Bitcoin Forum

Lately, I am thinking of spending more time into trading. Until now, I was a part time trader (actually holder) looking into only a few top ranked coins. Now, I have decided to go deep and try to make some profit.

Let's get back to the topic.

In theory, in traditional stock market, if we invest into two negatively correlated share, the risk are minimized because if for instance; Stock A's price increase, stock B's price will be decreased as both of these are negatively correlated. As a result, investor will realize minimum risk; profit is lower as well. The goal of such investment is to minimize the risk as much as possible. Since the cryptocurrency market is highly volatile, if we choose positively correlated or only one crypto to invest in; the chance is we may lose half or more value of our investment; hence, in theory, negatively correlated can save us from losing the investment in a significant value.

I have got this site providing correlation of different altcoin against bitcoin- https://coinpredictor.io/altcoins

Let's say; Coin A has a positive correlation of 0.89 against BTC price & Coin B has a negative correlation of 0.89 against BTC price.

Are we safe to say investing on both these coins are minimizing the risk; provided that I will have a good research on both these projects to ensure that these are not shitcoins? Ignore the fact that all coins without BTC is a shit (Note for bitcoin enthusiasts).

Probably you are talking about diversification asset with a few altcoins to minimize the risk trading. But the reality you from price movement provider,none one of altcoin has a correlation positive against BTC went the correction/rally was happening. Went the bitcoin price was up or down, the value still gets downs USD/BTC pair except for stable coins, the coins/token volatility cant be tracked, probably could be more/less than the past history, however, i don't really agree what has been explained on the website.

The conclusion from me, it's not really gonna minimize your loss with diversification assets on a few altcoins. 

No, with my understanding of trading, investing in two altcoins isn't minimizing the risk, you can research on two altcoins and yet they turn out to be shitcoins. Investing in many altcoins raises the risk of losses because I don't trust altcoins diversification as they are so many and you cannot pick out the one that will be the right one for your investment plans.
Can this site be trusted, do you think a trader can invest based on their predictions?

I would say yes, but if your portfolio consists of just A and B then I think you should look at the A vs B correlation directly.

Good point. I haven't done any proper analysis but I guess that in a strong trending market (e.g. 2017) no major altcoin has a negative correlation against Bitcoin.

I actually do not trust this "predictor" site to give out correlations without knowing the algorithm behind it. Do you have any idea what algorithm they might be using? Unless I know that I wont use it. Also if I know that then I would probably learn how to apply it myself. ;D

Get my point? You cant always use these methods to mitigate risks. The best way to mitigate the risk is invest in those altcoins that you know (not feel) have a reason to go up in price and demand. Sadly 99% of altcoins dont have any method to generate a market demand and thus they die out.

To be completely honest, I do not prefer to go for the altcoins at all. Keeping the focus on bitcoin and using a dollar cost averaging on bitcoin to buy and sell at proper low and high respectively is what I feel minimizes risks.

You're diversifying for sure.

However, I'm not sure whether or not it's necessarily a good idea to invest in two coins that are completely opposites of each other. That could potentially mean that any gains in one of the coins can be offset by losses in another coin in your portfolio. I'd rather pick a sector which I think has potential and diversify within that sector.

Also, you're not completely eliminating the risk that one of the projects will go rogue. This indiosyncratic risk will always be there.

It's safer to diversify with another kind of portfolio, such as mutual funds, gold index, etc rather than investing in altcoin (even if they truly have a negative correlation or high independence from Bitcoin movement). The crypto market is still fragile, a movement in Bitcoin still affects nearly all altcoins so the net positive is relatively small especially if you're not in the bull market.

If you still want to do it, make sure you're not in a downtrend and the overall market is showing strength against Bitcoin, and if Bitcoin starts to shake things out, close your portfolio quickly. dbshck & ryzaadit have a good point about it.

if in forex trading it is referred to as a hedging strategy, but the forex system is not the same as the crypto exchange system in general, now there are many forex trades that have crypto trading so that they can use a hedging strategy on the exchange,
maybe we can use a stable coin for hedging, Although it has a small risk, the profit is also small, especially if without leverage.

This one. The first thing that comes to my mind is the baccarat table, you can't beat on both banker and player, so it will simply negate each other.


So if we are talking about diversification here, better go to stocks or precious metal. It's hard to invest on altcoin nowadays and as much as we love to see that website with the correlation thingy, I doubt that it will be very much effective in the long run, just saying.

Negative correlation refers to if BTC increases, A will decrease, if BTC decreases, A will increase. I guess that's what I'm looking for. Well, the result is limited to last 100 days.

That would be good. I have to do some extra work; that's not something hard but lot of works behind the scene. I guess I can do it without finding out the correlation between both the investment. Rather, I would put $100, $50 in BTC in $25 for each altcoin. It's the same thing, isn't it?

The algorithm is simple. As I said above, they just have had some math on the last 100 days & based on that, they have calculated the correlation.

That's exactly what I'm looking for. If I lose something in project A, that will be covered by project B. Of course, both the profit and loss will not be same. There might be a different and that's what I will realise. Not much risk, not much gain.

Lol, it would be an experiment for me. Wouldn't go for much at all. I am really now more excited after getting the price update on 2 of the negative correlation altcoin; which more or less following the negative trend- that's from 2 days data though  :D

Thanks and yeah, diversifying into another asset is of course good idea. Actually, I'm trying to have an experiment if it works at all or not. I'm trying to diversify the risk from same industry. It's a well known practice in traditional stock market but I don't know if anyone ever tried in crypto; of course did since we have the site to get the correlation factor.

Well, the chance of the method to be effective here quite low though. In stock market, we might have seasonal things which can affect a certain stock positively in a certain period while other stock may be affected negatively in that period. Since, in crypto the real use too low, I guess it won't much work. I will of course have a try through following the correlation factor of the site shared in OP and let you guys update later about the output.

