9 rules of effective cryptocurrency investing

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Just yesterday, Bitcoin grew by 10%. Ripple has bought a MoneyGram shares and currently is introducing lower commissions. Telegram and Facebook are launching their cryptocurrencies — Gram and Libra. The Internet is shouting that we now live in the times of financial revolution and great opportunities to make money. Would not you agree that to seize these opportunities right now is a sensible thing to do? At the same time, many inexperienced investors are afraid of losing their capital. So, let’s try and find out all there is about the new ways to gain profit and become a successful investor.

Until recently, the cryptocurrencies seemed an abstruse and incomprehensible topic to me. Yet, as I studied the matter and realized the benefits of investing as a source of permanent passive income, its basic rules became more and more obvious. Until, finally, I learnt to use them to gain my financial goals.

Rule №1. Take care of your assets

The first and foremost, I had to exclude the risks that lead to the loss of a deposit. Since the cryptocurrency industry is young and fast-growing, it is important to choose where and how to store your crypto assets. One of the options I considered was a “cold” wallet. Not a bad choice in general, but I did not want my assets to be a dead weight because at that time they were among the most liquid ones on the market. Therefore, I decided to put them into circulation and a crypto exchange was the best option to do so from both convenience and security standpoints.

Rule №2. Collaborate with the leaders of your industry

If we compare all the available cryptocurrency exchanges, we can distinguish two of them — Bitfinex and Binance. How are they different from the rest? First of all, these are the largest exchanges in terms of the turnover of crypto assets, that is, there is always somebody buying or selling on them. This makes it possible to sell or to buy an asset at a bargain price. Secondly, these exchanges take the safety of your assets — as well as their own — very seriously. Hence, the highest level of security. And thirdly, these exchanges have the largest range of cryptocurrency pairs from Bitcoin, Ethereum and Ripple to the newest projects in the crypto industry. As you can see from the above, both Bitfinex and Binance have significant advantages.

Now let’s talk a little about their differences. A special feature of Binance is the presence of a large number of fundamentally strong coins and a strong development team that constantly introduces new ideas and actually moves the crypto industry forward. Bitfinex is an exchange that was originally created for large investors and traders with high demands as to the functionality of the platform. However, recently its policy has been revised and professional trading is now available to everyone. One of its main features is the ability to earn on both ‘bullish’ (the asset’s price goes up) and ‘bearish’ (the price goes down) markets. This makes it possible to gain profits on such volatile assets as cryptocurrencies whatever the circumstances.

Rule №3. Efficient asset management: DIY or find professionals

In any profession, there are always the best; the so-called leaders. I thought that it would be easy to make money trading crypto on my own — just buy some coin when it is cheap and then sell it when its price rises. I downloaded a couple of specialized books — there are a lot of them on the Internet — and tried to follow the tips given by the ‘gurus’.  But, for some reason, the market did not behave the way I would like. So, I signed up for courses and, after their completion, rushed into the battle once more, but I got the same results. I was very disappointed and I would, most certainly, give up on this idea if it was not for my friend who opened my eyes: “You are an expert in your field, right? So, do what you do best and entrust managing your investments to professionals”. Thus, the idea to transfer the management of personal crypto assets to professional funds or traders was born. Of course, it soon turned out to be not an easy thing to do…

Rule №4. Mine should remain mine

As the first rule says “No risks”, I was looking solely for the options that would not imply actually transferring  my assets to anyone. The trades would have to be carried out exclusively on my account. Only this way I could be sure that my hard-earned money was safe. Having excluded all the options of transferring my assets to the accounts of hedge funds and individual traders, I faced a new problem. I realized that even if I found a trader who could trade using my API keys, that would not guarantee the profitability of such an enterprise. They (the trader) would not be afraid to lose my assets because they had no responsibility for them. If they lost my money, there would be no consequences, aside from my… disappointment, of course. At the same time, every successful trade would bring them profit. Once more, I was swept by the doubts and thoughts that I would have to just stick to hodling my Bitcoins. But after a while I came across a very powerful tool for copying trades CoinSharks

Rule №5.  «1+1=3»

The CoinSharks platform solved several fundamental problems I had faced before at once. Firstly, copying trades on the platform means that my crypto assets always remain on my account. Secondly, the trader, whom I copy, trades on two accounts his and mine at the same time. This makes them 100% interested in the outcome: we earn and lose money together. Thus, the higher is their performance, the larger is my deposit. And thirdly, I do not need to share my profits with the trader — CoinSharks pays them for copying trades, and I, as an investor, take my profit in full.

Rule №6. Choose the right trader

There is a saying “Big money loves a safe haven”. Here is a simple but effective guide on how to choose a trader who will manage your crypto assets. The very first requirement for a trader is stability. It is better to choose a trader who shows not the highest profits but rather stable monthly gains. In the long term, such a trader will provide a greater return. The second thing to look for is a trader’s risk management strategy. If a trader loses more than 5% in a single trade, it means that they trade at high risks. And only after you have checked the trader’s stability and risk management strategy, you should take a look at their rate of return. Here it’s simple: the higher the return, the better. Here is an example of one of the managers worth of your time: Etoro.

Principle №7. Diversify

No matter how perfect trader you chose is, you should not entrust them with all your funds. Find from 3 to 5 traders and distribute your capital between them at your discretion. According to their performance, change the ratio of allocated funds and overall approach to the management of your capital. Be sure to remember that every successful trader has their own trading system in accordance with which they manage their portfolio. And this strategy may show its best only under very specific circumstances on the market, for example, when there is an uptrend. This is one more reason for not giving the management of all your funds over to one trader only.

Rule №8. Do not twitch — be an investor

Just as the dawn comes after each night, ups and downs may come and go chasing each other. There will be times when you see that some of your traders lose a little in the middle of the month, but try not to jump to any conclusions — there are no traders who close all their trades with a profit. Believe me, any trader understands that they are losing money, so they will mobilize to try and close the month with good results. Be an investor — give your profits a chance to grow.

Rule №9. Constant growth

This rule has almost an unlimited potential. If you have chosen the path of an investor and have decided to get an additional passive income, you need to understand that everything is changing, and new, more profitable projects will replace the old ones. Look for new approaches to solving old problems! The CoinSharks project at its current stage helps to bring together traders and investors so that they both could benefit from the successful cooperation.
These 9 rules have helped me start investing in successful traders and making money with minimal knowledge about the crypto industry. I do not know where Bitcoin goes tomorrow, but I know that “my traders” will catch this movement, and I’ll catch it with the CoinSharks’ trade copying service. Be successful today!

© 2019 CoinSharks