A chat with crypto investor and engineer Lorenzo Decaria

In this interview I am going to try to give you the point of view of how an engineer approaches the problem of investing in crypto. I am sure he will give you a different point of view to learn from.

Hello Lorenzo, can you start by giving us an overview of who are you?

I am a software engineer and I started trading in 2011. I started with forex and then switched to stocks and crypto. I have several projects in the works, all related to investing.

I have a YouTube channel where I discuss investment topics, I built a mining rig to mine my own crypto and I’m starting a website where I’d like to post blog articles. One interesting thing I’m working on is a suite of custom built indicators for TradingView; it includes technical analysis indicators, trend followers and others. Very useful!

What kind of research do you do before investing in a cryptocurrency?

Most of the things you need to know are already on the coin’s website: project, white paper, roadmap, development team, etc… these are the first things I look at when doing my homework. A critical aspect for me is the team behind the project; I always check names, seek their profiles on linkedin or such just to have a better idea of who’s behind this project. They might have a brilliant past or some shady experiences in their history and this influences my bias. A second thing I look at is adoption; I want to see wide adoption on the project or at least some sparking interest when they hit a new milestone.

What data about a cryptocurrency is important to you?

First of all market capitalization. I’m not interested in “penny tokens” because there’s a good one every hundreds or thousands, so it’s like a needle in a haystack… Here we’re doing things professionally so I don’t rely on luck.

What calculations or analyses do you do before investing?

I’m a technical analysis investor, which means I mainly rely on what I see on the charts; this doesn’t mean that my bias isn’t influenced by fundamentals. As I said before, I do my own research, but when I decide to pull the trigger is highly dependent on technical analysis. Meaning I identify demand and supply areas and I try to buy as close to demand areas as I can.

What is your philosophy about diversification?

I only have 4 cryptocurrencies in my portfolio, 5 if you consider the one I’m accumulating by mining instead of buying directly on exchanges.

Diversification is always a must when investing, but in such an unregulated market makes no sense to invest in small projects because of their high manipulation risk. Lots of ICOs turned out to be scams, where the initial offer was launched and shortly after, as in the most textbook example of a pump and dump scheme, everyone was left with a few pennies. This is not for me.

My diversification includes stocks, ETFs and others.

What do you regularly check in the months after buying?

Mainly if they are able to keep up with their roadmap and the currency capitalization compared to Bitcoin. This helps me to understand if that particular coin is growing or not against the giant of cryptos. I also check its rank in the global market capitalization to understand how many investors are joining the project and how fast is it growing.

Do you buy to hold long term or short term?

I generally buy and hold for the long term; trading is quite tricky in such a volatile market and if you do you have to be prepared to accept losses. I also mine my own crypto (Monero at the moment and Ethereum in the past) because I still believe in the growth potential of the future.

Do you follow crypto news?

Cointelegraph and Coindesk are my go-to sites for news. I Coinmarketcap to rather monitor capitalization, dominance and relative strength.

What questions would you ask to a super expert crypto investor or developer?

I would just like to know what does this crypto market need in order to be stabilized (beside regulation) and what can we do to promote adoption rather than speculation.

What is the top advice you would give me about investing in crypto?

Same as when you want to invest in stocks: do a lot of research, learn about the product and investigate as much as you can. If you fall in love with one and you think the future is going to be bright, go for it. Only time will tell. But don’t just “follow the herd”.

Thanks to Lorenzo for chatting with us and I hope this has been useful to all the readers.

I am looking for people who invests in crypto and who are happy to tell me what their goals are, the research method they use and the data they look for. 
Get in touch in the comments or on Twitter.

Also, I am the creator of Decryptoray, a tool that helps crypto investors analyse and compare cryptocurrencies to make better investments.