General intelligence says that it is best to invest and trade using a limited amount of your total invest-able capital.

That intelligence is established in two general ideas: risk and reward.

Measurably, the larger your bid size, the more potential risk / potential reward per position. Bonus is nice, but to ensure rewards over time, it is vital to limit risk in the short term.

And, for your case, you'll need to understand that you're trading for profit not for just loosing out the money invested on one coin while profiting out the money invested on another opposite coin. I can understand that risk management is also a thing, but minimizing the risk in such a way that you're not even generating profits while trading coins, makes it quite non-sense. And yes, what you stated over the OP, its something that will minimize the risk of losing money by 98%.

Could happen if :

• The coins/token was really a shitcoin with a huge gap order, the coins don't have volume trading so he have the same price went the correction was happen.
• The coins/token on their rally at that time went the correction was happen, because of that the coins can still on green percentage for the change price 24h/7d.

Since you looking safe coins for an investment/trading, shitcoin cannot be an option for alternative investment the volume & order book was really small. I take one of example from the site :

• HAC : Not listed on coinmarketcap
• RAIN : No Data.
• GunCoin : Not listed on coinmarketcap

I check one of the coins from the site, they said :

The coins information only listed on coingecko, why he got a result "very strong positive relationship against bitcoin" because the coins don't have so much activity trading its mean shitcoin without volume with almost 6 months according to the chart from yobit so he got the same price went the rally/correction was happen. Like what i said, on list 1.

However, in my opinion and research about the correlation against bitcoin. The result like this, went the correction was happening the USD & BTC value for the coins can be decrease, for the rally the value of USD can be increased/same but the value of Bitcoin can be decreased/same at thats time.

I'm not sure but putting $50 in BTC and $25 on each A and B means you're not well diversified. When Bitcoin goes down, A will go down too. You will have loss on two coins (BTC and A) and positive on one (B). You should only put BTC and B or A and B if you're looking to diversify your portfolio and minimize your risk.

In fact, correlation is just a statistical function.
https://wikimedia.org/api/rest_v1/media/math/render/svg/2b9c2079a3ffc1aacd36201ea0a3fb2460dc226f
image source (https://en.wikipedia.org/wiki/Pearson_correlation_coefficient)

You can even do it yourself using Excel (=CORREL) if you have the historical price data, which you can get from sites like CryptoCompare (https://min-api.cryptocompare.com/) for free.

Wouldn't it be more practical if you only invested in bitcoin, gold, other metals and also invested in things in the real world? Look at the prices of altcoins in relation to Bitcoin, People who bought ETH for the price of 0.09 BTC are suffering big losses and probably won't see ETH reaching 0.09 BTC again

I'm not going to invest in such coins which have less liquidity/volume, no much exchange etc. I have set up my criteria for choosing coins-
1. Must be listed in Binance.
2. Must have listed 1 more exchanges which is well known.
3. At least $1 million Volume per day.

The first negatively correlated which I'm thinking of investing is- dock.io (https://coinmarketcap.com/currencies/dock/), it has an average of $1 million volume and listed on exchanges like Binance, Kucoin, Huobi and so more. Another one can be VeChain which has a volume of more than $50 million on average. These are not fixed yet. I'm closely looking into coins and trying to pick two best. The list you have given are totally shitcoin and I'm not going to invest in such coins of course.

If correlation factor would work in crypto & someone would invest in negatively correlated coin with ETH, they would never face such huge loss at the first place. Talking to ETH at 0.09 BTC wouldn't be much of hard once BTC hit ATH and alt started to gain weight but who knows, ETH supply has increased a lot as well.

I will share you guys which coin I will pick & let you know the update weekly if possible or monthly.

Im into forex trading and im fully aware about correlations and other similar stuffs.The question is, do these things applicable to BTC? Possible but not all the times.

We cant apply this on several coins but lets say we do correlate with all alt coins in the market.We do base on dominance on here and i believe this is where most people do base on
rather than spotting on several alt that do possibly correlate bitcoins price.

One thing i do follow which is looking on dominance over alts then this is where i do get my basis.

I don't really see it as an effective way to minimize risk on your trading. I used to practice altcoins diversification, made my research and boom, I just had the best shitcoin and another one on my asset portfolio. There is a lot of coins out there that could convince you easily as the writers being literate and a very convincing project. But it often turns out to be shitcoins.
Nevertheless, two altcoins probably enough as options to take your investment with (top 10 on CMC is proven). Monitoring the amount is enough and at least you were able to minimize your risk.

I don't agree with you on the ground that apart from Bitcoin all others are shitcoin. In as much as I strongly believe in Bitcoin I also do believe in coin like ethereum and I don't think it will right for anyone to refer to ethereum as a shitcoin. Although, you were not specific about ethereum.

I don't prefer having altcoins in trading just to minimize the risks. Risks will always be there. I would rather focus trading in bitcoin because i know  it will ensure a positive result more than an altcoin can do. Diversification would bring a profitable result if you don't end up having shitcoins.

The floor is wide for you to make some test. As I read some of your responses here, you already have a good knowledge to start with. It is just that you are confused about some of your good ideas.

We have our own definition of "minimizing the risk" and maybe your way, can be considered as one but on the other hand, it might can't be considered on our own strategy.

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Read that statement again by the OP "carefully" and "slowly".

How to minimize the risks with trading in bitcoin and altcoin just buying bitcoin during have lower price and never buy after price is on the top, you will get chance to be lost much money after buying some coin have been on the top price, although many recommendation to buy but never take mistake with buying on higher price.

there are some types of trading and it depends on what we are basing here,if OP wants to be in Daytrading then that is really risky to Buy more than one altcoin but if he can stand for at least semi long term?in which he can afford to hold the coins when suddenly dump after being added to His folio?for me that is tolerable to Buy 2 or more alts for less risk,well this is how i see things because i am not really a trader as i am a Holder and don't want to make way into more risky like DayTrading.

