Cryptocurrencies have taken the world by storm and given rise to a whole new financial ecosystem. While many see Cryptocurrencies as the next big thing, there are also risks associated with investing in them. Especially, if you plan on trading cryptos rather than simply holding them as an investment.
Trading crypto coins is a highly risky activity because of all the volatility it can bring. If you plan on doing so, keep in mind that investing money is always going to be risky. Even more so when your investments aren’t secured by anything other than trust and faith that they will go up in value over time. With this in mind, here are 5 tips to protect your Bitcoin trading portfolio from loss:
Use a Bitcoin Wallet that Supports Trading
While you can trade Cryptocurrencies directly from your Bitcoin wallet, it’s best to use an exchange. This is because it’s best to buy and sell cryptos from and to a trading platform. When using your Bitcoin wallet to trade, you are at the mercy of the wallet provider. If the wallet provider decides to close down for some reason, you will lose all your investments.
It’s best to use a Bitcoin wallet that supports trading so you can trade from the wallet itself. This way, you don’t have to trust third-party services to hold your Bitcoin. The best Bitcoin wallet to use for trading is a web-based wallet like 1K Daily Profit. You can link your bank account to the wallet and trade from there.
Be Realistic with Your Expectations
Many people get lured into the world of cryptocurrency trading. Due to the high returns some coins have been generating, it does look like a lucrative business. Nonetheless, you need to be realistic with your expectations. While some cryptos have been performing extremely well, the majority of them are still very volatile. This means that there is a very high chance of losing a lot of money should you decide to trade.
It’s also important to note that trading cryptos don’t come with the same guarantees that trading stocks do. In other words, you can’t buy the company and expect them to pay you dividends every year. All you can do is make a profit by trading them.
Create a Trading Strategy
If you plan on trading Cryptocurrencies, it’s important to create a trading strategy. This strategy should include a trading plan, a trading strategy, and a trading timeframe. Your trading strategy should include a trading plan that includes the following details:
– Trading items you plan on trading.
– Expected gains from trading.
– The trading platform you plan on using.
– Expected trading fees.
– Expected profit from trading.
Track your Traded Coins
Another way to protect your Bitcoin trading portfolio from loss is by keeping track of your trades. If you keep track of your trades, you will know when to exit a trade and protect your portfolio from loss. A trading strategy that does not include trading stops and exits is bound to fail. This is why you need to keep track of your trades. You can do this by using a trading tracking platform like TradingView.
This trading tracking platform allows you to keep track of trades, and see the profit and loss from each trade. Once you create an account on TradingView, you can create a chart and start tracking your trades. This way, you can know when to exit a trade and keep your portfolio safe from loss.
Don’t Store All of Your coins at Once
While most people store their Bitcoin in a Bitcoin wallet, it’s best to not keep all your Bitcoin in one place. If a major hack happens and someone gains access to your Bitcoin wallet, they could steal all your Bitcoin.
It’s best to keep a small portion of your Bitcoin in a wallet and the rest in a separate non-Bitcoin wallet. This way, if someone hacks your Bitcoin wallet, they won’t have access to the non-Bitcoin wallet. This will protect your Bitcoin trading portfolio from loss and make sure your Bitcoins aren’t hacked at the same time.
Cryptocurrencies are here to stay. However, you need to be aware of the risks and prepare yourself for the worst-case scenario. The best way to protect your Bitcoin trading portfolio from loss is to create a trading strategy that aims at protecting your investment from a large loss. If you are new to Bitcoin trading, you should only invest a small amount of money at a time so that you don’t lose all of your money if the strategy doesn’t work out as expected.
You can also use a trading strategy that involves trading a small portion of your Bitcoin portfolio. If you want to protect your Bitcoin trading portfolio from loss, you should only keep a small portion of your coins in a wallet. You can also use a trading strategy that involves trading a small portion of your portfolio from time to time.