Friday 11 August 2017

Cryptocurrency Trading-Investment Advisory for Starters

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Cryptocurrency Trading-Investment Advisory for Starters

Cryptocurrency (Bitcoin , Ethereum etc.) Trading is an income generating skill, if mastered properly, by understanding the timing , knowing when to enter and exit a trade.
Becoming a Billionaire will not be far fetched.
To Win in cryptocurrency trading you require the following

  • Knowledge,
  • Personal Strategy,
  • Timing and Speed.
  • No Emotions Allowed
First find where to buy or sell your fiat currency need for cryptocurrency trading.
The trading is done on exchange platforms or sparse communities of consumers as independent brokers, selling or buying Bitcoin at a markup.
Cryptocurrency trading in Nigeria requires the following and will serve as a good knowledge-base start.

Buying BTC in Nigeria


Trading Platforms (Multiple Cryptocoins and Digital Assets)

Market Historical Data, Analytics and Visualizations

Investment Portfolio Monitoring

In other to easily monitor the progress of your investment in cryptocurrencies and get a quick view of investment portfolio performance, without having to develop yours using MS Excel Spreadsheets. You can setup accounts in certain cryptocurrency portfolio management platforms as listed below.

News

Knowledge Sharing

Related Readup


Summaries on Portfolio Management


Investment Types and Portfolio Distribution

Long term ( ⥸ 3+ months) - 70% of Portfolio

  • Most of the experts fall into this category as they understand that dips and crashes are normal and in addition are opportunities to buy more Cryptocurrency at a cheap price.
  • The overall goal is to buy as much Cryptocurrency as possible and then hold onto it until it matures and appreciates in value.
  • Investment period: Long-term (3+ months).

Short term ( ⥶ 3 months) - 25% of Portfolio

  • Investing in the volatility
  • Trading on hypes and news ( if you know that good news is going to come out for a coin it would make sense to buy that coin then sell it in the short term to make a profit.)
  • Playing the markets daily getting about 1-3% interest per hour buying low and selling high
  • Simply put these investors flip currency for a profit. Even though the markets are down there are still some plays to be made, for instance buying coins now and selling them in a month when they increase.

Chance - 5% of Portfolio

  • Identify an undervalued coin and invest a few hundred bucks or a thousand in it. They hope that one day the unknown/undervalued coin will increase in value substantially.

Approach to Building your Portfolio:

The ‘Core’ segment

  • Investment period: Long-term (3+ months).
  • Total value rule: Must be at least 70% of the total value of the portfolio.
  • Number of cryptos rule: Maximum of 10 different cryptos at any given point in time.
  • Rebalancing rule: Redefine ideal relative positions of holdings every four weeks and redistribute accordingly.
  • Know as much as you can about these cryptos (team, community, primary focus, tech, roadmap, most important competitors, funding, business model).
  • Make sure to keep yourself educated about recent and near future developments of these cryptos.
  • When redistributing, ignore small deviations from ideal distribution to avoid unnecessary transaction costs.

The ‘Play Money’ segment

Having this segment in my portfolio allows me to enjoy the excitement of finding cryptos that might have the potential to outperform the Core segment at least in the short term.
It allows for speculation but simultaneously prevents unlimited Fear-Of-Missing-Out (FOMO) buying behavior.
  • Investment period: Short-term (a few days up to 3 months).
  • Total value rule: Can be maximum 30% of the total value of the portfolio.
  • Number of cryptos rule: Maximum of 10 different cryptos at any given time.
  • When adding a new crypto to this segment, the investment should at least be €200. This is to make sure that the potential profit is worthwhile the time invested in research.
  • When making an investment, set a date at which you will evaluate whether to keep the crypto in your portfolio or sell. When the decision is to hold, set a new date to evaluate again.
  • When stepping out of a crypto, sell the full amount of coins you own. Use most of the money to strengthen the Core segment and use the rest for future Play Money investments.

Related Readup

1 comment :

  1. aarzoo1 September 2021 at 21:16

    Hey,
    Thanks for sharing this blog its very helpful to implement in our work



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