Sam’s 10 Principles For Crypto Trading Success

By Sam Deering July 25, 2021 In Trading

Cryptocurrency has become extremely popular in Australia and worldwide as new people enter the fast-paced world of crypto trading. After crypto trading myself since 2017, I’ve learnt so much and would like to share with you some of the guidelines I follow to protect myself and make good decisions when trading cryptos.

Disclaimer: Before you continue reading, please note that I am not a financial adviser or professional trader, and do not recommend you follow my guidelines blindly. This is a list of the guidelines I personally follow, provided to you for free educational and entertainment purposes.

Sam’s 10 Crypto Principles:

  1. Take Profits
  2. Manage Your Risk
  3. Investor vs Trader
  4. Set Your Stop Loss
  5. Never Fall in Love with a Coin
  6. Always Do Your Own Research
  7. You Make Money in the Buy
  8. Stay Aware of Your Emotions
  9. Quality Over Quantity
  10. Keep Up to Date with News

1. Take Profits

My rule #1 is simple. When my trade goes up, I always take profits. Sometimes I sell all of it, and sometimes I partially sell it (ie, sometimes when it has doubled in dollar value, I sell my initial investment so then I can “freeroll” on the rest to make more profits, with the plan of selling the rest at a set higher price target).


Nobody ever lost money taking a profit.

Bernard Baruch, 1800’s Finance Businessman

Let’s be clear – taking profit is not about getting money out of crypto, it’s about being able to actualise profits, essentially to put more in at a later time. It can either be sold back into Bitcoin (usually) or completely sold back into fiat (if I need to buy something with fiat – or pay my taxes!).

2. Manage Your Risk

Everyone has heard the saying “only risk what you are willing to lose”, this simple statement is particularly important in the crypto markets where every man (and his dog) is trading well-earnt savings, mostly with no formal trading knowledge and experience. Also, this new market is crazy, we have seen some people make millions and we have seen some people lose everything.

Risk comes from not knowing what you are doing.

Warren Buffet, Investor Extraordinaire

To manage my risk, I have a few principles I follow:

  • Not investing the majority of total funds in one trade (generally I use 5% per trade, and some people use as little as 2% per trade. Keeping this low means that no any single trade will drain your account).
  • Not buying with debt such as credit cards or borrowing to invest (this is a sure way to over-extend yourself and end up in trouble. Even temporary positions can prolong into long-term interest bearing debt).
  • Take security seriously (I always use trusted exchanges and set up two-factor authentication. SMS code-based logins can be hacked more easily as we recently saw in the news).
  • Keeping risk within my limits = keeping my stress levels down (this one is super-important for me to continue doing this long-term – my health is always my #1 priority as the saying goes “you can’t spend a billion dollars on your death bed”).
  • Stay away from leverage and margin trading (the main reason I follow this principle is because I don’t fully understand how to use margin correctly yet. We’ve also seen so many people get burnt with Bitcoin margin trading recently especially when everyone is so bullish and going long “to the moon”).

A major lesson in risk management is that a ‘receding sea’ is not a lucky offer of an extra piece of free beach, but a warning sign of an upcoming tsunami.

Jos Berkemeijer, Experienced Investor

3. Investor vs Trader

One of the things my mentor taught me is to classify an opportunity as either a trade or as an investment. A trade would be a short-to-medium-term purchase with the clear intention of selling at a profit. An investment would be a longer-term purchase, with the intention to never sell, or at least not to sell short-to-medium-term.

Once you’ve established what the opportunity is for you, then you can make clear, concise, informed decisions about the purchase. It is then easier for you to create a plan and a strategy to follow. For example, when making a trade you can define an buy price, timeframe and sell price, and for an investment you can simply just write down why you are buying it, and not worry about selling it unless that reason changes.

You have to identify your weaknesses and work to change. Keep a trading diary – write down your reasons for entering and exiting every trade. Look for repetitive patterns of success and failure.

Alexander Elder, Experienced Professional Trader

Having a clear strategy helps prevent panic selling should the market turn quickly and I get cold feet, which seems like most days in crypto. For example, if I am buying BTC as an investment, then I plan to simply never sell, I can simply pick up more when it dips, and might consider borrowing against it in the future. Whereas if I think an altcoin is a decent trade opportunity, I can set entry point, timeframe, and sell price before I even buy it. Sounds simple? It is.

4. Set Your Stop Loss

When I’m crypto trading, I always have a stop loss set; it just protects me from taking massive hits when I’m wrong. A stop-loss simply means to set a fixed selling price so that if it drops in price you can sell before it drops further. For example, taking a 5% loss is always better than taking a 20% loss. These saving will add up in the long run and could be the difference between a successful trader and losing one.

It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.

George Soros, Billionaire Investor

Where to place a stop loss depends on what coin you’re buying, how volatile the price is, and other factors. I would do some education on how to trade and place stop losses, some of my friends have said “placing a stop loss before I go to bed makes me sleep better”. There are also some great online tools that can help you automate some things.

5. Never Fall in Love with a Coin

This rule just keeps me grounded as I try to remove the human biases that occur when you buy a coin, especially if you really like a project (for any reason). Once you “own” it, you become attached to it and start telling everyone how great it is. This can be detrimental to your profits, because as cognitive dissonance sets in you may ignore red flags that arise. When you know you should sell but love the coin, so you just HODL and endure the pain, as you’d rather take the losses than be wrong. That sucks.

