There is no such rule, to be honest — just as there are no miracles in our world. There exist, however, certain principles which — if followed properly — are going to help you minimise risks and generate revenue. If you consider yourself to be an experienced trader, you might just skip the first four Principles and and jump to last one, Principle #5 — which will be of great interest to you.
KEEP YOUR OPTIONS OPEN
Try not to get focused on conventional, well-known crypto coins. The less popular, and the more recently introduced tokens may well yield a far more substantial ROI; you should, however, always mind the risks pertaining thereby. Let us bring up some examples to provide a background here.
By late 2017, ROI (return on investment) for REDDCOIN was over 1,200% within a 10-day period: one could buy reddcoin at $0.0016 on the 15th of December, 2017 — and then sell it at $0.02 per coin ten days later. Well, that’s a good bargain, is it not? No such luck and profit with the well-established cryptocurrencies such as Bitcoin, Ripple, or EOS.
Here is another case in point: Everus. On the 26th of November, 2017, you could buy it at $4.34 and then sell it it a couple of days, yielding a profit in the vicinity of 30%. On the 1st of December, 2017, however — right after the trading platform was launches — a substantial market correction took place; afterwards, its price plummeted, and by the 28th of December, 2017, Everus was trading at $0.42 or so — that is, the asset lost about 90 per cent of its price.
Thus, in order to make a decision and select the best cryptocurrency option for you, it is highly advised to undertake an in-depth analysis into each separate deal, monitoring the market and the environment of competitors. It always pays to be informed.
LOCK IN YOUR PROFITS
Better take a calculated risk and make a calculated profit.
It is always better to get out of a position ‘too soon’ than it is to do it ‘too late’ and find yourself in the red. If you have already waited long enough to make a profit on your coin and now you start noticing some disturbance in the market, you better lock in your profits by finalising the deal.
Besides, the ‘less is more’ principle does not always work in the crypto market. 10 minute-long deals yielding $10 each are better than a single deal per week yielding the same profit but associated with higher risks. Suppose the first short position yields a dollar, the next one yields another dollar — but then comes a week-long decline. In this case you are going to make a $2 profit — a modest one, but a profit nonetheless. If, however, you had opted for a single long position in its stead, you would have found yourself in the red — and that would certainly not be good.
VARIETY IS THE SPICE OF TRADING
Never confine yourself to one or two cryptocurrencies only. The more diversified your portfolio is, the higher chances you have to make a profit. Shame if the price of one of your crypto coins plummets, but not if you can compensate with another, more profitable cryptocurrency. Win some, lose some. Diversify, Sir!
STAY IN THE LOOP
Observe the market at all times and monitor the current trends. Sheer luck alone is not going to get you anywhere in the long term in this business. Follow the business news and always try to figure out the possible consequences of each event and how is it going to impact the exchange rates. Use trade indicators as your road indicators — and so on and so forth.
You can find the latest news on almost any cryptocurrency, references to their official web portals as well as social media pages, and many other useful stuff at coinmarketcap.com
Knowledge and experience are what is going to make you rich. A rookie entering the stock market always risks suffering considerable financial losses. The same risks are, however, faced by just about any experienced trader, too.
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