masteringcrypto

I've been in the crypto market for years now. I've been on every emotional rollercoaster imaginable in this space.
My goal with this article is simple: Break down my top 12 hard-earned lessons that I've literally spent millions to learn. By reading this article and applying these lessons to your own crypto journey, hopefully, you can become a better trader, save yourself from massive drawdowns, and increase the chances of changing your life through crypto.
Part Ⅰ: The Foundation
Lesson Ⅰ: The Power of Niching down
There are so many ways to make money in the crypto market; your job is to find the best one for you and become an expert in that niche.
In 2020 and 2021, I went deep into DeFi. I was yield farming across multiple chains, exploring various DeFi ecosystems, running looped/governance strategies - you name it.
This taught me A LOT about the space - from risk management and position sizing to game theory and flywheels.

I doubt I would have accumulated the knowledge I have if I were simultaneously perp trading, on-chain sniping, airdrop farming, etc.
In crypto, being an expert in one thing trumps being a jack-of-all-trades.
Lesson Ⅱ: Edge Is Everything
The best crypto traders I know clearly define their edge and focus 99% of their energy on extracting the best possible outcomes from it.
Your edge could be speed, precision, patience, risk management, network, or a combination of the above - but you need a differentiating factor.
Your market edge will largely depend on your personality, pre-existing skill set, time in the space, and some other variables.
Define your edge, master it, and execute.
Lesson Ⅲ: Only Touch What Makes Sense
If you don't understand something, don't buy it until you do.
Many people buy tokens driven by hype or FOMO, but don't truly understand the project or its business model.
Never invest in something you don't truly understand.

In crypto, it will be way too hard to stomach the volatility if you don't have a well-constructed thesis/strong underlying conviction.
Lesson Ⅳ: Narrative > Fundamentals
Flows, flows, flows.

Narrative (and thus flows) always outpaces fundamentals.
You could research a project with the best team, best business model, etc., but if there is no community, no narrative, and no liquidity to flow into that sector, it doesn't matter.
Conversely, there are a ton of tokens/sectors with "bad" fundamentals that pump massively because they have attention.
Study hype, study community, study narrative. It's an Attention Economy.

The Foundation
Part Ⅱ: Execution
Lesson Ⅴ: The Market Punishes Planless Traders
ALWAYS trade with a plan, don't go in blind.
Define if it's a long-term hold or a short-term trade.Define your take profit zones and invalidations (technical and fundamental) before getting into a trade
Trading with no plan is a plan to get rekt.

Managing drawdowns in crypto is the key to longevity.
Lesson Ⅵ: Position Sizing
This is probably the #1 thing retail traders f*ck up.

You can pick the right coin, at the right time, but if you don't size your entry correctly, it's meaningless.

Conversely, you can pick the wrong coin, at the wrong time, and if you go in too heavy, it can be devastating to your overall portfolio.
Depending on your risk tolerance and portfolio size, you should have a set % of capital you risk per trade (and that % should be dictated by pre-set criteria: i.e., conviction level, market conditions, market cap, liquidity, etc.
Lesson Ⅶ: Ride Winners, Cut Losers
I see this mistake all the time.
People will rotate strong coins into coins that are less established to try to play a catch-up trade.
You always want to ride your winners for as long as possible and cut your losers as quickly as possible.
Crypto trading is all about momentum; ride the wave as long as you can - and avoid wipeouts.

Execution
Part III: Mastering Portfolio Management
Lesson Ⅷ: Vehicle Selection
Depending on where you are in your journey, you will use different vehicles to achieve your goals.
The vehicles I used to make my first $10k in crypto are significantly different than the ones I use now.
Smaller bankrolls can actually be an advantage, as they allow trading lower-liquidity tokens. There are so many dislocations to take advantage of. It's simply not worth it for bigger whales to play those games - but you can.
Some examples: Airdrop farming, incentive farming, arbitrage, on-chain low caps, etc.
Lesson Ⅸ: Concentrate, don't diversify
For protecting wealth, diversification makes sense.

To make it, over-diversifying can do more damage than good.

I highly recommend that most people only hold 5-10 positions that they hold in their core portfolio.

This will ensure that you have adequate time to manage these positions, stay up to date with news, and regularly adapt. A bloated portfolio slows down your response time.
In frothy market periods, you can go over this range to take advantage of opportunities, but you really want a core portfolio of 5-10 high-conviction bags.

I break this rule with my "degen" portfolio, but it accounts for only 10-20% of my overall portfolio. If you want to spray and pray, do so in a vacuum - concentrate the majority of your capital in high-conviction plays.
Lesson Ⅹ: Alts → BTC
Remember: Your objective is to stack sats.
Use altcoins as a proxy to accumulate the king, Bitcoin.

As a by-product of this attitude - you'll start treating your trades differently (i.e. charting vs BTC, analysing risk factor vs BTC, analysing macro trends which impact BTC, and thus alts).

It's a very powerful mindset which, on its own, can significantly improve your risk management.
Lesson Ⅺ: Sell Into Green. Then Lock It Away.
I re-gambled a lot of my profits last cycle simply because I had stablecoins sitting on exchanges and would keep gambling with them.

My framework should've been this:
Step #1: Always TP on alts into big pumps on green market days.
Step #2: Convert stablecoins back to fiat to "lock in" gains. Or, alternatively, withdraw to a cold wallet, which is difficult to access - this will prevent overtrading.

Mastering Portfolio Management
Part Ⅳ: Modern Day Secret Sauce
Lesson Ⅻ: Data + Let AI Do The Heavy Lifting
You should journal your entire crypto journey to collect data on yourself and improve.
You can do this through posting, using MCP integrations with Notion databases, private Google Docs, or really whatever works for you.
After journaling and collecting data, share it with AI to help uncover blind spots in your edge.
Not using a journaling + AI system puts you at a massive disadvantage, and since crypto is a zero-sum game, you really need every inch you can get.

Example: AI Journaling System
I hope you've found this article helpful.
If you feel inclined, share some of your valuable crypto lessons in the comments below- I'm sure others would appreciate your knowledge.
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