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This is how I pick which cryptos to invest into, and it is the same tactic major investors in most markets use

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This is how I pick which cryptos to invest into, and it is the same tactic major investors in most markets use

So in nearly every market the ones who make the most money

  1. lucked in it
  2. used a given set of rules to invest
  3. both (most)

Now, what do most do. It's actually pretty simple and it comes down to 2 parts

  1. Fundamental Analysis
  2. Leverage

Now the fundamental analysis is where you get into risk management, DYOR, and so on. But in a nutshell, it comes down to

  1. Finding good companies that are good at being a company, land that is in a market that is about to be developed, foods that are just coming into other markets, etc.
  2. Find out what they are worth
  3. Buy them below that price

The first part is actually pretty easy. So for crypto it is something like BTC, ETH, SOL, and a few others.

For stocks it's something like

https://preview.redd.it/w4vf8dbghaw81.png?853&format=png&auto=webp&s=65599a7dc97d5f59090c4020930f94352d4ff67b

For housing this is also easy. Look at the economic bubbles, growth of jobs in the area, and growth of population. The housing bubble is starting to burst, but prior you might of noticed a massive amount of development. This is a good indication that buying large amount of land for commercial real estate might be a good idea.

For food markets, a good example I can think of is UK and sweet potatoes. They can't grow them, but here in the USA we very easily can. It turns out Germany, UK, etc loves sweet potatoes and it was introduced in many areas in the past few years prior to virus. Shipping, farming , etc is still super young. So investing in farming, transport, and products companies that can push things like sweet potato fires IMO is smart.

Like what you are looking for is

  1. Will it go away anytime soon?
  2. Does the majority of the population/industry already know about them and invested in them? (this is something you don't want. More so, you don't want them to already be invested in them. And note this becomes less important if you're holding for 10+ years. Like BTC won't 1000x, but it most likely will 10x over a long enough time. Same with Google and whatever else. They are overvalued for here and now. But future they are undervalued. It just you won't get a ton compared to other things.)
  3. Are they good at being a company, a coin, etc? You need to evaluate this over time because the standards do change.
  4. And a little added, do other companies, coins, etc depend on them? For example ETH how much of the market depends on it. Same with BNB and now SOL. TRX if they ever get their head out of their ...

Now the trick is you need to buy/get in below what their worth. This is tricky because it is easy to get this wrong. You need to look at factors like

  1. Real world (war, inflation, regulation changes, etc)
  2. Reputation
  3. What are they working on and what problem does it solve
  4. If they make others depended on them, then how well that works. Note things like TRX that has this ability but don't use it, SOL that is just getting in this when comparing to ETH, and ETH the internet of crypto. This is important even in the stocks. Note how many companies depend on Google and how many of us depend on it. It is extremely unlikely it will go away anytime soon. The more that depends on it, the less the gov can screw with it and the more investment it gets from normal investment and from what depends on it.
  5. How well it holds it's value compared to the reset of the market. Note I don't mean something like VET that is always down....
  6. What are they looking at doing in the future, and how much untapped money/potential is in that market. For example Google getting into smart phones.
  7. And more

Or you could just make a guess how long you will hold it, look at charts while comparing it to the overall market over a large period of time. And how the company/coin reacts to jumps or dips.

Note there is a crap ton more that goes into this, but it is about impossible to get into it all since it is case by case situation. But a thing that is a must when it comes to this is TA. But understanding how to read chats and use TA on them, but also outside TA factors. Like Google trends as an example.

Keep in mind, a company, coin, etc can have the best product in the world. But if no one knows about it. Then it might as well not exist.

Leverage

Leverage is basically borrowing money to make money. In the stock market normally if you have $100, then you can borrow $100. So you can trade with $200, while only $100 of that is your money. So it is a 2:1

So lets say if you have $100k and you had a 10:1. You would be trading with $1M.

It should be noted trading with leverage is extremely extremely risky if you don't know what you are doing. One of the risk when it comes to crypto is the liquidity the exchange has.

Big thing to note is this is one of those that works until it doesn't work. Again, this is where the luck comes in. The fact is, your doing risk management to lower that luck value as much as possible to keep this in your control. But at the end, there is always going to be some luck involved, some unknowns, some variable that is there or will be that that you can't know.

Because some level of luck is involved, this isn't financial advice.

submitted by /u/crua9
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