Decrypting the Crypto Code: Navigating Risks and Mastering Tips for a Secure Investment Journey

Gepubliceerd op 21 januari 2024 om 09:43

Risk is inherent in crypto. In this blog, I will give you some basic tips if you want to invest in crypto. This list is not exhaustive, but it is a good starting point in investing in crypto. Also, everyone has their own strategy and no strategy is better than the other. One strategy suits a person better than another.

Mind your crypto risk

Have you enjoyed the price pumps and excitement you have experienced from crypto? It is highly likely that people such as you and me are in the market for the quick bucks that we can earn by putting our cash money into an intangible asset. That is made possible by the unregulated and relatively young crypto-market.

But when the time comes to press the BUY button on the exchange. You should actually stop for a second and mind the risks of investing in crypto. I have some helpful questions you should ask yourself if you are at that the point of buying cryto:

  • What is the reason that you want to invest in this specific crypto/project?

    - Is it because it'll go to the moon?

    - Or has it a nice written promise on a white paper?

  • What do you do when your position is at a profit?

      - Do I or will I take profit at some time 

  • What do you do when your position is at a loss?

    - Should I cut the losses at some point.

    - Or does it get better after some time.

These are a few example questions you should answer when you “invest” in a high risk asset. How should you navigate the crypto world? 

Every investment should have a few rules:

  1. Determine at what price you want to enter the cryptocurrency.

      - Is the price of the coin relative high or low. When it is relative high you should be careful because a price correction will follow sooner or later.

  1. What is the trend* of your cryptocurrency?

      - Price is going up, down or sideways.

  1. What is the risk you want to take on your investment portfolio?

      - Is it worth it to risk your whole portfolio in one particular coin.

  1. When and at what point do you take profit?

    - You should define at what price you should take some profit. To take some risk off the table.

If you follow this roadmap, you will be better off than most cryptocurrency investors. When you do not follow the rules and let emotions get the better of you, you’ll most likely lose your hard earned capital. And that is what nobody wants.

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