What's the best strategy to minimize here is with bitcoin all alone and I couldn't find any good picks on altcoins while it wasn't gaining good value for a moment. There's no potential increase on selected alts yet, and it doesn't showed any further growth even btc started to rise fews hours ago. That's very important to accumulate our btc balances and keep holding for several months, then you'll the results of your patience.

The reason why do people do consider on putting some hopes on alts because they cant wait too long or too impatient.

Its no surprise though yet we do have our own will when it comes to investment matters.Minimizing risk will just depend on the steps you would take.
If you lost due to mistakes then you do know on what would you do next.

The only way you will minimize your risk is by testing the hell out of your strategy over a significant sample size. Don't even think about dropping real money on this until your strategy has been proven to be consistently profitable. Your money management needs to be rock solid and compared to what most buy & hold guys do, you actually need a deeper understanding of timing trades. also another way to minimize risks is to not doing day trading as much as possible.

Minimizing risk is by monitoring every now and then your portfolio and the market performance. While it is good to diversify. Know that we need to monitor ever investment we have. Successful Investing is about monitoring the risk, not avoiding it. Sometimes in those risk we take, the more chance we can earn. Just research and analyse whether those alts are worth risking for.

Actually once bitcoins start rising, most of the altcoins start descending onto the dip. This is the case only because people who already have their funds invested into such altcoins rapidly start moving their capital from the altcoins to bitcoins only to maximize their profits.

This indirectly leads to dump of those major altcoins and bitcoins keeps on the ascending graph. Once bitcoin stabilizes onto some peak than most of the altcoins start showing us some growth. In this situation, holding maximum capital into bitcoins would prove beneficial as it might give us some instant profits if we consider buying and selling simultaneously in the small price movements.

I definitely agreed to you sir, were Ethereum is not a shitcoin, it was one of the promising altcoins actually in the market of cryptocurrency.
And one of the most useful platform too in terms of every new project arises in this field of business of crypto as well. Sometimes, we need to be very careful in bestowing like this things here in the forum.

It does minimizes your risk but this is not as important as things like proper trade sizing or not deviating from your strategy coz of emotions. Correlation is huge anyways in crypto so if you stick to some simple rules like ETH tokens is just ETH on leverage etc. then you should be fine and not over investing in same concepts. Also important thing is not betting against yourself ! You might go ETH long and EOS short while they are aiming for the same market, e.g. steel industry in real life. Spreading between 2 companies in the same sector is actually quite good way of diversification.

Did you find that it wasn't beneficial? Cause for me that action is minimizing risks. I never use all moments, I only try and aim to use best ones or sometimes good ones and never judge myself for my actions when I profit by saying that if I wait a little more, I would profit much.
But I see what's your point, usually altcoins follow to bitcoin but there are some that are independent from it and that's a good moment. I wouldn't say it minimizes the risk but probably the profit you may get from one altcoin won't be high enough to cover bitcoin's loss and opposite.
It's hard task, I may do some research on that, worth to keep an eye on.

Its just a matter of choice on a certain individual if he can embrace risk or would completely get rid of it by just simply holding for too long.
Altcoins price doesnt correlate with Bitcoins price from time to time and as you said which is actually true that there are even times that
alts do increase on we do least expect and making out profits on it.It might not be enough to cover losses but all do varies on how big your position
or the money you have putted on.

There is minimizing the risk and there is minimizing the risk. You can literally never go into bitcoin and you will have zero risk losing money in this market, however your dollar will soon start to worth less and less over time so you are still in danger and that risk is just not coming from crypto anymore.

On top of that you can get in and be so safe and act so decently like have %1 stop loss and 1% profit and not move any other direction that you may end up maybe profiting slight bit but that's it, or lose slight bit but that's it. So, when you are minimizing the risk, you are literally risking more than you know. Money you didn't profit is also money you lost but people do not see "I could have made 300 more here and 400 more there" as losses as much as they see the normal losses.

Once again, by relying on the site you highlighted on the OP you're putting your fund at risk by relying on an opinion from a total stranger, giving your financial advice through projects worth investing in based on their correlation with bitcoin which to some exact can't always be accurate at every price movement of the market.

For example their's this school of thought of Litecoin always profiting from the upward price movement of Bitcoin and from previous record, that have (mostly) been the case but after paying close attention to the Litecoin market last year, I noticed that wasn't always the case and I'm meant to believe that'll be the same fate with the correlation theory.

The cryptocurrency market is still highly influence by emotions so irrespectively of the strategy you're deploying to combat risk, you should understand that, the strategy can't be 100% accurate at all times. Nevertheless, since you're speaking on diversifying your investing, I won't recommend you concentrate on just cryptocurrency instead invest in other Investment vehicle that aren't correlated to bitcoin.

Look, its a subjective opinion. For someone who managed to sell ethereum at the proper time and make money it is not a shitcoin. For someone who was stubborn enough to hodl during a drop would believe it is a shitcoin. Thing is one can hold bitcoin for long periods of time and then sell at good profit but would not be the same with other coins.

Back to the OP, I think you should be careful like I said in my previous comment. You cannot trust anyone on this market and this I cannot stress enough. The site you are speaking of, may just be making up stuff and trying to pump some coin at the expense of another coin. Good luck making money from watching them.

Your explanation is very perfect and it can simply mean that the person will be in lost. Op, relying on a site opinion is highly risky as against your investment as pump and dump group is not advisable since they are in to make profit too.

Shitcoin is not about the price, its about the level of quality of a coin. You may have bought ethereum at 9 dollars and sold at 1400 dollars and you may call it not a shitcoin but I can tell you there has been a ton of people who bought nano at cents and then when it reached 30+ dollars they sold and they still think its a shitcoin right now.

