How to invest in cryptocurrencies to minimise the risk

in crypto •  7 years ago 

I am not a financial adviser and this is merely my own opinion.

Advice I got when it comes to stock.

Say that you want to invest 20,000 in a specific stock. The stock seems to be going down in price. You are not sure if this is an all time low or if it will go further down.

  • Buy for 5000 today. Wait for some time and buy again. Keep on doing this until you are fully invested. The time frame can be days, weeks or months. This is long term investment strategy and it is a company/cryptocurrency that I believe in.

By this method you are taking less risk.

How that could have been used in the cryptocurrency space. XRP started to go down after the all time high. Instead of investing all your money at that point. You start with a small amount and then wait a few days/weeks/months. Even if you miss the deepest part of the dip your average price is OK.

Another advice I got when it comes to stocks is this.

  • Spread out your risk in different types of stocks.
    Translated to crypto this would mean that you have a portfolio of at least 5 different cryptocurrencies.

Risky to have €100 in BTC

Less risky to have €20 in BTC, €20 in ETH, €20 in XRP, €20 in ADA and €20 in NEO.

None of us can predict the future and spreading out the risk leaves us less vulnerable.

Another way to lower risk is to invest in cryptocurrencies that are popular in different parts of the world. The more you diversify the lower the risk. Find bock chain technology that solves different kinds of problems.

But what about if something happens to cryptocurrencies and block chain technology. Do not forget that there are stocks, funds and other investments you can do.

By having a diverse portfolio you are taking less chances.

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I like to just buy low and sell high. ;) lol Recently though with bitcoin I had to switch strategies and buy high so I can sell higher later. I'll probably sell some of my bitcoin stock at 20,000 and hopefully buy back at 19,000 or maybe even 18,000.

Thanks for your reply. Who does not like to buy low and sell high? :)

Thanks for the upvote. It seems like everyone on here only likes to hodl. lol

You are welcome :) Yes many people would probably consider themselves hodlers. I would like to learn more about trading in cryptocurrencies. Do you have any good places to recommend for learning?

I think mainly you have to look for patterns. I think there are some patterns with bitcoin for example like it will probably go down next year before the chinese new year and then go back up. It can be tricky to get the timing down perfectly but you can get extra returns if you sell near the top and buy back near the bottom. RIght now the pattern seems to be bitcoin is doing better than the alt currencies so that may be the best hold but that could end up switching soon.

Coins mentioned in post:

CoinPrice (USD)📉 24h📈 7d
ADACardano0.375$-2.02%8.72%
BTCBitcoin8666.670$-2.35%16.22%
ETHEthereum847.002$-2.64%12.25%
NEONEO111.404$-1.76%12.43%
XRPRipple1.029$-4.63%39.0%

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