Steemit Crypto Academy Week 7 Task: Money Management & Portfolio Management | lecture by @stream4u

Hello, Steemians. It's a honour to be here again at this time to learn at the Steemit crypto academy. I attended the lecture by the crypto professor @stream4u as the professor based his teachings on Money management and Portfolio management. I will be solving the tasks associated to the lecture in this article.

From other lectures taken by the professor, I have learnt how important it is to carry out different analysis before buying any asset and in this case too, to effectively practice money management, it is important to involve some technical and fundamental analysis. Money management is the process of sectioning your total capital into parts before making a decision to buy any asset.

It doesn't matter what kind of capital you are dealing with, big or small. It is important to section the capital into 2,3 or 4 parts as advised by the professor and as further researches reveal. The purpose of sectioning one's capital is to give proper room for going for multiple assets to be added to one's portfolio.

Why going for multiple assets to be added to the portfolio? Price movement of assets sometimes doesn't always stay accurate as it is was indicated at the initial point of entry. In the past lectures we had, it's seen that technical indicators sometimes are not accurate and an example is when the SuperTrend indicator gives a false buy/sell signal.

After you've successfully carried out your technical analysis, fundamental analysis, read news, seen signals on forums and so on such that you are ready to buy an asset, take for instance, your capital had been sectioned into 3, use one part to buy the asset and keep the remaining capital. Research for other cryptos too, when you are certain enter with another portion of your capital and so on. And that completes the money management as you effectively put your capital to work.

Money management keeps you on a safer side if one of the assets doesn't move as projected (maybe experiencing a downtrend when you have profits projected at uptrend) due to unforeseen circumstances, others might go well and in the process cover up for the deficiency experienced from the other one. That's the power of money management, take for instance, if you put all your capital in just one asset and things doesn't go as projected then that can lead to a big loss but with proper money management, you'd be safe.

I've been predominantly a 24hrs trader with a little touch of keeping assets for a long term as I've not put in proper measure in place to accurately manage my capital. After this eyes opening lecture, I'm already convinced to subsequently section my total capital into 4, using one part for my daily trading and use the remaining 3 parts for mid-term and long-term trades. With that, I will effectively manage my money.

Portfolio management is basically the collection of assets I've bought after making some analysis on some particular assets. Portfolio management holds my bought assets in one place, let's say in crypto wallets, exchange wallets and some times on open order on an exchange for assets you have set a sell order for and the portfolio can consist around 3-4 assets in accordance with money management after the capital must have been sectioned into 3-4 parts. I will be showing my investment on an exchange below.

In my portfolio on Binance exchange shown above, I have BTCST (Bitcoin Standard Hashrate Token), BNB (Binance Coin), REEF (Reef Finance) and ZRX. Let me talk briefly about how I setup the portfolio.

BTCST: I acquired this asset after it experienced a little pump, I placed a buy order to take make some profits from the uptrend. Of course, it was a wrong choice and I will talk more about it later in this context.

BNB: Most of the residues from my day trades are often converted to BNB by me to serve the purpose of transaction fees for subsequent trades and I bought some to it as I have done some fundamental analysis and see that BNB still have potentials to rise in the soonest time.

REEF: Reef finance is an asset I got after reading its whitepaper, Reef finance is a All-In-One DeFi as it has all features of DeFi on one platform. I believe this asset has a promising future ahead and I purchased it for a long term purpose.

ZRX: This is an asset I purchased when it experienced a slight pump.

It is evident that I've not been practicing proper money management and that rendered my portfolio distorted as some of those assets bought are not chosen effectively. My plan for the future is to effectively practice money management by dividing my total capital into 4, make deep analysis on cryptos before buying assets in parts in accordance with my sectioned capitals.

My last failed investment is still in process and it's the BTCST asset I have on my portfolio shown earlier. I entered the trade with FOMO (Fear of Missing Out) without conducting proper analysis and it really cost me. I want to have a share of the cake as fast as can and things feel apart. I will show my entry price and the current price in the screenshots below.

The screenshot above shows that I entered the trade at the market price $67.6 and made the entry with all my remaining capital. The screenshot below shows the current price of the coin which is just around $40.

The illustration above shows I am already in some loss and poor money management have really cost me but it actually equipped me with experience as such the professor's lecture will be of great help to properly carry out money management subsequently.

In conclusion, proper money management will put you on a safer side as it helps to build a healthy portfolio. And good portfolio management will yield good profits while success from some assets can cover up for the lose pores created by other failed assets. I appreciate professor @stream4u lecture, it's a really great one and I look forward to learn more from the professor and other Steemit professors. Thank you all.