Cryptowriter: Minimizing Loss With a Strong Portfolio Foundation

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In my past two articles I discussed the very basics of what it is like to begin trading cryptocurrency and also discussed some features that are good for building a foundation for your portfolio. Now the foundation for your portfolio is dependent upon the risk that portfolio holds (yes you may have multiple portfolios) in comparison to a standard APR based bank investment. The reason that I have the risk portfolio standard as one of the worst possible way to earn money by investing is because it is also probably the safest possible way to invest your money, albeit without any profits. So with that in mind what I like to do is divide my portfolio into three sections and usually this is either two exchanges and a wallet or three exchanges and the wallet is for small quantities of ethereum based tokens that cost my rent to send. 

Main Portfolio 

With the main portfolio it is best to utilize it as more of an investment style medium and this is where, if you are trading, you trade with the big coins/tokens that have large amounts of liquidity and decent price stability (for crypto). Currently the utilization of Bitcoin in my main portfolio has shifted from something I would regularly trade against other tokens to more of a savings account for my profits that I make from trading other tokens. This portfolio is something that is traded on a larger exchange and would contain the majority of all the holdings, based on USD valuation. The tokens that are typically traded and held within this portfolio are mostly long term accumulation tokens with strong project fundamentals and a vibrant community. This exchange for me is COINBASE Pro as it offers the best security and the most liquidity (US Resident so not many options) and a decent amount of tokens from mostly older projects that have a large backing. This is also my main portfolio because it offers me the easiest and fastest way to withdraw USD for free straight to my paypal in practically seconds.  

 

Secondary Portfolio

The secondary portfolio can be a few things depending on your preferences within the cryptosphere, but for my secondary portfolio I use an exchange that offers hundreds of tokens and for the most part the trading is very high risk. While this is what I would consider a risky portfolio that is strictly for trading micro cap tokens or rare tokens that cannot be found anywhere other than Uniswap. Luckily they don’t just offer micro cap shit coins but they also offer a lot of, now large projects that were once bundled in with the shit coins. So with this portfolio the trading style is designed to completely eliminate any risk as quickly as possible, and then only trade with the profits that were made. This is also where I like to increase my bags of some smaller project tokens, so while I am trading them and sell for profit I only take half profits and keep the other half of the profits in that coin. Once I reach a point where I am trading with pure profits I will begin placing those profits in Bitcoin and Ethereum and will use those to earn interest while I am not using them. For example, I currently have just around .002 BTC on one of my exchanges in which is pure profits from trading and so every 7 days while I accrue more sats through trading I also do a “7 day Lock-Up” and earn about 11% APR on my current holdings. The combination of having the ability being in the US and being able to trade some pretty amazing project’s tokens, plus I am able to earn some kind of interest on a large portion of the available listed assets. While it is a smaller exchange and many tokens have very low liquidity, it offers a host of advantages that I quite enjoy.  

 

Thank you for taking the time to read my article. I hope this has helped give some information and encouraged people to do some more research! Any comments are greatly appreciated!

~Trever Russell

DISCLAIMER:

I am not a professional financial advisor, all information within this article is personal opinion based on my experiences, nothing in this article is meant to serve as financial advice and shall not be construed as financial advice in any form. The sharing of my personal experiences is for entertainment purposes and I nor cryptowriter can be held liable for any information which has been misconstrued and wrongfully utilized as financial advice.

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