Cryto Hustle-Nomics Presents: 4 Ways To Reduce Risk When Trading On A Bitcoin Exchange

The general rule of thumb for bitcoin security is to manage your own private keys and not keep your coins stored on an exchange. Active traders end up taking that risk because we need the liquidity of centralized exchanges. If you are trading on an exchange there are ways that can help reduce your risk exposure.

Here’s a list of 4 ways to reduce third party risk:

#1 KEEP RESERVES

Only trade with a percentage of your overall holdings. If an exchange goes bust and you lose your coins then you won’t be wiped out of the game. Personally, I only trade with 20-30% of my holdings and use leverage to increase my trades.

#2 DIVERSIFY

Spread your trading portfolio amongst several exchanges. If one platform fails then you’ll still have coins to trade with.

#3 INVESTIGATE

Make sure to research any exchange before using them. When traders experience problems they tend to bring it to public attention to warn others. Social media site like bitcointalk.com and reddit.com have up to date information.

#4 TRADE QUALITY

There are some market conditions that are ideal for trading. Reduce your activity to quality trades and pull your coins off the exchanges when you’re not actively trading.