Investments in Cryptocurrency. A Simple Strategy for Beginners

Beginning crypto investors quite often find themselves in rather unpleasant situations. And maybe they even know you. What is the classic purchase at random. If you are “lucky” to buy at the local maximum before the correction starts, then everything is rather sad. The price goes down, patience runs out before the corrective movement, you sell BNB to BTC on the local bottom… And then the price turns around cheekily and goes to your unreached goals. An acute attack of FOMO is almost guaranteed.

Of course, the lack of experience, as well as intuition and strategy, affects. Moreover, it is worth bringing the strategy to the first place visit The very good news for you is that even a mediocre strategy is more reliable than chaotic market jumps. But there is also a bad one: drawdowns and losses happen to everyone without exception.

Choosing a strategy

Experience does not come quickly and until you have it, it is safest to limit yourself to spot trading. That is, you use only your own funds, and do not even look in the direction of leverage or loans.

First you need to decide on the goals of investing and designate its horizon. The investment horizon refers to the time you plan to stay in the market: days, months, or even years. Actually, it is already becoming clear that for a week or two people come in solely for the purpose of short-term speculation. The farther the horizon, the more room for maneuver. For example, to keep most of the capital, and use a small amount for trading on the best crypto pairs.

Long term investment

Investments for the long term are almost guaranteed to bring profit. Since their essence is reduced to the storage of an asset, this is not the most nerve-wracking task. Regardless of which coins you are considering as candidates for a place in your crypto portfolio, study them and follow crypto news.  Think about what might happen to the project in a year, 3 or five years. And most importantly, answer yourself what you will do if the coin falls in price.

The game for a long time involves not only the expectation of growth, but also the accumulation of an asset on falls. It is also important to decide on exit points. For example, the desired price level of the coin or the capitalization of the project. To start selling an asset, it is not so much the price that is important, but the time spent in the market.

Average out

This technique is often used in investing. If you buy an asset on falls, the price of each purchase will be different, but the average price will be more important. Suppose you bought coin X for $200, and a month later the same amount but for $100. Accordingly, the average purchase price is $150 per coin. If you just hold the asset all this time, and it drops to $100 and then recovers to $200, you will simply break even. In the case of averaging, the breakeven point moves to the level of the average price. When the price reaches the initial value, you will already have a tangible profit.

On a fall, it is important to analyze the situation in order to imagine why the coin has fallen in price and what consequences this will have for you personally. Whether it’s a general market correction or short-term negative news, it’s not a bad buying opportunity. When it comes to some fundamental things that can greatly affect the future of the project, it may be better to fix the loss and abandon this asset. Its not a bad idea to learn more about reducing risk of an investment.

When to sell

Over time, you will accumulate a fairly large position. Identifying market exit points is just as important as identifying entry points. The simplest to implement and at the same time effective strategy is the so-called ladder. As the price rises, you sell off your supply of coins piecemeal.

Let’s say for every 50% growth you sell 20% of your portfolio. It is not necessary to completely reset the position, some part can be left for a longer term. Thus, you remain in the market, but fully reimburse the body of the deposit.

Where to buy coins

For reasons of financial security, it is better to buy coins on a reliable platform. If you do not plan to combine long-term investment with trading, you can use the services of an instant cryptocurrency exchange service, for example, LetsExchange. For trading, centralized exchanges from the TOP CoinMarketCap, such as Binance, Kraken or Bybit, are more suitable.

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