Finding the opportunity to buy digital money at a bargain price is not particularly difficult, but to get the maximum return, you need to know and follow the basic principles and be familiar with various trading software such as Bitcoin Trader. With the Kodimax cryptocurrency broker review this is important now.
The Right Creator
Even the creator of Ethereum not only owns cryptocurrency of its own production, but also other digital money , including Bitcoin, Bitcoin Cash, Zcash, Dogecoin, etc. Do not bet on an asset. In order to reduce risks, investments must be diversified. When investing in cryptocurrency, there are three main strategies that can be used: short-term and long-term trading and the purchase of funds based on price increases. The last two approaches are extremely risky in today’s circumstances.
When investing in cryptocurrency, you must be prepared to technologically master the mechanisms for storing and trading your funds. You need to open a crypto wallet. If you do this for a long time, you will also need a “cold” wallet. After that, you have to select a platform on which to trade. You will also need to go through the KYC process, which gives you official confirmation of the legal purity of your money and official access to offers.
- It is advisable to use exchanges to buy cryptocurrency, since money exchanges are very risky. In addition to the Cryptocurrency Wallet, intermediate workstations are needed to store backup funds.
- Then you need to determine the starting price and the asset you will buy. Remember one of the most important rules: An investor most often does not earn when he sells his cryptocurrency, but when he buys it. It is the right entry point where you can earn money.
- The entry point should be in line with market correction, while this point has the potential for further growth and should not reflect a long-term downtrend that will not work.
Above all, follow the basic rules in order not to lose your money:
- Never work with untrustworthy intermediaries.
- Do not invest the entire amount in just one asset.
- Keep in mind that the underlying asset for cryptocurrencies is Bitcoin.
The remaining coins correlate significantly with it.
Do not be greedy, and so you can avoid very heavy losses. Investment in cryptocurrency is expected to be modest, as it makes no sense to invest large sums, especially in the current volatility environment. Buying digital money is the highest risk. You must be prepared for significant losses that should be insignificant in terms of your overall investment.
Unlike the stock market, a portfolio investment in cryptocurrencies is more efficient and easier. The main feature is a positive correlation between the 50 largest digital funds after capitalization. This allows you to apply the same asset management strategy to all instruments. The only thing a portfolio manager should consider is the average volatility of the asset over the trading period. Do not forget the value of the asset. This is necessary for competent diversification, ie the allocation of assets to assets taking into account risks. The number of instruments in the portfolio is limited only by the physical ability of the trader to follow them. The short-term portfolio composition period is two weeks and the medium-term period is between three months and six months.