You may also have bought ethereum at 1400 dollars and had to sell when it was 80 dollars and it still doesn't make it a shitcoin, there are a ton of people who bought bitcoin at 20k and had to sell at 3k and even they wouldn't call bitcoin the OG real coin a shitcoin neither. So, as long as a coin has good quality, they are not shit coin, irrelevant to the movement of that coin up or down.

That's right because most of the altcoins tend to be a shitcoins. Don't trust any coins because the demand of coins will always based on the market. That's why always observed the happenings in the market and make a technical analysis about it for you to know your next strategies or steps. But if you're no into an altcoin, then focus on the most popular and reliable coin, bitcoin. But we're still under the process of holding and hoping that bitcoin will again reach a $10k like its price in 2017. Everything is risky, but we also need to grab the opportunity when it is certain or not.

That's not minimizing risk, the question is after you buy bitcoin in a lower price, until when you will hold it? Because everyone knows that market is very uncertain and bitcoin is very volatile. You should know that at first, and that's still risky if you buy bitcoin now. It is very hard to make a decision when you know that altcoins are not that effective to be used as an alternative to bitcoin. Some altcoins are shitcoins, that's why it is not easy to make plans and strategies. All you have to do is observed the price movement on the market, it will serve us your guide for you to make plans and do good decisions while waiting for the price of bitcoin to rise again. Everyone is waiting for that to happen, but let's expect the unexpected.

It might actually be beneficial in the stock markets as the markets there are not much volatile and hence the two correlated shares would always go in their opposite direction not in much value which might give you minimal risk but surety of profits.

But, considering this in cryptocurrency markets I do not really think we might be able to find 2 or more coins which are negatively correlated to each other because of the high volatility markets. You might end up in loss if you purchase 2 such coins because usually in cryptocurrency patterns, the graphs move almost similarly and once we enter the bull or bear markets, each graph starts moving similarly following the trend.

What you are talking about correlation is completely a new thing to me even I am into different asset trading for more than five years. Basically, to minimize the risk I just opt for reputed trading pair rather than going with new or unknown trading pairs.

Calculated risk is my favorite way of eliminating unnecessary risks associated with my trading. It means I will choose a signal based on how big the stoploss level, it will be having. When the stoploss is not within my affordable level, I will just skip that signal regardless of how much profit it will be promising or even it will be from reputed signal generating agents.

Stop loss and take profit are essential for managing risk.

Before you enter a position, you want to know exactly how much you can lose (in worst case) and how much you can win (in best case).

I'm not sure if you are familiar with the exchange called mushino (https://mushino.com), but they allow you to do exactly that.

There you can attach a stop and take profit to your position and they will show you how much you can lose and how much you can win.

It's really great for risk management. Especially when playing on high-ish leverage.

Trading always requires estimations and calculations to handle risks which will be the launchpad for getting you into profits zone. It must be a good idea to skip the signals which are not compliant with your risk-reward calculations. When I was new to trading, I was deliberately looking for signals so once I get them, without calculating anything I will simply enter and then lost all of my capital. When we are not calculating our risks then losing all the capitals will be the only result we may need to face.

Trading must be having lots of aspects and ensuring each and every aspect is difficult for most of the traders and this is the reason trading is not profitable for many traders. At least we must focus on minimizing the risk so that we can sustain with trading and when we are staying with trading for longer duration than we can slowly start seeing profits.

I love the last part because it is the truth.
Is it minimizing the risk or just an equalizer?

I don't get it. If you will waste effort into researching for one project then you could stay there.
If you make it two then you are just risking more. Right?
Or, it could both profit if done right.
There is always risk on both side even if you put so much positive attitude in it.

Just because it works for stock investment does not means, it will work for cryptocurrency trading.
Every thing about crypto is just unpredictable. And its funny to say that the time or period we think that the there won't be price increase, it might suddenly skyrock. If best, stop listening to price prediction, and follow your instinct. Many of those predictor have ended up misleading. Make research of coins, and stick to three of them.

Practically, you are right because today's market has an answer to this. There are many surge and the most are from the altcoins that we never believed to be called coins. Trading has made me to adopt a method that has potential to handle risk, I mean potential risk. Whenever I trade with altcoins, I usually pick my profit at 2-4%. This is how I possibly minimize my risk.

One of the fastest-growing earning today is with the use of crypto currency, and many people would like to make some investment to this because they know the potential of the coins to increase and give a lot of market profit. Before we start and dive in into the crypto world always make sure that we are ready and fully prepared of knowledge, one of the key to success is to have a lot of experience and skills that is related into the crypto world you can use this as an advantage to the other trader and win your trades. Even we are skillful at trading still, it is too hard to predict the market movement of the crypto because we all know that the market price of it is very volatile and many factors why does the amount of it goes up and down. I think one of the best solutions to avoid loss of income is always seeking for the information and decide on your own because today nothing can predict the market and it is all about you and your decision what will happen if you are going to earn a profit or not. Crypto is full of risk and luck too.

It isnt bad for you to get up some reference on other traders or analyst but be sure that your own analysis would be followed in the end of the day so that you wont end up regretting if price do go on opposite way.
Its true that traditional markets like forex and stocks is totally different from cryptocurrencies but the overall concept is just the same, they do only differ on volatility and security matters.
Minimizing risk is always the main priority it will just depend or vary on individuals technique and some sort or mix of intuition or instincts.

With the risk present in Bitcoin and the unpredictable volatility movement makes it more hard to earn a profit, what more with the altcoins?  So it is really important to minimize the risk as much as possible there is a chance to get that profit. Whatever convenience you find just to minimize the risk, just take it and you will be grateful of what you choose even if it isn't enough.

Since the bull run started, the profit desired by any trader who can be realizable only if the trader can stick to 2 - 4%. Just for your information, four days ago I made a good profit from livecoin.net with GUIDE tokens, most problems we traders had or have is greediness to take profit. Altcoins have good profits if you can research into a token before heading  for purchase, trading like gambling cannot yield any useful results for any trader.

