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Important advices and tips for cryptocurrencies|
1) Cryptocurrencies are VERY HIGH RISK investments- You can get 1000% in a short time but you can also lose 1000% very fast
- Only investment the amount you are willing to lose
- If you cannot stand losing 20%, 30% or even 100%, cryptocurrencies is not for you. Do look at other investment instruments
- For safe investors, it is advisable to only allocate 10% of your total investments to high-risk instruments like cryptocurrencies
2) Decision to buy or sell is yours and yours alone- Do not blame others for your actions
- There will be a lot of rumours and chatter floating around so you have to decide yourself and take whatever action you think is necessary
3) Study and do research- It is important to know what you are getting into
- Read on the coins you are interested in and judge for yourself whether you want to invest in it
- There are links above on cryptocurrency news. You can also google for more information.
4) Have a proper strategy and do not trade with emotions- It is imperative that you have a proper strategy. DO NOT buy cryptocurrencies blindly
- Your strategy can change as you go along but it is important to stick to it
- Do not trade with emotions.
- Have a cut-off level where you might want to sell off your coins if it is making huge losses. However, for good coins, they will usually recover after a drop.
- Don't fall in love with a coin and hold it even if there are bad news on the coin
5) Don't keep too much money on exchanges- There are many instances where exchanges were hacked and investors' money were lost
- Only keep the amount you want to trade on exchanges. Transfer out the rest, preferably to a hardware wallet.
6) Ensure you really secure your hardware wallet by activating passphrase.- Remember that the 24-word recovery seed is the most important thing. If somebody stole it, they can just use a hardware wallet together with the recovery seed to gain access to your coins EVEN IF your hardware wallet is in a bank vault!
- Besides physically hiding the recovery seed all over the place, another easier method is to activate passphrase for your wallet
- With passphrase, even if somebody stole your 24-word recovery seed, they won't know or can't see the hidden wallet
- Refer the scenario below
| Hardware wallet | 24-word recovery seed | Passphrase | Remarks |
| Lost/Stolen | Safe | Not set | Coins are safe, just buy new device and recover |
| Lost/Stolen | Lost/stolen | Not set | Say bye-bye to your coins! |
| Safe | Lost/Stolen | Not set | Say bye-bye to your coins if seed stolen! |
| Safe | Lost/Stolen | Activated | Coins are safe, take steps for new seed |
| Lost/Stolen | Lost/Stolen | Activated | Say bye-bye to your coins! |
Ledger passphrase guide :
http://support.ledgerwallet.com/knowledge_...sphrase-optionsTrezor passphrase guide :
https://doc.satoshilabs.com/trezor-user/adv...d_settings.html7) Make your hardware wallet 24-word recovery seed is inaccessible- Remember that the 24-word recovery seed is the most important piece in your whole hardware wallet setup
- Below are a few tips:
----- a) Keep the recovery seed in a safe place e.g. safe deposit box
----- b) Instead of just writing down the 24-word in sequence, you can rearrange them so that they are out of sequence. Of course, if you do that, you have to remember the rearrangements! Example would be like switching word 1 and word 2.
----- c) Divide the 24-word in different sections and hide it at different places
- Those are just some examples. How you make the 24-word recovery inaccessible is entirely up to your creative imagination. Just make sure you remember how to unscramble your genius creativity!!!