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Aside from gold and the gold bugs, I can’t think of another asset class that fires up and drives those “animal spirits” the way cryptocurrency does. It’s been around 15 years since Bitcoin made its “Pizza Day” debut on markets, but it wasn’t until the mid-2010s that it started to gain some mainstream popularity. I must admit, I bought my first Bitcoins back in 2014 for around $350… but unfortunately, I didn’t hold onto them.

Somehow I don’t think I’m the only one with a similar story. It’s easy, and quite frankly, even a bit lazy to think back and say, “If I’d only held onto those coins from before and never sold - I would be so rich!” But this isn’t just harmless bittersweet nostalgia. I’m here to tell you this way of thinking is actually a dangerous psychological trap.

Besides, back in 2014, I wasn’t using these techniques to help manage my big winners…

Don’t Woulda, Shoulda, Coulda

I can’t tell you how many times I’ve seen something like this online: “A $1,000 investment in Apple back in 1995 would be worth $X amount now!” This is pure clickbait, and I’m here to tell you - and even beg you - don’t fall for it.

These types of statements never account for time factors, drawdowns, and life itself. Yes, time in the market may matter more than timing the market, but in reality, timing the market is where real alpha is made. The prospect of someone holding a long-term investment through a 60-80% drawdown is unlikely. I’d even go so far as to say unwise. Why? Well, not all stocks end up like Apple, recovering and powering on to dizzying highs. Many times, they go straight to zero.

So, what can you actually do about it?

Go to war against yourself. Restrain your initial impulse, whether that’s to dive in headfirst or run for the hills. Do your best to take emotion out of the equation; when we get emotional, we can make questionable decisions. Set rules and boundaries for yourself and stick to them. I’ll share some with you in a second.

I’m not a big believer in “getting rid of your ego.” In fact, I’ve found that people that say that are often trying to manipulate you. Besides, in the trading world, it’s important to have a healthy ego. It’s even more important to use some simple trade management techniques that help keep you sharp and confident.

Do This Ahead of Every Trade

Before I even place a trade, I have my buy point, stop loss, and price target all articulated. Whenever my price target is hit, I will reduce my position by ⅓ or ½ - no questions asked. Then I tighten up my stop. I do this for a couple of reasons:

1). It makes it easier to hold onto the remaining position knowing that I’ve taken some chips off the table. As the saying goes, “Cut your losses short, and let your winners run.”

2). It helps me avoid being too concentrated in one particular stock. What if it gaps down 30% after growing to comprise 30% of my account? That’s going to seriously hurt my bottom line.

This is good advice for trading stocks… but it’s imperative you do this with cryptocurrency. I bring this up with respect to crypto because I’m not ruling out a final bullish explosion higher. Approach crypto with these rules in mind, and you stand a good chance of enjoying a nice, lucrative crypto summer… even if that means we’re going to have to hear the same old chestnuts we heard in 2021, like… “Lambros,” “Have fun staying poor,” “To the moon,” “Diamond hands,” and “HODL,” to name a few.

Once again - don’t fall for it. Of course, if you’re reading this, you’re probably a sophisticated trader or investor - or you’re on your way to it. I’ll be back soon with more, including an approach I think could prove to be very timely. Until next time...

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