Speaking as such I made some resolutions that help me in trading. For example, I promise myself to never trade an altcoin that has been in the market for less than 2 months. I know I miss a lot of big earning opportunities but at the same time I don't make big loss either as I used to earlier, there are lot of pump groups in telegram that actually made me feel like this coin is going to be pumped very soon but thankfully with time I learned that "no one will ever serve you food on plate" you have it do it yourself and anyone who says they will pump a coin are doing nothing but getting their coins sold by creating such hype.

So, my simple method to minimize risk - Just don't trade new pairs and don't expect too much profits from the heavy pairs like ETH/BTC won't fluctuate too much so just keep making smaller but regular profits.

In fact, it seems to me that each trader can perceive in his own way the possibility of minimizing risk, since one trader can use only up to 5% of his asset for trading, so as not to risk large amounts of his funds.  Someone can study the charts of their coins more carefully in order to timely change their trading plans for other coins.  And this can also be called risk minimization.  In addition, an example is the procedure for converting any cryptocurrency asset to USDT during the fall of the cryptocurrency market.

Just reading charts won't help  a user to reduce risk and make quick profit. In fact, following the chart might cause more losses than profit. The charts always don't help since the prices of crypto currencies are unpredictable due to its volatility. The prices of altcoins are even more volatile than bitcoin. Any external event can have huge impact on the prices of crypto currency.
The only possible way to minimizing risk is to play safe by investing on well known coins and holding it for the long run.

Understanding the market can reduce the risks, traders are usually trading without relying in any kind of analysis. They are just buying and selling because they got hyped. We should not become any of those traders because it only means that the trader have poor risk management. Understanding the market can help us to minimize the risks where we can lessen the losses that we may get and also to maximize our profit. We should become a trader who are focusing in risk management first than to earn profit because we will not become a succeful trader without risk and management.

I am not an experienced trader but there is no such max loss and max profit scenario in crypto trading, for example you bought ETH an year ago you cannot predict what would be the max price that ETH can raise and what's the worst it can give. I mean this has been the prospect with crypto trading that you are never certain whats the best price to sell/buy.

Another example is when bitcoin price rises we are never sure when to sell some and when to buy some.

But, the reputed pairs won't give you too much of a chance for profit because they are already stable and you are either a big time holder who can wait months for the pairs to move enough to juice out profits.

You never know what may happen.

The volatile price market is so hard to manage, that is why we can't really predict or manage our investments so well. You never know when will be the lowest and when will be the highest, so we just do what we can do. If you want to diversify your investments, better stick to some known cryptocurrencies to avoid scams.

You are right that it is very difficult to manage the market in terms of investment No one can say exactly when prices will go up and down That is why we should all invest in different places before investing. shitcoins that talk about reducing the risk of investing can never hurt your wounds if the market does not survive as Bitcoin prices rise. Secured coins should be traded to reduce risky business.

controlling emotions for new traders is indeed a very difficult task to do because usually new traders will use all their capital to get into the coin and after that the price falls will make them panic they do not have full experience about the price of cryptocurrency which could again become expensive and possible also impatient factors make them become losses because of selling their assets at low prices.

Volatility is really hurting all of us when trading, the shorters and the longers but in the end all of us lose.

The reality is that is the market, sure there are some traders in the world who have came to crypto from other stuff like forex and stocks and what not and they know what they are doing and they know its a regular thing that this happens.

However, some of us are from technological backgrounds and not from financial ones and at first when volatility happened and the price went up and down so much we got really confused, we weren't expecting to double our money in a month for example but we also didn't expected to lose 50%+ in a month neither so when both of them happened literally inside one year we became seriously shocked and didn't know what to do.

I suck at trading in volume. I prefer just buying BTC and maybe some alts with money i can lose and check later on in a (few?) year(s).

Is hard to get profit when risk a lot. i can't risk much as i'm not the best trader , i preffer to buy low and sell high

You can't avoid risk completely but you can diminish it. First of all, don't ever invest more than you can take. Also, don't put all eggs in just one basket which means that you should diversify your portfolio and choose different types of investment. It's also important not to be greedy and to set realistic goals that you can achieve and always to have a back up strategy.
Even when you are doing the best in trading don't forget that losses are always possible and be prepared to make decisions fast and without hesitating.

Wrong thing here on most people is that they do rush up on making profits which do results into mistakes and setting realistic goals rather than rushing up yourself
on thinking on making big profits or income.Risk is inevitable but somewhat can be suppressed depending on how you do make up such decisions.As said time will come
that losing is there and your experience and knowledge will tell you on how to deal with those things.Minimizing risk wont really be that easy but not impossible.
Just dont rush and always carefully think on steps that you should take first.

It does work in crypto trading if you do it the right way. When you buy any coin you must have the prior knowledge why the price should rise and why it might fall. I mean you cannot expect an immediate J-curve with any crpyo pair but you might very well see that in long term the coin will do good. You just need to make sure that the coin you are buying is not just because you heard about it, you must know something about it like we do in stock investment.

Crypto trading does not work like that, I have had strong instincts for many coins and ICO's but they ended up being crap as others suggested me. You have to be with the market to make profit in the market, you cannot swim alone.

You can follow that way to make a profit, but you need to remember that you must have a good time to determine the low price. Otherwise, you cannot get the low price. You can prepare to buy the coin when you see the red candle appear in the market so you can decide on how much money you want to use to buy the coin.

Besides that, you should be careful because the price can get down for more if there are dump happen in the market, so you need to have more money in your account to buy more amount.

Easy to say but really hard to be done on just simply trying to buy low and sell high. We do always try to look for the bottom but with this very unpredictable market this had always been a difficult job.
We do try our bets to minimize the risk as we can but due to volatility we do really get confused nor even panicked when the price tends to go opposite on what we do expect.
As said by other which experience will be the thing that matter most yet this will be the thing will push you to make good analysis which in result in good trades.

