Renowned cryptocurrency expert Lark Davis recently shared invaluable insights in a session gathered by the CoinSpeech team. Below are the most pivotal moments and advice from Lark Davis to help you stay on top of your crypto game. You can watch Lark Davis’s new video below.
Importance of Having a Plan
Most cryptocurrency investors stumble because they dive into the market without a solid plan. As Davis stresses, “in most cases you actually have more time than you think and aping is not necessarily the best call.” Breaking the process into buying and selling is crucial for avoiding unnecessary losses.
Critical Buying Tips
- A bad entry can significantly affect your profits; hence it’s pivotal to “buy low, obviously.”
- Davis mentions setting “a time range and buying in for set amount of weeks or months” to create an average price entry.
- Look to add positions during major dips, not pumps, for more strategic timing.
Knowing When to Sell
Selling correctly is as important as buying smartly. Lark delineates between selling for a loss and selling for a profit. His approach includes:
- Don’t sell in a panic simply because prices are down: “The fundamentals of the coin have not changed, just your opinion of it because the price is down.”
- Sell when the asset doesn’t meet your pre-set expectations: “Something like… the Partnerships aren’t working out, that’s a fundamental reason to sell at a loss.”
- For profits, consider having a “set multiplier goal” or incremental profit-taking strategies.
Conviction: Staying the Course
“Lark Davis explains the importance of having a strong underlying thesis to guide your investment decisions. He advises to “FUD your own bags” which means critically evaluating your own holdings. Knowing the criticisms and failures of a coin helps you better brace for market fluctuations.”
Identify Short-Term and Big Picture Catalysts
- Short-term catalysts might involve rumor-based investments like “a salon ETF rumor” or events like a main net upgrade.
- Long-term strategies should focus on larger trends and few well-researched sectors, such as “deep in decentralized physical infrastructure networks or artificial intelligence.”
Navigating Common Mistakes
Plans and conviction will be tested by normal investing pitfalls: Following others blindly:
- “You should never blindly follow me or anyone else,” Lark emphasizes. “It is your money and you need to think for yourself.”
- Building your own research and conviction is essential for long-term success.
The Crucial Act of Selling
Even the strongest conviction may not withstand market cycles, but Lark Davis emphasizes the importance of securing your profits when the time is ripe. “If you don’t take your profits, the market will take them for you.”