What you need to know for a reasonable cryptoinvestment?

Against the background of the volatility of the cryptocurrency market, many have lost all money invested in digital money. Therefore, even if you have capital that can be invested in any cryptocurrency, you need to follow a few basic rules.

1. Diversification is not always good

It is believed that a cryptocurrency portfolio should be diversified, and it is true to invest all the money in one coin is dangerous, and besides, it limits the potential profit. But mindlessly throwing money on different assets is also not worth it - everything must be done correctly.

Why seek portfolio diversification? Just to make more money. You should not invest in a coin just because you do not want to continue to increase investments in your current asset. Now, if you see potential in a coin and want to be in the forefront, then it's another matter.

2. Profit - only after the sale

It's great to see that your assets grow in value, but that doesn't mean anything. Cryptocurrencies are very volatile, tomorrow they can become cheaper back, so until you take profit, you do not have it.

If things are going well, you should not rest on your laurels, and until you withdraw funds to a more stable asset, for example, in fiat currency, you did not make a profit.

3. Do not sell until the time comes

Many when trading cryptocurrencies are guided mainly by emotions, and not by reason and market data, and as a result receive less profit or lose more than they could.

If you have a good deal, resist the desire to sell and buy, do not sell your coins just in pursuit of short-term profits. You need to sell under the right circumstances, which are determined by many factors - from your target indicators to news that may affect the value of the coin. Stick to the facts and everything will be fine.

4. Choose the most effective way to buy and store coins - each has its own

The cryptocurrency market is still young, and there is no generally accepted practice, so, focusing on someone else's experience, you can make the wrong choice. In any case, you yourself will have to decide how you want to buy and store coins.

When buying it all depends on what kind of cryptocurrency you need. Typically, the exchange does not support all types of coins, so you have to choose the right one. Not all exchanges do business honestly, and in some cases you may not be able to return coins for some time, because the owner decided to earn some money.

Whichever currency you buy, you will need a wallet - this is not only a security issue, a wallet will allow you to personally store new types of coins that are not yet available on most exchangers. If you don't plan on frequent transactions, then a hardware wallet is for you. First, it is safer than keeping money on a hacked exchange, and second, it will keep you from impulsive actions.

5. Think profit

Every crypto trader once faces a dilemma: which is better, to be right or to make a profit? The difference is not always great, but it is: it is important not only to determine which coin will grow in value, but also to receive income.

It is necessary to think not only about which cryptocurrency will grow, but also about which one will grow the most - the difference, again, is not big, but it can be the difference between a small income and a big success.

6. Focus on fiat currency

Evaluating cryptocurrencies only relative to each other is a recipe for disaster. Take Bitcoin and Stellar, for example. If Bitcoin rises in value and Stellar does not, you can naturally buy more Stellar, but this does not mean that Stellar has lost value - it is just that the exchange rate has changed between the two cryptocurrencies.

When determining the value of a coin, compare it with fiat currencies, for example, with a dollar - so you will have a clear idea of ​​how prices change.

7. Buy without delay

Many people hesitate to buy coins just due to market manipulation. Everyone knows that in a situation where there are no rules, large companies can perform the trick of artificially raising and lowering prices indefinitely until they get the desired profit, and an ordinary person constantly expects that the coin will become even cheaper against this background.

This fear is natural, but it must be learned to ignore, because it is almost impossible to predict market fluctuations caused by manipulation, and this is not very important. If you see that the currency is promising, and that it is cheaper than usual, this is enough - it is better to buy and lose part of the profit than not to buy and lose all the profit from the correction.

8. Manage your emotions

The main problem of the trader is not the “Wild West” of the unregulated cryptocurrency market and not the intrigues of scammers, but his own emotions. Cryptocurrency trading is a constant roller coaster ride. Every time you look at the value of your portfolio, something changes, and these changes make you nervous. If the currency becomes cheaper, you think it is time to exit, if it grows, the question arises as to how long to hold the position.

And this is natural, but if you want to succeed and make a profit, you need to learn how to ignore emotions and focus on numbers. Do not let fear knock yourself.

9. Not sure - do not play

One of the best tips you can give to a private cryptocurrency investor: use only money you can afford to lose. No matter how promising the technology is and how professional the project team is, there is always a chance that nothing will work out and you will lose all investments, and when this happens it should not be a disaster.

And the next step: sure action. If you are not sure about the coin, do not buy it. Fear of missing the opportunity forces many to take risks, although in reality there is no reason to rush - sooner or later new coins will appear, and the existing ones will fall in price more than once.

This also applies to sales. If you think you can earn some more, hold on. If there is no reason to think that, while you turn away, the currency will plummet in price, keep it.

10. Do not pay attention to the potential number of coins in circulation, look at the real

The law of supply and demand also works with cryptocurrencies, which is why it is possible to manipulate the market. The more people buy a coin, the more expensive it is, so you cannot say about any cheap coin that you should buy it.

You should evaluate its value relative to the actually circulating number of coins, and the closer the number of coins in circulation to the maximum value, the greater the likelihood that the currency will grow further in price, because with increasing demand, the supply will not increase.