Yes, even the pro trader will feel the same as us. Trying to search the lower price will be difficult, but we can try to check the pattern from the last time of the low price. If we can find that pattern, I guess that we will see that there is a signal to find out and predicting the lower price. Although we cannot always get the lowest price, it will no problem because we already get a lower price.

If we only bet to minimize the risk, that will not always work because you know that the crypto market is unpredicted, and if we cannot find the pattern, we will not have a chance to minimize the risk. So we need to learn more to find a good time to buy at a low price and sell at a high price.

I agree with you that once the damage is done it's much harder to reduce it That's why I also try to avoid risk in the workplace For this reason I control my emotions and base my education in various places and then trade. Many times it is not possible to reduce a single loss.

Years would be good if you are into long term investment, but you don't only hold that for years, aside from that, you also need to ensure you have a target amount to sell your bitcoin and altcoins so you will not miss the opportunity, the best time to sell is when there's a bull run, so aim high as everything possible when there's a bull run.

Too much diversion is again bad. There needs to be a balance between keeping your money in the form of cryptocurrencies, stocks, bonds commodities, precious metals and liquid cash. You have that and you have the opportunity to ride a wave in every market. You dont have to watch while another popular market goes up with a fist on your chin and a lopsided grin ;D

But diverting too much within the crypto sector like putting in money in too many altcoins is risky. What you need to focus on is bitcoin and keep the altcoins to a bare minimum for the long term.

Everything which is too much is always bad.!

When we do talk solely on crypto investment then 80% would be on BTC and 20% on alts but well this would vary on each person
yet we do have our own will and instinct on where we do like to put or throw up some money.Risk is always there but doesnt
mean that diversifying would be always good from time to time.

Normally, the stablecoins made sure that minimizing the risk was there, because before they were a thing, people would have to withdraw their money to fiat instead of stablecoins, nowadays it is easier to stay in crypto by just moving from a crypto to stable and then go back, a lot easier than doing the same with fiat for example.

That is probably the best way to minimize your risk since you basically get out of the crypto market all together while also staying in crypto market at the same time, which is a marvelous invention if you ask me. Aside from that I doubt there is a better one, you can secure your coins by using a hardware wallet for example but that is more about security and not minimizing the risk of losing value when the coins are dropping in price.

I would argue that trying to diversify in altcoins is not true diversification and if anything you are increasing your risk if you do that, most altcoins with the exception of stable coins are correlated to bitcoin so you are not really getting a lot of protection from them.

However as we know many altcoins are not good investment prospects and are in fact shitcoins, anyone holding a large amount of those coins will sooner or later lose his money, true diversification and the minimization of risk it carries only comes from choosing several different markets, this is like trying to diversify yourself from the stock market by buying several different stocks.

As long as we are choosing the best crypto currencies the risk factor gets reduced in long term trading but for short term it is still relevant so trade based on btc value or USD value and try to make more reap for that day then think about moving to another coin if it becomes less volatile or lost interest from more crypto traders which can be identified by watching their daily traded volumes.

A type of diversification of that style in the Crypto market that I have only seen in the coins that make Pump and Dump, but it is because it is their form of survival.

Since Bitcoin is the King's currency, all alternative currencies follow Bitcoin, because alternative currencies have no life of their own, if Bitcoin goes up, the immediate effect is that alternative currencies go down, if Bitcoin goes down in the same way, so that other cryptocurrencies rise in price, Bitcoin must remain on a lateralization or upward trend, in the case of the 5 main alternative currencies of the CMC, the graphics are very similar to those of Bitcoin, and it is logical, they follow the same path of Bitcoin And that's why it's his behavior. I think that a more viable way to diversify would be with gold or real estate investment.

It could be a usual mindset that most coins were depending on how it's going to be affected with bitcoin's increase, but for now I would still remain fair on what I believed. Because as far as altcoins were most concerned here, that doesn't confirmed with the actual changes that we see right now in the market. Most of the promising coins that pumped the highest during 2017, has no definite position to obtain a nicer price nowadays. In fact it has a slow trading volume compared with bitcoin.
In order to minimize some possible risk, never panic and choose holding while there's still chance for altcoins to soar back higher.

Controlling your emotions is not enough.

You should also control the money you are investing in a certain cryptocurrency. Emotion is not always a problem in trading. With this kind of market that is so volatile, you don't know what may happen so it will really start with what you know and how you can manage your balance in this fast phase market.

After all, when you have chosen the best coins it is very likely that demand will not decrease so that price movements will always occur there, if so then come back to yourself, whether you can be consistent or not, because when you are easy to be pessimistic then the risk of loss will be bigger than before.

There are a lot of factors that should be considering in order to lessen the risks in trading. First we must identify first what type of trader are we, are we passive trader or are we a active trader? By identifying that, we can knownwhat type of strategy that is applicable to use. Strategies of long term and short tern trader are not the same so it is better if we will know what type of trader are we. The second is we should be prepared on unexpected situation because it is a game of probability where there are always chances of winning and losing.

We should also focus on our risk and management, it is the best way if we want to lessen the risks in trading. We should always have a plan before a trade where we can create tactics and specially cut loss strategy. Diversification is also matter and be sure that do not invest all of your money in just 1 coin. Spread it in 3-5 altcoins because it is the preferable diversification. We cannot totally remove the risks but we can lessen it if we really understand the market and if we know what we are doing.

First you already go into next level, congratulations. Chance to win ( possibility ) is same 50 - 50 but by using management risk it will not giving you bigger profit but saving you from bigger lost. Most people avoid it because must doing calculation and fit it with their target and money, that wasting time. Protection is our priority, use it and profit is our prize.

