shove it. Hot babes. Champagne.

Imagine how much I would be up if I had put my money on that. I could have put my money on that. I should put a bit of money on that. Look at it! It’s going to the moon!

And it’s all yours for the taking – about 4 clicks away…

So you put $500 on it – just $500 – cos you’re smart. Cautious. Wise. Deliberately not going too crazy. “What’s the big deal? It’s $500. It’s not as though I am going to lose a fortune.”

And you go to bed, contented, excited… dreaming of Ferraris and naked girls and French chateaux (or whatever)…

You check it the next morning. (As soon as you wake up – of course. You didn’t even have your coffee yet).

OMG IT’S UP 20%! SWEET!!!

You just made $100 bucks in your sleep! How cool is that?!

It’s definitely cool. But it’s not exactly a Ferrari in your pocket, is it…

Hmm. If I had put more on it, I would have made more. And my other coins I bought, oh yeah, I nearly forgot. Let’s check those.

Hmm. A few are up a couple of percent. But ohh… a few are down!! Oh no!! Well, shit…. I just lost $20 on those.

No biggie! But I should take that off those before it goes down any more – and put it on the one that’s going up. Lose $20 or gain $100? Duh!! Only an idiot would keep it on those LOSER coins!

Come to think of it; Ethereum is never going to go 1000x from here. It’s already “done its thing”. *watches some Youtube videos about Ethereum*. Hmm. The technology has some flaws, apparently. Some are saying it’s going to go up a few x more at best. And it might be superseded by newer, better technology. They say it’s still a good investment but… let’s be honest: I’m never gonna get a Ferrari with that… and that’s my target now. I know it’s possible and I want my piece of the action!

So I could sell my Ethereum and put that on my fast-moving coin, too. There. Done. That’s nice.

But still, not a Ferrari.

How can I get the Ferrari?

Easy! All I have to do is put enough *does some mental calculations* on the one that’s going all the way…

But let’s just be conservative. Let’s say my new super coin doesn’t go 1000x. Let’s say it only goes 100x. *does more calculations*.

Ok, so to get that Ferrari, plus have some change for bills, gas etc, I would need to put $15,000 into this one.

*checks savings account balance*

Yep, I can do it.

Fortune favors the bold, they say. He who dares, wins, they say. Risk and reward are correlated, they say.

Maybe I should stop being scared. Maybe I should go for my dreams instead of plodding through this boring life that never seems to change gear…

So you decide to go for it. You take a big, brave step. The step of dreams. The step of hope. The step of all the things you want, versus that garbage life of being told what to do by someone you don’t even like.

Bam! It’s done. You are IN! You put $15,000 on it.

You check the charts almost continuously. Every few minutes! Finally you sleep….

The next day. PING. You are AWAKE – awake like never before! You check your stack before your head leaves the pillow (on your cool new crypto price app).

OMG YES!!! It’s up another 10%!!!

You just made $1500….

That’s more than you have ever made in one day before! How cool is this??

That day, you’re on a cloud. A sparkling, cyber-futuristic cloud of dreams with digital laser beams refracting from it in iridescent patterns. You put your Ethereum t-shirt and your coolest shades on (you’re a cyberpunk badass now, so you need to look like a cyberpunk badass!)… and you hit the town. You order whatever you want off the menu. You can barely stop yourself from smirking as you walk past all the losers, still doing their shit jobs. That ain’t gonna be your future… but still, it’s not their fault that they don’t know…. and so you hold the door for them nicely, smiling (while on the inside thinking “seeya, suckers”!)

You’re so content in your perfect world of bright dreams and endorphins that you don’t check the prices for a whole hour.

But as soon as you get home, you check the charts.

Hmm, it’s definitely leveled off for a minute. Whoa. No way. It just turned red!

That’s ok. It does that. Things always fluctuate. That’s crypto!

No, it’s definitely dropping. Ok, this is a dip.

It’s just a dip. That’s all it is.

And you’ve done your Youtube homework, so you know what’s up! Ride the dip, they say. Don’t react. You have to hang in there – because if you sell, then you will miss out. Just hold tight… and pretty soon, it will come back up.

No, it’s dropping more now. Ok, this is a REAL dip! Something’s going on in the markets.

Still, got to hold on. No worries. I’m still comfortably up. It’s all good.

But you are still glued to the chart….

Suddenly, a big red bar appears out of nowhere. The price dumps. The chart lights up with a frenzy of orders. Wow, look at that volume of selling! Don’t sell, you fucking idiots! You are causing it to drop more!!

They sell. It drops more.

Hmm, maybe I should sell a bit, and take some profit. Yes I will do that.

So you sell 10% of your holdings.

But that’s what everyone else is doing, too. Which means it drops even harder.

I have to hang in. I have to ride out the dip. Master my emotions.

You hang in.

But that doesn’t stop it from dropping.

Ok, this is now officially insane.

But insanity doesn’t stop it from dropping either!

Crap, it’s turned negative. I am now losing money. This sucks! $50, $100, $200 down now!

If I sell now, I will have lost money! NEVER buy high and sell low. Never! I have to hold on! Diamond hands!

$500, $1000, $1500 down. Damn, it’s dropping like a stone! But I have to hang in. It’s just weak hands, panic selling. The diamond hands will hold on and it will come back up. If I sell now I will be a loser!

You are, of course, diamond hands. So you hold on.

But it keeps on going down…

Suddenly, from being a cyberpunk badass riding on a cloud, you are a cyberpunk badass holding a burning coal. And the longer you hold it, the deeper the burn. The pain intensifies. You have to hold on! But it’s starting to hurt now. Starting to really fucking hurt.