Pride is a great banana peel, as are hope, fear and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions.

Ed Seykota, Experienced Professional Trader

Don’t be a financial adviser (if you’re not one), you’ll be left with egg on your face if the coin suddenly turns as people you recommended it to lose their hard earnt money. Usually crypto trading tips are based purely on speculation from YouTube or bullish news stories.

When you’re emotionally married to an investment, you lose the judgment rationality that defines successful investors. I want no position to be so large in the portfolio that we’re emotionally invested in the outcome. It’s keeping that objective judgment that is so important to our success.

Ken Griffin, Billionaire Fund Manager

6. Do Your Own Research (DYOR)

Doing extensive research is particularly important in the cryptocurrency market as most of the projects are brand new startups. Researching fundamentals is important for both investing and trading. Ideally you can back up a trade with both strong fundamentals and strong technicals.

Know what you own, and know why you own it.

Peter Lynch, Legendary Billionaire Fund Manager

DOYR allows me to form a picture of the trade in my head and make my own decisions. And when I get a tip, I don’t just buy it blindly – I’ll take a closer look at it, these are some of the things I look for:

  • Project website (mainly just learning about the project)
  • Social media (checking for recent activity and people involved)
  • Project category (checking the market and competitors)
  • Coin value proposition (what is the utility/purpose of the coin)
  • Circulating supply (is the supply allocation and distribution sensible)
  • Technical analysis (do the graphs show an obvious entry point)
  • Recent news (checking the crypto news to avoid making a bad trade)
  • Pump and dump (if I looks like a pump and dump I stay away)
  • The pumpamentals.

I’m essentially looking for red flags to see if the project is active, who is running it and has got a good use case. Here is an example of a coin which i recently researched.

An investment in knowledge pays the best interest.

Benjamin Franklin, 1700s Intellectual Legend

If you’re a beginner, here are some useful guides:

7. You Make Money in the Buy

You may have heard these sayings before: “you make the money when you buy” or “buy red, sell green”. This sounds simple but in reality it is very hard to follow as our human emotions grab us the opposite way.

The intelligent investor is a realist who sells to optimists and buys from pessimists.

Benjamin Graham, The Intelligent Investor

A good example of this is back in early 2018 when we saw a lot of people buy Bitcoin at the top around AU$25,000 (after it had already shot up from AU$1,000). Then when it started to fall, they panic sold at a loss. If they decided to buy as an investment, they would have held and the price would have bounced back eventually as we saw. Whereas if they decided to buy as a trade, then the $25,000 entry point after an already short-term 84% increase, in hindsight doesn’t seem like a great idea.

Be fearful when others are greedy, and greedy when others are fearful.

Warren Buffet, Investor Extraordinaire

8. Stay Aware of Your Emotions

Keeping control of your emotions is arguably one of the hardest things to do when trading. One principle I follow to counteract this is “never panic buy or panic sell”. In the past, there have been countless times where I have panic sold a position, only to see it go back up once I sold. The crypto market is highly volatile and this happens all the time.

Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.

Benjamin Graham, The Intelligent Investor

If I make a bad trade, which I have many a time, I don’t dwell on it for long anymore, I just assess why it went wrong, try to correct it for next time and then forget it and move on.

If you’re always looking back at what you’ve lost, you’ll never discover the treasure that lies just up ahead.

J.E.B. Spredemann, Fiction Author

9. Quality Over Quantity

Simply put, less is more. I would rather have 5 quality coins than 20 average coins. I generally stay away from “shitcoins” (anything with a useless value proposition) as they historically don’t survive the bear market and are very unpredictable.

It’s not surprising that most cryptocurrency project failures happen when the market is bleeding. The largest number of cryptocurrency projects disappeared during the early months of 2019 when the bear market was at its most savage.

Yahoo Finance

It shouldn’t be too surprising that 92% of crypto projects fail, according to Yahoo Finance, of the 1,840 failed cryptocurrency projects since 2017, the majority were scams. It’s easier to just stay away from these and focus on the growing number of quality crypto and blockchain projects emerging.

10. Keep Up to Date with News

After running Crypto News in Australia for a few years now, I can tell you with some confidence that crypto trading and crypto news are positively correlated. A single news story can make or break a project, that’s why we always strive to publish independent unbiased news that primarily focusing on the facts, keeping our opinions to a minimum. We also publish news about about the latest scams going around, to help protect you against losing your funds.

Our partners provide you with the expert advice and help you particpate in the crypto space.

The crypto market moves fast, and new projects and developments are emerging daily, so it pays in many ways to stay updated. The best ways to stay up to date with the news:

The Crypto News Team


To conclude, follow your instinct – if something doesn’t feel right, it usually isn’t. Trust yourself – make informed decisions, and stick to them. Best of luck on your crypto adventure!

For a bit of fun, here are the rules again, depicted by trading memes:

Sam Deering

Sam Deering

Sam Deering is a cryptocurrency enthusiast with background in computer programming. He loves to learn, share and write about anything crypto news.

You may also like