This is pretty much the things that every trader should keep in mind. Everything summed up in one comment. This not only minimizes the risk you are to suffer as a trader but this also leverages the chances of you getting big profits in the crpyotcurrency trading world. If I could just add one thing, I'd include to not buy or sell impulsively. Observe the graphs and the market. If you don't know how to read graphs there are free videos to watch that'll help you gwt a deeper understanding. It's hard to predict cryptocurrency prices but if you are saving a relatively stable coin, then this will help. For volatile coins reading charts and news could give ypu valuable insights on what step to take next. That way you can reliably purchase or sell a cpin if you must.

Exactly, most of the experience will not bother about the risk because managing funds are always good in order to reduce the loss. So without calculation, it is impossible for a trader to make a profit, we need to restrict ourselves otherwise, we are going to lose a huge amount of money.

IMO, as long as I profit with bitcoin then I think I am fine with that.

Pairing is something that many newbies are making errors.
You pair BTC with an altcoin (not a stablecoin) then what do you really want in return? Do you want to pack yourself with more BTC or that altcoin which you have used for the trading process.
With stable coins too it is different.
Some do prefer USDT in profit for a lower risk, in fact no risk of volatility. Then some want to grow their wallets with more BTC for future exchange.

I would agree that devilslayers comment is definitely one of the best I have ever seen in the bitcoin risk management topic, however even tho it is one of the best it still lacks a bit of "knowledge" parts of it, not that it doesn't talk about them but it talks about them in short terms instead of explaining them.

Nobody would really get hyped about this topic enough to write it but if you talked about all the risk management and what could be done you would probably write a 60 page novealla level book on the subject just to talk about how to use the proper functions at exchanges to lower your risk levels so I understand why nobody can, it doesn't worth it when there would be a total of 4 people who would read it, so what would the point. Excluding anyone doing that, I think next best thing is devilslayers comment.

Diluting your investment has always been a topic in investment but people forget that you should divide it into multiple sectors and not just multiple stuff in that sector. If you are 100% crypto, that doesn't mean that you could just have 100 coins and somehow you divided your money, or if you have 100 different stocks doesn't mean you are 100% dividing it. You literally have to put money into multiple different things to make up that difference.

Just to give an example, put it 20% on crypto, 30% on stocks, 20% on precious metals (gold/silver) and if you can even real estate if you can (doesn't matter if it is a small parcel in some god forsaken land just so it is cheap, because even that gains value), those type of diversification is important and not just diversification in one market.

It is important to gain experience but it does not mean the risks will reduce. Managing funds is one thing but going broke and not having enough bankroll to spend with checks is a tough thing. For any trader readily available cash is important too. They want to take every opportunity at making money but then again they need to keep bankroll in check. So it boils down to how much risk they are willing to take and how many trades then are executing.

You may play the long game and work with smaller portfolio with a big capital. That is good for most traders.

The good thing about trading is your own predictions. Although I cannot maximize the gains that I can from trading, I am properly minimizing the risk of big losses happening. So many predictions that are on the website and the channel (paid channel) makes us follow what they do, so we will never settle when they show the results of their profits. With its own predictions at least not add us into greed. Just enough to know where the trendline, support, resist, this is enough when we enter and when we take profit.

There is no way to avoid risk completely but you need to know how much risk is acceptable for you. By making due.dilligence and with learning, collecting as much information as you can and by diversifying your portfolio you can minimize the risk. But we always prepared to losses.

Avoiding risk in trading is impossible due to unsteady value of coins but it can be manage by making undertand all thing about it have strategy ang manually checking of market. Decision making is also helpful to trader because they need to learn when its better to  hold or to trade it especially when the market is dump and dump.

Yes, decision making is another very important capability that some traders don't have. Especialy making decision under pressure and not to turn to panic and making decision fast and deficit. But that is also something that could be learned with time and comes with experience. So someone who doesn't know the market and how it's functioning and how to see a broader picture, who hasn't experienced loss usually doesn't know how to make right decision.

To minimize the risk you should have enough knowledge about trading because when youre in the situation you will know what the right thing to do, but since some of traders choose to do overtrade because they want to take the opportunity to trade even they also lose a lot they still continue to trade. Although tthey win sometime but still the risk is always take over particularly without discipline in trading.

Perhaps, if they know about how much they should use to trade and always follow their own rule, it will help them to reduce the risk. The risk will still there in trading, but the problem is sometimes we break our rule because we want to chase bigger profit. That will not be good if the market cannot move up and down so we can miss the chance to buy low and sell high. So far, the market still up and down, but in a few weeks, it seems the market still going down, and we don't know when it's over. But if we can manage the money, we don't have to afraid to face the risk because we know how to deal with that risk.

In short you must know the coin or token you want to trade since if you do a random buys in the market then a chance for you to lose if you are not attended and we must be prepared when going to trade since the information regarding on the coin we want to accumulate is really helpful for us to earn on long term also in short term trades.

Investing in altcoins is a very risky activity, no matter how it correlates to bitcoin. Things can change in an instant. I would advise you to learn more about technical analysis, as the market is a game on the probability of price movements. The market is controlled by a crowd, which is more focused on technical analysis, and the crowd is controlled by major players of this market.

It mostly works the other way around

We can identify our stance (long or short term) based on actual strategies and approaches we use. This is what counts in the end, while the specific type of trader that we drift to is of no particular importance. We can be actively trading one coin in the short term, while passively holding another for the long term


Diversification is meaningless with crypto. If you want to reduce risks (as this is what diversification essentially comes down to), simply buy Bitcoin and forget about altcoins

That is a problem that many of the newbies will face because they see a lot of people profiting and they want to do the same but they do not realize that they can't make the same amount of profit or even same amount of % profit with the veterans of the market, those people have given months or possibly years to the market to figure out how things work, some of them came in here from years of forex trading experience and also gave years of experience to crypto and now they are good and it is normal that they may do stuff that looks like risky and people do not realize they are very risky because they are new and think that is normal but in reality those risks are less risky when you are a professional who became veteran of the market. That is really the dangerous spot.

