[Day 6] Top 7 Costliest Mistakes Trading Cryptocurrency #6. Risk Management
Most coins are volatile in the cryptocurrency ecosystem but they generally move together day to day. The most widely used diversification strategy for hedging against too much risk is to build the foundation of your portfolio on the most vetted, reputable coins. Today I’ll discuss risk management and how creating a strategy will help you become a better trader.
Table of Contents:
- FUD and FOMO
- Wrong Tools
- Wrong Entry Point
- Technical Analysis Done Wrong
- Not Understanding the Order Book Correctly
- Risk Management
- Is Day Trading Really For You?
To be a successful day trader, you need to deploy various risk management strategies in order to mitigate risk. These could be things like setting stop losses, settings limits, and allocating funds. Here is personally what I do with my cryptocurrency trading. Please note: this is a breakdown of just my crypto investments which make up about 50% of my total investments.
I allocate 60% for trading and 40% for long-term BTC holding. That 40% BTC is stored offline on a hard wallet. It’s hard to tell which altcoins will be relevant in the next 3-5 years. I suspect most current altcoins will be overtaken by newer and more exciting tech so that’s why I avoid holding an altcoin for long term (over 3 years I consider long-term). Next, with that 60% left for trading I split that in half. 30% I trade BTC pairs, and the other 30% I trade USDT pairs.
To read the full article visit: Top 7 Costliest Mistakes Trading Cryptocurrency