The cryptocurrency market has been quite volatile over the past few months, making it a perfect playground for speculation and quick profits. However, it is important to tread carefully and keep the following points in mind:
1. Follow the hype, but don't ride the train too late. It's safe to say that when there's gathering interest around a particular coin, then the time is ripe to make a quick investment in it. I made past mistakes where I researched too much into a coin and ignored the general idea about it from the masses. A prime example is Bitcoin - I knew that the ETF would be rejected for various reasons, the primary of which is the fact that the SEC would not accept an ETF of such a volatile asset, where it pumped around 30% over a short period of time as soon as the ETF decision started nearing. I also sold due to the fact that it is an inherently faulty currency due to transaction malleability. The latter only surfaced months after I had already known about it; in the meantime, the price kept rising due to the hype. However it's important to keep in mind that if a train is picking up speed, it's unwise to hop on board as you can hurt yourself. Either jump at the start or near enough to it, or just wait until for the next dump or the next train. Which brings me to...
2. What goes up must go down. That doesn't mean it will go down to previous levels, and more often than not a higher floor is set. However, it WILL go down after reaching its peak. Buy at the next floor, don't buy at the peak. Sounds simple? Trust me, it's more difficult than it sounds.
3. Do your own research. Yes, it contrasts the first point a bit, but it's important that you do some sort of background research before investing. That way you can avoid pump and dumps and scam ICOs.
4. Trust everyone and no one. It's impossible to be well-versed on every aspect of a crypto; you need to trust other people. For example I'm a lawyer so I can easily comprehend and spot certain regulatory patterns which would push a coin high, such as accepting a coin as legal tender (BTC in Japan). However, I'm hopeless when it comes to spotting a good developer or not. At the same time, always double-check information - one source is not good enough. There will always be others confirming or rejecting any given point.
5. Thou shalt not love thy investment. Over half of the current cryptocurrencies will die out sooner or later, never to be heard of again. Don't hold onto your investment with wild dreams of buying a Lamborghini with the returns (unless you have invested the equivalent of one into a coin). Only a handful of coins have true potential to lead the market for months to come, the primary of which are Bitcoin and Ethereum. As for the others...
6. Don't be greedy. A 10% profit on an investment in a couple of weeks is an unbelievable one compared to the stock markets. If you are well-versed in cryptocurrencies, you might even risk holding on for a higher percentage of returns - you're more than free to do so. However, don't hold onto your investment waiting for a 1000% profit return. They do happen but they might not. Of course, if you're buying to hold long-term because you genuinely believe in the project, then that's a different matter entirely.
As always: never invest more than you can afford to lose. And never keep all your eggs in one basket!