The gambler’s guide to stocks, crypto, and recognising opportunities

Whether you’re an experienced gambler, investor, or cryptocurrency enthusiast, it’s essential to know when to buy, sell, and stop, as this plays a significant role in your success or potential financial loss.

In this guide, we take a closer look at how you can successfully manage your bankroll (and your gambling winnings!), how to make better choices in terms of stocks and crypto and some of the mistakes you must try to avoid along the way.

Stocks & crypto: Recognising opportunities

With stocks and cryptocurrencies, your opportunities arise from market movements that align with your financial goals. Below, you will find a few ideas that will help you spot them.

In stocks: Fundamental & technical analysis

With fundamental analysis, you evaluate a company’s financial health and look for growth in key metrics such as earnings, revenue, profit margins, and management effectiveness. For instance, if you see a company that consistently grows revenue and profits but experiences a temporary dip in its stock price due to an external event, it could be the perfect time to buy.

Technical analysis involves identifying trends in price movements and potential turning points. Therefore, you will look for indicators such as moving averages, the Relative Strength Index, and the Moving Average Convergence Divergence (MACD) to determine when a stock price might rise or fall. Both help you find entry points for buying or selling.

Stay on top of the news

You want to ensure that you pay attention to key developments, such as major news, macroeconomic trends, and company earnings reports. 

In cryptocurrency: Many points to consider

There are a lot more factors to consider, including volatility, trading alerts, and market sentiment, when investing in cryptocurrencies of any kind. That's why it's common to ask if you're investing or gambling with crypto. Let's explore the matter further:

Volatility

One aspect that distinguishes crypto from traditional markets is its inherent volatility. This volatility creates numerous opportunities, as major price swings provide the chance to buy low and sell high.

Let’s say Bitcoin drops by 10% due to some financial events, but the long-term outlook remains positive; it could be the ideal time to buy. However, if the outcome does not look promising in the long term, it’s probably a good idea to consider selling.

Many guides offer predictions for the price of Bitcoin, Ethereum, or other cryptocurrencies to help you determine whether they are a good investment at this particular moment. Just make sure to trust only reputable sites!

Trading & alerts

It might be a good idea to automate your trading and alerts, considering crypto markets are open 24/7. These markets move fast, so be sure to set price alerts (there are a lot of apps to help with that) to ensure you get notifications when coins of interest hit your target price. You can also use bots to automate your trading strategies and take advantage of market fluctuations.

Community focus

The reality is that social media and community heavily influence cryptocurrencies. You can get a lot of insight into how traders feel about the future of coins via platforms like X, Reddit, and Telegram. The price of coins like Ethereum can fluctuate rapidly in response to news about new updates or the launch of a new DeFi project.

Pro Tip: Always stick to the fundamentals and consider the underlying utility of the coin, its community, and the long-term viability thereof. This is essential for both trading with crypto and playing at crypto casinos. Know your currency!

Know when to buy and when to sell

When you’re new to cryptocurrency buy and sell procedures or investments, there are a couple of things you need to understand and add to your foundations. After all, the goal is to maximise your profits and minimise your losses.

With stocks and crypto, you should:

1. Buy low and sell high

This is not a new trick; in fact, it’s a widely-known one that stock traders have kept close to their hearts. However, it can be quite challenging to determine when the market is at its lowest or highest point. The ideal time to buy stocks is when the price has dropped due to market fear, never because of company-related issues.

If there’s no big reason for the drop, it’s a quick way to get into crypto at a lower cost. However, it’s essential to conduct thorough research and verify that the long-term potential remains intact.

2. Set a target price

Whether you’re investing or betting, it’s always important to set clear goals. This means setting a price point at which you aim to sell or buy. Additionally, establish a stop-loss price to safeguard yourself against future losses.

