Diamond Hands - Being prepared for the bear

The downtrend of the markets can prompt many investors to panic sell but there are some tools that can help to avoid acting solely on impulse

I don't believe I have to spend any time introducing the present situation of the crypto market. If you have any skin in the game you probably know that there is blood on the streets and most coins are in an apparent free fall. It's a total meltdown!

I'm not one to read charts and find patterns to try and predict what the market will do. I understand and respect those who have the patience and the skill (even though that is debatable) to do that, but it's just not my thing.

I think this is a good trial of fire for the so-called diamond hands. It's easy to yell "HODL" when things are going well and the general feeling is that numbers will go up forever. Not as easy when all you see is red.

I'm curious to see how people will react but above anything, I'm curious to see how I am going to react. I'm fairly new to crypto and I don't believe I have seen a persistent downtrend in the markets before. As I said, I don't spend time reading charts so I don't know if this is the infamous bear market, feared by so many, but either way, I must say that I don't feel remotely close to panic selling.

I have a few friends that got into crypto around the same time as I did but no matter how I tried, I couldn't get them to try Hive. Interestingly, all of them are very desperate and at least one of them already declared that he is done for good with this crypto thing.

I would be lying if I said I haven't been checking prices because I have but I can honestly say that I'm not shaken. Not even a little. But how can I keep my cool while my friends who are just as experienced (or unexperienced, depending on how you look at it) as me are losing their minds?

Well, I'm probably not qualified to provide a scientific answer but I think I have an idea of things that are helping me to keep calm during all this craziness.

Emotional intelligence

While I'm no Daniel Goleman I have done quite a lot of reading on Emotional Intelligence, as it's one of the topics that interest me the most when it comes to human psychology. I believe that played a definitive role in helping me understand how I react to external stimuli and better manage my response rather than acting by impulse and doing precipitated things such as panic selling.

Investing money I can afford to lose

There is no sugar-coating it. Losing money sucks and we will try to avoid it at all costs but losing money you don't really need is completely different from losing money you were counting on to pay for your rent, food, your kids' school and things like that.

I am fully aware that I'm very privileged and I have some money that I can invest and even if I lose it all, I would still be able to make ends meet. It's not a lot of money but I wouldn't risk a cent if that meant I may not be able to keep a roof over my head in the following month.

Knowing what I'm getting into

This is one of the most important things and, I can't stress this enough, since I'm uneducated (and a bit skeptical) on the art of reading crypto charts, I rely solely on knowing what and who (whenever is possible) is behind the projects I invest in.

In the crypto universe, there are countless scams and an equal number of projects that, even though are legit, are just poorly designed and are bound to fail and that's why this is so important to me.

Basic notion of risk management

As a professional project manager with over a decade of experience managing risk is part of my daily routine and because of that, I'm always thinking about the likelihood of one of my investments failing and the impact it would have on my portfolio and on my finances. From there, the next step is to diversify accordingly and try to reach a healthy balance between risk and reward.

Personally, I don't want to bet everything on a moonshot that might never happen but I also don't want to spread myself too thin and find myself depending on 15 different projects to moon so I can make a decent amount. I know I have a limited amount of resources so I try to prioritize them accordingly.

Final thoughts

A market meltdown can be scary and even devastating for those who are not mentally prepared. I don't trust luck or any prediction that some gurus make on their YouTube channels so my best and only weapon is believing that I have done the best with the resources I have at my disposal and that I have a minimal understanding of the projects I'm getting into.

In fact, times like these present great opportunities if you believe in the fundamentals of those projects. Sometimes the best thing you can do is buy when everyone else is selling

Diamond melts at 4,027º C or 7,280º F so these hands can take the heat.

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