Have you heard about the guy who suddenly made millions of dollars from investing in Bitcoin? Or have you read about the story of a man who earned unimaginable amounts from an ICO investment?
Sure thing, you did. But we also bet that you have seen countless stories of failure from cryptocurrency investments.
WE DON’T WANT YOU TO FAIL!
Our team from Crypto Base Scanner envisions to influence all our clients to TRADE RESPONSIBLY and INVEST WISELY.
To be able to do that, we urge you to MANAGE YOUR PORTFOLIO WELL.
We told you about the importance of not putting all your eggs in one basket. Yup, that’s true. And neither should you also put your eggs in so many baskets!
DO NOT SPREAD OUT YOUR ASSETS IN TOO MANY TRADES AT A SINGLE TIME! Though we invest in just a single digital coin, we also don’t invest in all of the coins out there in the exchanges.
Imagine, there are now more than 1,500 currencies in the crypto world. IS DIVERSIFICATION THE KEY TO EARNING MORE? If you follow the idea that diversification is the ultimate key to succeeding in trades, then you may see yourself unable to manage everything.
You need to find a balance when it comes to investing in digital coins. Consider this scenario:
Mark has just started his cryptocurrency trading venture. Believing that diversification is the key, he decided to spread out his 0.5 BTC in 25 different coins at once. Because of too many assets distributed across multiple markets, he failed to take part in at least 2 panic sales and purchases that happened during a specified period. Worse, he felt that everything’s out of hand because of confusing fluctuations in market price.
Initially, participate only in a few chosen markets with strong bases. This makes your portfolio a lot more manageable.
Portfolio management both in the cryptocurrency and traditional trading world has three key elements: Asset Allocation, Diversification, and Rebalancing.
ASSET ALLOCATION basically optimizes your risk and return profile as an investor. It is based on your understanding that not all assets are the same. Some could be extremely volatile while others could be quite stable.
DIVERSIFICATION is basically what we have discussed above – spreading your risks and potential rewards into different baskets of assets.
REBALANCING allows the investor to expand his opportunities for gaining more assets by looking at other opportunities.
Do you know that EARNING FROM TRADES is also like GETTING FREE COINS? Buying coins at low prices and selling at high rates essentially gives you free coins.
We recommend that you sell only 1/3 of your profits. Such portion of your assets can be used for trading in other markets or kept in your wallet. By doing this every time that you make a profit, you also get to keep your free coins. Furthermore, you increase your chances of earning more as the price goes higher.
The MOST IMPORTANT point in PORTFOLIO MANAGEMENT is KEEPING TRACK OF THE COINS THAT YOU HAVE.
That’s why it is important that you enter into limited number of trades at a particular timeframe because of your limited capacity to check what’s happening in your assets. You have to make sure that your trades are giving you profits!
Disclaimer: This article describes how we use the Crypto Base Scanner. This may not be considered trading advice.