3. Leave emotions out of the equation

If there’s one thing you don’t want to do, it's let your emotions drive your actions. Whether it’s the euphoria of a win or the frustration of a loss, you don’t bring it to the table. Emotional decisions often lead to unfavourable outcomes. Stick to a strategy and always avoid chasing losses. Most importantly, listen to your gut when it warns you to take a step back.

Gambling hot tips

Much like with investing, there are certain rules and tips to keep in mind to make the most of your ‘investment’ into this form of entertainment.

• Know your limits: You’ve probably heard it a thousand times, and chances are you’ll hear it a thousand more. The fact remains that you need to set your financial limits before you even start. Determine how much you’re willing to spend or lose, set your budget and stick to it.
• Hot and cold streaks: Learn how to recognise them and don't submit to cognitive biases. Every player has winning phases (hot streaks) and losing phases (cold streaks). It’s important to resist the urge to keep raising your bets when on a hot streak and step back when on a losing streak. Practice discipline for a more successful outcome.
• Manage your winnings: Another important factor is knowing how to maintain a balance in your finances. Managing your gambling winnings plays a significant role. If you win a large sum of money, ensure you have a plan in place for the entire amount. Otherwise, it will be gone as soon as it reaches your bank account.
• Reinvest some of your winnings: A good tip for a big win is to reinvest a portion of it into one of your more stable investments, such as real estate or stock. This could be highly beneficial as a long-term investment and give you that extra cushioning for steady wealth growth.

The impact of wins and losses

Your emotions play a major role in your financial decision-making. By understanding the psychology behind gambling or investing and behind wins and losses, you can make informed choices that lead to smarter decisions in the long run.

Wins tend to create a feeling of overconfidence. You might feel like your winning streak will never end, which can lead to risky behaviour. This is also known as the ‘gambler’s fallacy’, where you believe past wins or losses influence future outcomes.

To counter this, be sure to set clear and realistic winning goals and avoid the temptation to bet more than you planned on.

Here are a few key tips to remember:

1. Develop a winning strategy

A winning strategy is vital for investors and gamblers. With a winning strategy, you can stay disciplined no matter what situation you find yourself in.

2. Research is key

Always do your research first. Never make a bet or invest without first having a clear understanding of the market or the games you’re playing. If you invest in stock, it’s important to do research on earnings reports, growth potential and its competitive positions.

In terms of gambling, you want to study and understand the odds, probabilities and possible outcomes before placing your wager.

3. Start small

Another tip you’ve probably heard before, and with good reason. It doesn’t matter if you’re gambling or investing; it’s best to start with a smaller amount. This will allow you to get comfortable with the risks involved while ensuring you don’t put your entire bankroll at risk from the get-go. 

Once you become more confident and gain more experience, you can look into increasing your bets or investments.

4. Risk management

Another element vital to success is risk management. This means setting a budget and sticking to it. Whether you’re investing in cryptocurrency or playing casino games, always determine how much you can comfortably lose and don’t exceed that amount.

5. Break down your winnings

One thing that might be beneficial is breaking down your winnings and splitting them in a way that benefits you in the long run.

• 50% (growth investment): Put 50% of your winnings towards crypto and stocks or other growth assets that give you the potential for long-term financial growth.
• 30% (less risky investments): Put another 30% towards some more stable investments like dividend stocks or real estate. These provide for a safe and steady income.
• 20% (spending): Of course, we won’t leave out spending. You can take 20% of the winnings to play more games, or even go on vacation, buy something nice or just have fun.

With this breakdown, you get to enjoy your winnings instantly and over a longer period of time, making the most of what you’ve won.

It’s all about discipline

When it comes to investment or gambling, confidence comes from knowing when to stop. Always stop when you hit your win target. Don’t let greed shift the needle. Stick to your decisions. And when you hit your loss limit, call it quits. Trying to chase your wins will simply lead to disappointment and frustration.

When you’re not sure what to do, it’s best to take a step back. Go outside, take a walk or do something to clear your mind. Don’t make impulsive decisions based on fleeting emotions. Don't forget: responsible gambling and investing are key!