Note: Prices used in the post are for learning purposes, they may not be the realtime pricing.
Let's dive in
First of all, let me tell you how I minimize losses when I buy a coin and it's price value drops.
I do one of these two things or both if my risk appetite and financial power allow it.
1. I use Dollar Cost Averaging tactic
Buy coins at a fixed fee at regular intervals without caring much about price. For example, I could buy xrp coins worth $10 every day.
Scenario:
Day 1:
Purchase xrp worth $10 at a price of $2.4 each. Which is 10 / 2.4 = 4.167 xrp
Day 2:
Purchase xrp worth $10 at a price of $2.45 each. Which is 10 / 2.45 = 4.0817 xrp
Day 3:
Purchase xrp worth $10 at a price of $2.2 each. Which is 10 / 2.2 = 4.545 xrp
That means I have bought a total of 4.167 + 4.0817 + 4.545 = 12.793 xrp at a total price of $30
My average cost per xrp is 30 / 12.793 = $2.345
2. I will hold the coin longer (usually a week to 3 weeks) until the price value goes up, then I sell all coins. That is why I invest in the coins I trust, such as $XRP, SOL and BNB.
Putting your investment in more than one coin is a recommended risk management strategy.
You can't lose all your investment at once. You can also make profits from one of the coins today and make money from other coins later instead of being under pressure if you put all your eggs in one basket and the market goes against you.
How do I maximize profits at the moment of selling?
My trick is to sell a portion/percentage of the coins whenever the price increases.
I can sell 10% of the coin at the current price, then 20% at an increased price, and 70% at a more increased price.
How do I know the price changes?
Fortunately, the Binance App has an alert feature. That is how I do it.
Steps:
1. Tap a coin pair from the market or trade tab. 2. Tap Alert 3. Set alert type to when price increases to 4. Put the amount 5. Choose always and save.
That's it for today
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