The pain and the loss are becoming unbearable.

Then a terrible thought hits you. It’s not going back up.

FUCK!!! You need to get out NOW – before you lose everything!

Now, now, NOW! Pain, pain, pain!!! Eject!!! Sell!!! Abort mission!!!

You sell.

You just lost $10,000.

What the hell just happened?

Take Away / What Can You Learn From This / Why Did This Happen?

The entire scenario that just happened to you is completely typical.

It’s called “emotional trading” – and it’s what newbies do.

Now of course, you had the emotion of wanting to make money and live your dreams. That’s the whole point of trading, right?

Yes, but as the saying goes, “hope is not a plan” and all of what you did was based on hope.

And you were a victim of the bandwagon effect, from start to finish.

You never truly had a strategy. A strategy is mathematical, not emotional! Remember that!

It was your emotions that brought you to the table – and it was those same emotions that got amplified at the table (because that is what the table does) and caused you to abandon your original trading idea. Your emotions caused you to recalibrate your target, which is what made you feel “fully justified” in abandoning your original target.

When you see a crypto that is blasting off like crazy – but doesn’t seem to solve any real-world problems – you might want to avoid that one.

It’s what’s called a pump and dump.

They will always be there, outperforming your chosen course of action, luring you like sirens onto the rocks..

If you see it blasting off, it means that lots of other people have noticed it blasting off, which causes FOMO (fear of missing out) and this emotion causes them to put some money on it, which causes it to go up. It also causes VISIBILITY. i.e. just like you saw it at the top of the daily gain rankings, which means even more people start to pile in… it might even hit the news, which means even more visibility, even stronger emotions and even more money piling in.

The cumulative effect of this is a snowball of irrational trading. This thing might be an absolute pile of shit in terms of real intrinsic value – like cypher punk NFTs, SHIBA INU coin or whatever other new “fad” people are having massive emotions about. But when the FOMO hits, rational perspective disappears in a puff of smoke.

The ONLY reason so many people buy those things is because they see the surge in price and think “I am going to miss out if I don’t get this”. Pure FOMO!

If you see a bandwagon, it’s too late…

By the time you heard about this thing, the early movers (or scammers, if it is deliberate market manipulation) have already made big money. Pretty soon, they are going to be pulling out. Yep, right after you got in! They went in at the outset at a level way beyond what you are trading at, made the millions, ejected… and their big selloffs cause the price to drop.

And then when the price drops, all the fools who bought in, start to think “it’s peaked! Time to pull out” and they cash in while they are ahead – which causes it to drop harder.

And then, all those other people who piled in, start panic selling, which causes it to drop like a stone.

There’s no longer any incentive whatsoever for anyone to buy this crap, and it will just fade away into obscurity.

Think I am exaggerating? Here’s a classic example of one of these from the past: Egretia Token (EGT).


(Source: https://coinmarketcap.com/currencies/egretia/)

Take a good look at this chart and let it sink in. This really happened. This is what a pump and dump looks like “after the fact”. 250x – all the way up – and then all the way back down again.

But when you first noticed your “Ferrari coin”, it was probably in this stage here:

Same coin, zoomed in on the peak growth phase… doing 250% gains in 10 days in 2019.

Looks familiar? Yep, that’s your 30%-in-one-day gainer you saw ripping its way up the Coinmarketcap top 100 – the one you put your life savings on!

If something is not coming back up, then diamond hands will not save you… If you really do have diamond hands (but no brains) you are still going to be holding this crap 3 years later when it is worth almost zero.

It never did have any real VALUE. It just had price action caused by FOMO. People saw it going wild and so they piled in.

This is how the majority of the world trades – especially now that the majority of the world has access to these markets.

People are only buying utterly ridiculous pixel “art” that looks like crap because they have stars in their eyes about making easy money. They will even tell themselves that it’s good art!

Its only real “value” is in people’s belief that it is going to go up in price. Once that belief is gone.. it is worthless. It doesn’t solve anyone’s problems – and so the price will reflect that. It will crash, and the further it crashes, the less faith people have in its value, which causes the price to drop even more.

Egretia token ain’t coming back. It’s a known pump and dump. Why would anyone bother buying it now?

It’s sad that crypto has now become synonymous with “taking your power back”; but for the majority of people will result in even more of their money falling out of their hands and going to big players and early movers who already know how this game works. Once again; “taking your power back” is a compelling narrative. But compelling narratives are emotional trading…

A great trader once said that when something hits the news, right there is the top of the market. Wise words. By the time your taxi driver and hairdresser are talking about “this new magic internet money”, the smart money has already taken their winnings and are pulling out.

Leaving the suckers holding the bag.

Another thing: That shitcoin you were thinking of buying. Who invented it? Oh really, they are anonymous huh?

You fucking better bet the people that created it remained anonymous!! Why do you think that is? Because when they dump their 30% of the total holdings of this coin and disappear off the map with YOUR MONEY, nobody will even know who to be mad at!

This is a space in which the nerds win. Can you write blockchain code? Can you do complex mathematical equations? Are you a trader with years of experience and a strong track record?

No?

Then you are going to get rekt.

If you assume that as a newbie you WILL get rekt, and that this is the “cost of your education”, and only put in a small amount, and control yourself absolutely, and not change your plans half way… then you will not be too far off course.

“Never put in more than you can afford to lose”.

And to cure the fear of missing out – remind yourself that there will ALWAYS be opportunities to make money – so long as you can provide some kind of value that people are willing to pay money for.

Remember the old saying: “Opportunity is missed by most people because it is dressed in overalls and looks like work.”