The right combination of investment and trading when trading cryptocurrencies
If you are involved in investing, you have probably experienced a feeling of regret after you sold an asset, but it continued to grow further.
Such situations happen especially often when trading cryptocurrencies, since, unlike conventional currencies, these assets can show growth not by a couple of percent, but by several times.
A great example is the Ripple coin, after the coin rose from $0.5 to $1.2, many investors took profits by selling. But just a few weeks later, XRP made a breakthrough and reached 2.9 per coin.
The record growth made everyone who had previously gotten rid of such a promising asset and sold their existing cryptocurrency feel sorry.
A strategy for combining investment and trading
Most analysts and financiers predict an upward trend for cryptocurrencies in the next five years, that is, no matter what price you buy a cryptocurrency at today, there is a high probability that its price will be higher in five years.
But what to do if you want money now and it’s a shame to lose the opportunity to make money on the high volatility of the cryptocurrency market?
For myself, I have long identified a win-win strategy for trading cryptocurrencies, which consists of two parts.
The first part is investment
I buy promising cryptocurrencies, mainly coins that have real applications and have a certain liquidity. Stellar , Tron, VeChain, Algorand, Binance Coin and some other tokens were purchased at one time
These coins are in crypto wallets, and I have no plans to sell them in the near future, as I hope for further growth.
But, in order not to regret missed opportunities, I also use trading for current income.
Trading cryptocurrencies to earn money
In addition to crypto wallets, I also have an account opened with one of the cryptocurrency brokers in order to open transactions through the trading platform.
You can, of course, trade directly on a cryptocurrency exchange, but the metatrader is not only more familiar to me, but also simpler. In addition, metatrader has many more opportunities than online platforms from crypto exchanges.
It is in the trading platform that I open a deal on the above-mentioned cryptocurrencies and Bitcoin if I see that the price starts to go up, and after the trend weakens, I close the order with a profit.
This approach has no scientific explanation, it just makes me feel better mentally when I know that I have coins that can rise in price even more.
With all this, the amount that I use for trading cryptocurrencies remains unchanged. A total of $10,000 was invested in cryptocurrencies, with $5,000 being long-term investments and $5,000 intended for trading.
Someone will ask why freeze money, because you could earn twice as much on short-term transactions with an amount of $10,000? But, in fact, I don’t lose anything, since I use leverage , that is, with a deposit of 5,000, I open transactions of $10,000.
The maximum leverage available for work is 1:10, but I do not consider myself a risky trader, so I believe that leverage of 1:2 is quite enough for trading cryptocurrencies, which have enormous volatility.
This is my approach to trading cryptocurrencies and it has produced pretty good results so far, but you are welcome to use your own variation. Good luck in trading and investing.