July 28, 2020

How to Manage a Traditional and Crypto Portfolio

Trading is not the only way to earn income with cryptocurrencies since having tokens in itself generates percentages of profit thanks to the fluctuation of its price in the market. However, the price of these tokens can rise and fall, so we need to have an understanding of the market and what assets are moving (and where) in order to get good results.

Let’s remember that the first step to maintaining profitability as an investor is not to lose money, so this time we will review some recommendations for managing your crypto portfolio and having the best conditions to obtain benefits. You can always check AltSignals to learn how to improve your trading strategies.

Disclaimer: all the information provided in this post shouldn’t be considered investment advice. We are not advisors. This is just for educational purposes only. Never invest more than what you are able to lose and always ask a professional financial advisor. 

Make a plan

It is very easy in crypto to lose money and gamble your investments when a certain opportunity comes up, so a plan becomes essential. A plan demands you to keep track of things and makes you regularly work your strategy. 

A plan establishes the patterns that you will determine when investing in an asset. For example; The points of purchase and sale in the market, the price zones that you should avoid, keep abreast of news that may affect the price of a particular cryptocurrency and basically any rule that you want/should establish to ensure your success.

Investing without an investment plan is no different than placing bets at live crypto market prices. Although the price moves with supply and demand, there are factors that make one cryptocurrency have more volume than another and start trends. In short, this means that we have to create a filter of opportunities to take advantage of those that arise and not invest in those that we created for “the rush” of the moment.

Know your risk appetite

It is highly recommended to modify your crypto portfolio with a risk/reward ratio to always earn at least double what you can afford to lose. In this case, assuming that 3/5 of your investments are in a momentary loss, the profit of the other two would compensate for that loss and would also have a profit margin. Respecting this management, your balance is more likely to stay in profit constantly.

You can also divide your portfolio into different investments, among which you will have highly capitalized cryptocurrencies as your safe zone (because they will be in constant movement and their prices are always ready to rise) and alternative coins as the smallest part of your funds. For example, you could have 60% highly capitalized cryptocurrencies, 30% altcoins, and 10% low-capitalized coins.

Do your research

It is important that you do not jump into your investments without prior research into the cryptocurrency you are going to buy, as blindly jumping into tokens you do not know will likely end in losses. Unless you’re gambling, you don’t want to risk your money without knowing how the market for an asset is moving or why it is moving. Carrying out exhaustive research on the behaviour of a digital asset is essential to know at what point it is convenient to buy and at what point it is necessary to sell.

Every project/cryptocurrency has good and bad aspects, so you’ll need to get to know them in order to know what to do in case things get out of control. In this case, if any price goes out of your strategy you will know how to deal with it and you will cut loss margins when it is not safe to take them. In the optimistic case, you will be able to keep your investments a little longer and absorb more profits than expected.

Follow these steps and you will get that nice reward at the end of all the hard work. Investing, as it looks, requires dedication and education, so everyone that is willing to take the risk has to get sharp on everything there is to know about the assets they are about to invest in.

AltSignals Team

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The AltSignals writing team consists of experts dedicated to the world of finance and technology, with a particular focus on cryptocurrencies and forex. Our writers bring a broad range of knowledge and experience, cultivated through years of arduous and direct involvement in financial markets, as well as intense technological collaboration.

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