Investments in digital assets are considered highly risky due to their volatility. So what can be done to protect yourself? How not to make serious mistakes? Read in our new LATOKEN Review!
In the crypto market, sharp swings in quotations are often observed. For example, on November 16, the price of Bitcoin collapsed by more than 10%. A sharp decline was also observed on September 7 — the asset fell in price by more than 20% per day. Undoubtedly, every trader and crypto enthusiast wants to secure their crypto investments and make them more efficient. Is it possible? Let’s try to figure it out.
Ability to correctly assess risks
The cryptocurrency market is characterized by increased risk, and the likelihood of losing your funds is high. Experienced investors and large funds take this into account, so it is essential to correctly assess risks and allocate no more than about 10% of your portfolio for working with digital assets.
We might say that it is a very reasonable approach. 10% is enough to feel the profit that cryptocurrencies can bring. On the other hand, the next crypto winter will not hit the portfolio hard if only 10% of digital assets are in it. However, it’s just one opinion. Keep in mind that if you want to start trading, you have to learn, stay up to date, and make your own decisions.
If we talk about investing in terms of saving money, then it is necessary to closely monitor the cryptocurrency market and buy more conservative assets. However, once again, that’s only one of the existing opinions; everything is changing extremely fast when it comes to dealing with crypto.
For example, DeFi projects and meta cryptos are among the most profitable on the market now, but the higher the profitability, the higher the risks, isn’t it? So here it is worth asking yourself: are you ready to take the risk?
An effective algorithm for beginners
There’s an opinion that it might be quite tricky for someone who is not a professional trader to invest more than 5% of their capital in digital assets. For a novice trader, there is a particularly high probability of entering the market at maximum values, as well as being involved in various fraudulent schemes and becoming a victim of a crypto scam.
One of the most effective and proven schemes is allocating non-critical amounts that can be invested in cryptocurrency in equal shares every month. This tactic can take off and generate good returns in the long run. This tactic will also allow you not to spend too much time on investments. However, in the crypto market and the crypto space in general, everything is changing extremely rapidly. Therefore, you need to learn to make your own decisions and not be afraid to learn from your own mistakes.
- Ranked #2 worldwide in the startup tokens primary market with 220+ IEO’s since 2017.
- Has over 2 mln registered users, over 1 mln Android app installs.
- Is in the TOP 10 of CoinGecko rank by amount of token pairs and coins listed.
- VCTV, a live streaming panel with high-profile industry leaders, produced over 500 shows to advise traders and investors how to navigate the crypto world with discussions, news updates, and interviews.
- Board of Directors includes former CFOs from JP Morgan and Paypal.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.