Coin Money Management Lesson
Guys today i will talk about how to manage you #portfolio. #Remember no one can be good/successful trader without having a good strategies to manage his #capital.
As a crypto trader we know that #crypto market is very #volatile so you must diversify your #capital my recommendation is 30% #usdt and 70% in #btc.
And from that 70% invest only 5-8% in one #alt that you want to buy don't invest all your capital in only one coin so that in case market dump you can buy more and recover your loss #quickly.
Why 30% in usdt because whenever #btc crash you can buy the dips to maximize you profit.
#introduceyourself write your views in comment and up-vote.
Hope so guys if you follow this #strategy you will not get burned whenever market crash in fact you can make some quick profit because after each crash market bounce 20-30%.
Hey farnadas, good to see that you have a strategy. I have some critical points
Why diversification at all? Its no hedge against a tail-event. USDT is a good point but why no fiat on a broker account? its 100% uncorrelatet so there is zero risk-exposure except the inflation.
I see the point in the 30/70 heuristic but what is the allocation from total investment capital? This is what determines the exposure to a possible blow-up.
When there is a real crash, we have the problem with the brake even fallacy: a 50% loss, does not simply need 50% gains to get back to break even, it needs 100%. If your total is 1000$ and you allocate 700 in to Crypto and 300 in to a Stable-Coin like USDT or Fiat than your base after the crash is 350$+300$=650$. Now when there is a bounce back with 20% its +130$ so total Protfolio Value of 780$ and it will be a net loss. Your right its a faster way to recover (if there is a bounce and no "bear-trap") but it will be a net loss anyway. what do you think?
P.S. welcome, i will resteem your post. You can use the "#introduceyourself" hash tack to get some viewers.
Thanks. for advice. its my own strategy. you can edit or change as per your need.