What’s the difference between an amateur boxer and a professional boxer? The amateur overreacts wildly to their opponent’s every movement, while the professional conserves energy and shifts with just enough finesse to dodge or advance. The same difference is true between the amateur crypto investor and the professional crypto investor.

The amateur is trigger-happy. If their coin falls 5% in price, they panic and sell, imagining catastrophic loss. Then when that coin goes up 15% the next day, they panic and buy, imagining that they’re missing out. By the end of the year, they sustain large losses and owe a sizable tax bill, despite the market doing well.

The good news is that you can transform from jittery amateur to steady professional with just a bit of planning, rule-setting, and sticky-note reminders. Here's how!

Make your cryptocurrency difficult to reach. Buy it, put a chunk on a hardware wallet, and then store that wallet in a safety deposit box. Now you’ll always think twice before selling in the heat of the moment. Programs like Crypto.com staking and Gemini Earn lock up your crypto as well in return for interest payments. If it weren't for my locked-away crypto, I would have panic most my portfolio during the Covid flash crash!

Put limits on how much crypto you’re allowed to trade in a given month. Panic selling or panic buying will never cause you problems if you’re not allowed to touch the majority of your portfolio. For example, if you own $10,000 worth of crypto, you could make the rule that you're only allowed to trade $1,000 worth in a given month.

Set action thresholds. Ignore all price movements below a certain threshold and move only when you sense a true blockbuster opportunity. For example, I don't make a move unless a coin or token I own has fallen by 50-75% (wherein I might buy more) or risen by 100-200% for the same reason (wherein I might take a little profit). Some investors have bigger action thresholds, like 90% loss or 10x gain.

Don't buy sharp rises and don't sell sharp falls. Chasing after a coin that's gone up 300% in a week can work out sometimes, but more often it'll retrace and you'll be down catastrophically. Similarly, selling a coin that's fallen 40% in a day can make you curse the rebound. I have a personal rule that I never chase after cryptos; with a little patience, I've found there's usually a next time.

Remind yourself that you're aiming for spectacular returns. Crypto history has shown us again and again that the surest way to spectacular returns is through long-term discipline and weathering painful bear markets and not through riding short-term mania. So what if you're down or up double digits on a given day, you're investing for the far future.

Remind yourself that everyone is trying to manipulate you. Much of cryptocurrency is manipulated by “whale” holders, and they’ll scheme together to drive the price down or up in order to take advantage of beginners. Worse are ill-informed or bad faith journalists, social media influencers with hidden motives, and pump-and-dump shills. Don’t take the bait or let sensationalized headlines scare you; stick to the plan.

Plan your buys and sales in advance. Plan ahead of time how much and at what price you'll take profits and how much and at what price you'll double-down. That way, you take emotions out of the game and when the moment comes, you won't blink. An example of a plan is to say that you'll sell 1/3rd of your portfolio after a 3X and another 1/3rd after a 10x. And that you'll double your portfolio if it falls 50% and double it again if it falls 50% after that (set large multiples!). Another plan could be that you'll never sell and will only accumulate. Both are valid and depend on your life circumstances.

Like diet and exercise, the techniques above are easy to implement but difficult to stick to over the long haul. But they sure as hell beat becoming a professional the old-fashioned way: by being punched so hard and so often you're forced to adapt.

Enjoyed this article? Please share it, follow us on Twitter, and subscribe to our free Friday newsletter! It helps us out and keeps your investing mind sharp. Win-win!