Everybody dream about a profitable investment or especially crypto portfolio. I think even now the crypto market starts to be "old" lot of people joins when they hear about 1000% or even more profits. In real life to have this kind of result you need incredible luck and also patience... and lot of money. I worked on the investment (especially FOREX) market for more then 10 years and I saw a lot of money burning techniques. So why we are here for today? - To see what we need to avoid in the a future and what to do. Let's make a 5 point list for both sides. I hope it will help you, and before I start it please let me highlight that it is not an advice, just my opinion based on what I learned during the past 10 years.
What do you need to avoid not to lose money if you build up a crypto portfolio:
- Safety first: Possibly for most of you it is a basic thing but I need to highlight. I still see that people who first read or hear about crypto market wants to be rich immediately. To achieve this and not understanding this era people often can be just scammed. For example there are a lot of non-stop live youtube channel what streams a speech from Elon Musk or Vitalik Buterin (founder of ETH), and under the video there are just scam links. I don't know why YouTube/Google allow this, but it can cause immediate money loss. Safe and easy start is a must especially without experience. Online crypto brokerages can be good point for this, as Binance for example where crypto buying can be strated in minutes.
- What kind of money: Still a basic step to think about your personal possibilities for investing. When you invest to a really hectic and volatile market as the crpytocurrency area you need to consider how big part you will invest here. Think about the worst scenario every time and hope the best, but never invest money what you can not afford to lose. It is a boring sentence but as bored as much it is ignored. Be smart and risk only a part of your capital.
- Jumping in and out: Here we are talking about the crypto market but this is true for all of your investments. When you start an investment then it has to be a reason. If you see that your capital is decreasing it is not an option to grab the money immediately with realizing the loss and run away. One of a really bad mistake is to jump from a crypto to another every day or even in every hour and burn your money with transaction fees.
- Everything for double zero: ...and the other mistake is to believe in something and trading with emotions. Lot of people start to believe in a project (When I write this example I need to bring up TERRA Luna what lost 99,99% of the value), and spend all of their money for one single project. It can cause a very fast portfolio collapse.
- Giving up: Beside the main mistakes also one what I need to highlight is to givin' up. Don't do it. Before you invested you made it based on a research and it had to be a reason. Even if you lose part of your invested money is not a reason to give up. Check your investment portfolio again, learn from the mistakes and continue until you succeed.
I could add more and more points, but there are a lot of clever people around the world who wrote books about these topics. So possibly the first advice what will come is: Do not spare time on learning before you start to invest, but let me to put here the 5 points what possibly can help you to avoid losses.
- Safety first :) : Safety, and the risk to lose your money follow you during the whole investment life and possibly with time you will invest more and more money so it will become even more important. Choose a provider and brokerage which invests a lot to provide on of the best platform for you, and who protects your privacy and also your money. Learn about safety of Binance here.
- Diversification: Possibly a strange example but: Most of the tables has 4 legs. Like this the furniture is stable and ready to use. Why would you just create an investment portfolio for one or two legs? Diversification is a must to generate profit. Especially on the crypto market you have an option to lose or win big on a currency. If you share your capital you have the possibility to grow and not lose everything in a single minute.
- Learn: Learn is mandatory to be a successful investor. You need to know all of the possible information to avoid losses. Learning investment or trading strategies, knowing the instruments or cryptocurrencies what you would like to choose for your portfolio is a must. Never underestimate the time what you spend on improving yourself and deepen your knowledge. This is one of the best crypto knowledge base.
- Stand by your decision: We step one forward OK? So you have chosen the cryptocurrencies and coins where you see a profitable future, you built up your portfolio. Imagine that you start to lose. What will you do? Nothing! I mean when you see a little minus or money loss is not a tragedy. Especially on the crypto market you need to count with high volatility. There was a reason why you decided beside a token or coin. Keep it in mind and stand by your decision. Let's give time for a project to generate income.
- Realize your profit: Simple thing but most of the investors forgot about it, especially if you see a very good profit generating time... so realize your profit. When you do your investment plan decide when will you do your exit and what will happen with the money. On thy crpyto area you have soo many option to save your money even when it is not actively invested, but you need to decide. If you plan to earn 20% on a coin then withdraw your income when you achieve this. Do not gamble because growth can not happen every single day. If you don't realize your profit you will lose it.
Hmm even from this profit realization step we could talk soo much, but I finish for today. I hope it helped you and if you have other suggestions please let me know in a comment. :) And do not forget to check now a few possibilities to earn crypto passively: Click here :)
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