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(Disclaimer: I am not a financial advisor but I am giving these tips based on my experience for free. Well, not really for free since the platform allows us to tip both reader and author which is beyond my control. Should you decide to take my advice or tips, you are solely responsible for the results of your decisions. If you do not agree with this, please feel free to skip this post. Thank you.)
If you are new to the crypto space and would want to take part in the action and earn a significant amount of profit with acceptable risk, the first thing you need to do is choose the right coin for you then hold on to it or stake it for at least a year while taking profit whenever possible.
Here are the steps you could take in choosing the coin to invest in.
1. Before you start looking for a coin, you need to set the amount you are willing to invest. This money should be extra money that you can spare like vacation money that you intend to use 6 months to a year from now, or 1 year's worth of beer money that you have set aside or allocated from your monthly income. Remember, you are a beginner and would just want to try things out. Your beer money is sufficient for this venture.
Do not use money that you intend to pay for your monthly bills or monthly rent. Although 1 month is long enough for some people to earn up to 10 times their initial investments, you are not one of them... yet. But you will be in due time if you are willing to learn and put in the hours.
2. Decide on a purpose and come up with an appropriate time frame for your investment to earn and stick with it. Most people skip this part and end up touching their money prematurely because it earned already only to regret it later for getting out too soon when their investment could have increased a thousand FOLD more. Or worse, sold at a loss because they happened to check when the value of their investment plummeted and they panicked. By coming up with a purpose, you protect yourself and your investment from these cases that I mentioned.
Since you are a beginner, I would caution you to make this endeavor your primary source of income. You should not consider earning big in a short period of time. Although this is possible, you have not achieved that level of expertise and discipline yet. People who always keep on asking, "when moon" or "when lambo" on telegram or twitter or any social media are prime examples of beginners who do not know what they are doing or are misguided by their limited understanding of crypto. (Incoming dislikes detected!)These people oftentimes lose their investments.
An example of a good purpose would be for your retirement fund or educational fund for your children or for more beer money plus more pizza two years from now. This would ensure that you will leave your investment to grow for a set period of time and avoid being pressured into doing anything rash prior to the fulfillment of the purpose. Also, it will give you ample time to take profit, make adjustments, recover or pull out entirely depending on what is happening to your investment.
3. Once you are comfortable with the amount you are willing to invest and the length of time you are willing to hold, say a little prayer for prosperity or do some manifestation activity. It helps to be positive.
4. Google CoinMarketCap or CoinGecko. By Google, I just mean search it online. You can Bing it, Yahoo it, BRAVE it or whatever search engine you wish to use. I deliberately did not include any links so that you may start forming the habit of looking for stuff yourself. DYOR means you have to do everything yourself to be self reliant and resourceful.
5. On their home page, (We'll use CoinMarketCap) you will see the dashboard with a list of cryptocurrencies with headers for specific data or information like the name of the coin, price, market cap, volume, and so on. The coins are ranked according to market cap.
6. Familiarize yourself with the meaning of the headers by hovering your cursor on the letter "i" beside each one for information. Do not take the information for granted. These are basic things that are very useful to know well.
7. Look for the header "volume (24hr)" and click on it until the figures or numbers are arranged from highest to lowest. Once done, you will notice that the rank of the coins are in disorder but that is fine. It just means that it is now arranged according to transaction volume per 24 hours.
8. Take note of the first 20 coins that you see. A high transaction volume in 24 hours means a lot of people are trading this coin. It is safe to assume that it is not a fly by night coin because it is traded heavily. A lot of action is happening and this will not suddenly disappear in a short period of time.
Also, exclude from the list any coins that have been in circulation for less than a year even if they seem to be performing well. It requires some experience to manage such portfolio. If there are any, just replace them with the next best coin you could find from your last sort that fits the bill, no pun intended.
9. From the 20 coins you have listed, sort them again, this time according to marketcap. You would want to look for a coin among them that has the lowest marketcap and a significant amount of transaction volume. A low marketcap means there is a lot of room for the coin to grow in terms of price. I suggest you look up price, marketcap, total supply and circulating supply in Investopedia or Google it to have a better understanding of what they are and their relationship to one another.
What you need to avoid is a low marketcap coin with a low transaction volume. Although it may have the highest potential to increase in price, it is quite risky because only a few people are trading or patronizing it. Mass adoption is one of the major indicator of a success of a coin. This is the reason why I asked you to sort the list out first according to volume then marketcap.
10. Once you have sorted out everything, choose your top three. From there you could go back to the dashboard and click on each coin. This will bring you to its comprehensive information page. Gather all the information you could get to learn more about it. Visit their website for more information on their projects, milestones and achievements then join their social media groups to be updated with upcoming events, changes and announcements.
Social media is also a good source to gauge the sentiments of the members, patrons or investors of the coin since most of the coins are community driven. This is specially true to meme coins. If you are deciding between two or more meme coins, make sure to choose the one with the most number of followers and just choose one.
More followers means more supporters and a higher chance of being successful. There is a meme coin that was "neglected" by its developers for quite some time but because of the number of supporters, the coin persisted until the developers came back and took charge again.
When you are fully satisfied and confident with what you have learned, you may proceed to make your first purchase. If not, then you could go back to your initial top 20 list and choose another.
I probably should be making a guide on how to make your first purchase or how to stake your coin or when to take profit even when hodling but that would take time. I am sure there are plenty of articles here about it.
Anyway, I hope you find this post helpful. May you get the results that you want to achieve.
