Avoid losses and increase your profits💰💯💯
Cryptocurrencies have now become an integral part of the financial landscape with many institutions, executives or investors interested in them as a market principle to be considered. The emergence of Bitcoin just a few years ago has led to the emergence of thousands of cryptocurrencies today. Currently, it is difficult to develop a clear strategy and specific investment criteria, but some rules and basics can be provided for successful cryptocurrency trading.
The necessity of entering the market with a specific plan
Define your investment strategy
Taking market risks into account
Cryptocurrency market is not a paradise for riches
First, you must define who you are as an investor:
Currently, there are thousands of cryptocurrencies with different characteristics, many of which are illiquid and therefore more risky. While a smaller number of these cryptocurrencies are more like gambling than investing. While there are cryptocurrencies that are highly liquid and suitable for medium and long-term ownership and investment.
The important thing will be to choose the asset in question that you want to continue with and invest or speculate in. Every investor has a different profile or identity which involves their approach and understanding of the market and their goals for trading or investing, so it is important to determine the maximum loss tolerance to measure the risks you are willing to take. It is also important to set time horizons, and ask questions such as:
Should I invest in the very short term? Medium term? Long term?
Example:
In the profile of a particular investor who is not working full time monitoring his investment, it is better for example to prefer the medium/long term to avoid strong fluctuations in the short term (days/weeks).
While the nature of the project's work also reveals several types and categories of digital currencies, such as:
Ethereum, which presents itself as a global computer project that can be used to run different projects and networks, has already been exploited by many projects such as: BNB (formerly), OMG, Augur, CHSB SwissBorg, etc.
These cryptocurrencies for projects based on the Ethereum blockchain can be traded normally. While there are cryptocurrencies that aim to achieve privacy and others to improve communication...
Each digital currency has its own abbreviation or index, for example Bitcoin is symbolized by the symbol BTC, Ethereum ETH, Ripple XRP, and they are all major digital currencies, while there are digital tokens, which are those that do not have their own blockchain, but are based on a host blockchain, such as Ethereum or Blockchain #Binane
Define your investment strategy
Depending on your aforementioned profile, it is important to determine your ability to analyze projects, research their fundamentals and then choose a viable investment strategy. The most important point to consider is knowing the basics of money management. Therefore, it is important to answer some questions before going ahead and investing in the cryptocurrency market:
What is my current financial situation?
What are my time horizons and am I allowed to sit in front of the screen for long periods of time?
What extreme movements can I expect during this period?
What would be the ideal distribution between cryptocurrencies of different sizes?
Is it better to go for more liquid cryptocurrencies or less liquid ones?
According to these criteria, it is important to choose an optimal money management strategy. The most important thing is also to get your bearings, especially for beginners. You should invest gradually in the market. Gaining experience over time is very important as it makes it possible to reduce the risks that remain high with lack of experience. To increase your experience in the market, you should regularly monitor the market, books, records, and websites.
It is better to be careful when moving in the cryptocurrency market, and you should pay attention to the effect of leverage and other tools that are considered advanced for beginners. Delving into the market will allow you to improve your strategy as much as possible over time.
Taking market risks into account
When investing in the market, you should be careful and take the phrase "what is invested in the market can be lost completely" as a motto. You should always remember this phrase, so that even if the entire investment amount is lost, it does not hurt, as you are aware of this and allocate to what you can afford to lose. Compliance with this rule is a matter of safety.
Cryptocurrencies do not follow an Asian price trend and remain highly volatile, which is not necessarily a bad thing in itself in terms of trading. A bad economic situation can negatively multiply the volatility of cryptocurrencies and this can be costly.
So you should not deprive yourself of the personal needs to create capital directed to the market and the speech here is directed especially to the young audience on which the industry focuses.
Cryptocurrency trading is good, with money you may not need for essential things.
Since cryptocurrencies have created a very large number of wealthy people, the promises of quick wealth are very numerous, and there are many offers that promise to become rich in a short time using cryptocurrencies.
Here you should be careful and know that a good deal that comes to you in a perfect guise is usually not a good deal at all. Beware of sites that convey the idea that your investments in crypto will make you rich quickly. Do not hesitate to refer to the blacklist of the most important crypto projects to know the extent of the risk surrounding the market.
Although short-term trading is often presented as a quick way to get rich, for the inexperienced, it is one of the riskiest methods. Doubling positions without sufficient skills leads to systematically doubling risks.
There are no miracles about cryptocurrency prices. Cryptocurrencies need to be managed so that they can represent a fairly significant part of your income, through capital management techniques and other skills.
Type of your wallet with different cryptocurrencies
As we mentioned at the beginning of the article, each cryptocurrency has certain characteristics, some of which are liquid, some of which are highly volatile, and some of which have a meme character...
For example, Ethereum, in comparison to its valuation, is one of the most liquid cryptocurrencies, which also offers high performance. Bitcoin also remains one of the largest and most liquid cryptocurrencies, with a particularly interesting annual performance. Here too, it is necessary to make a clear distinction between utility cryptocurrencies (BTC, ETH, etc.) and purely speculative digital tokens and coins.
Depending on these parameters, you will need to ensure proper diversification of your portfolio, which will be one of the pillars of your strategy. It is often interesting to mix highly liquid and safer crypto assets with less liquid assets and long-term cryptocurrencies. In addition to the above tips, it is also important to choose a reliable and highly liquid trading platform. There are already many reliable platforms such as #Binane , which is characterized by high liquidity that enables users to trade at high speed, in addition to its security compared to other trading platforms and its support for many cryptocurrencies.
You must enter the market with a specific plan, determine your investment strategy, take market risks into consideration, and diversify your portfolio with different cryptocurrencies.