Diversification is still quite important if you want to minimize the risk while also trying to make more money as well. I understand that you want as little risk as possible and that is definitely just buying bitcoin and holding but at the same time we are talking about missing out from the big increases from all others and when you minimize the risk so much that you are missing out the profits, that is not good at all neither.

So, I suggest everyone to actually diversify their portfolio into the top 10 minus some bad ones and you can actually have a bigger increase as well (or a bigger fall of course) in order to both minimize the risk versus people who buy very very tiny volume coins outside of top 100 but also still have some chance of profitability.

Very well said. There's no way we can remove the risk upon our trade but what we can do is to reduce it. I like the idea of having a plan before make a trade, this can everything on our trade because if we have it there's no way that we can lose to our trading track.

Diversifying indeed was one of the best strategy to reduce the risk, I think it is not necessary to be positive or negative correlated with each other because stock market is different from the crypto market we know. Now in choosing where tokens to invest, top ranked coins would be perfectly fit to place your investment, don't think of investing in random coins coz that will only increase the risk exposure of your funds.

We can minimize the risk if we try other coins to trade not only the top 10 you can try the other altcoins and you can trade it to make profit. Bitcoin is not good for everyday trade bitcoin can hold it in a long time. But many altcoins are good to be trade just do search and trade it so that every trade you can not lose money instead you gonna get profit on it.

That’s not going to minimize the risk you’re going to be taking in trading. I don’t even trust diversification in cryptocurrency, you’re buying a lot of altcoins that might not be making any sense later on. They might make your profit but a fall in the market will cause you loss that is much bigger than the profit you have made.

I would say that it is best for you to be stick to your long term investment maybe with bitcoin. Unless you’re going to be trading the top coins, like the top ten? I have seen people that tried diversification and invested in coins that are not even in the top hundred because they believed they are good but at the end they were disappointed.

Are you sure about that?

Because I'm not at all. As I see it and as all my trading experience tells me, adding more altcoins actually increases your risks, not reduces them. If Bitcoin is the top cryptocurrency in terms of reliability, adding anything to your portfolio less reliable than Bitcoin would only make it weaker, less resilient, robust and stable

You will be opening yourself up to more risks, which are inherent to altcoins. If anything, altcoins should be used as a profit generating device (if you are able to time the market), not as a hedge

People do really have that mindset on diversifying is always a best option and doesnt only stick on one basket.You do got the point though about opening yourself
into various risk because of choosing alts but it doesnt always mean that they arent capable on reducing the risk but you should stick to those established or high ranking
ones rather than considering on some shitcoins and hoping for some pump.Each trader do have its own way on reducing risk it might be appealing to others but as said you cant
please anyone. ;)

This is definitely not about pleasing anyone

Since risks, or rather risk assessment, is more or less objective. To make a long story short, you can't reduce risk by choosing something which is more risky and highly correlated with what you already have. You will only be adding more exposure, and thus your overall risk level will go up

Diversification for the sake of reducing risks is about minimizing total risk by adding negatively correlated assets to your portfolio (e.g. gold and stocks). But this has a nasty side effect of reducing your profit potential since the assets are negatively correlated (i.e. when one rises the other necessarily goes down)

The number one factor that is going to irrevocably minimise your risk is first of all knowing when to trade, that comes at the back of keeping up to date with the market. The second factor is using an exchange platform that you trust and can gain support if needed, and of course the last one is knowing yourself and only trade when you're confident enough and not just because you can't stop but trade even at times of market doubts.

All of these, plus others not listed here, are instrumental to gaining profit from trading, and I know they sound basic but sometimes you need to go back to the basics to avoid damages.

Knowing ourselves capability is one way to determine if trading would be a place in the right place to stay. Many people had come to trading without knowledge but in a certain thing, they will able to survive because they adopt the environment and most likely they learn faster than of the others. They'll find easier to adopt the system because they also know how to manage their emotions and face the risk.

There is no way to minimize the risk in trading (IMO) and it is not escapable. The only thing to do in order to not being hit to big losses is to maintain the calmness of our mind and don't even bothered so hard when we saw a declining sentiment in the market.

Personally, I only invest some potential coins because those are very good coins for a long term profit. I always spend a lot of time trading because this is the only place I can make money and any of my decisions will directly affect the current profit. In addition, I only participate in projects that I think can bring me a profit because those coins are still new and investors are not really interested.

It depends on the effect of your plans especially in the worst situations ( big dump ). In addition to that, it is better to focus on the best cryptocurrencies in the market ( TOP 20 ) that's one of ways to minimilize the risk I would guess. Unfortunately, the market is full of shitty altcoins, try to ignore all of them otherwise, you will lose your budget on them, maybe some of them are a bit profitable  in day trading but the opposite is true in a medium and long term.

Pretty much it but you can also try to, divide your asset and maximize your trades doing it. What I mean by this is you should do long term trading and scalping, both of those are effective way to get profit from trading and that's a good way also to minimize your risk. And if you are a beginner trader, avoid the leverage trading! that is for pro only, considering that it can wipe out your whole balance and you might lose all of your money in just one wrong move. Leverage trading is high risk, high reward kind of trading, so I highly suggest to stay out of it if you are just new here.

In fact, the crypto market is heavily dependent on the value of Bitcoin and it is not always possible that the coin will be stable to help you make a profit during this time. I guess instead of choosing to invest in the top 20 CMC, you should find some new projects that have just appeared this year because this is the option that will help you to make more profits than the old coins.

It seems to me that the first thing that happens on the cryptocurrency market is the release of many national cryptocurrencies, which will be supported by the national currency and after that many states will gradually legalize cryptocurrencies.  Of course, first of all, we are talking about stable coins, but I would really like them to be created on the erc20 platform.  In this regard, I really hope for the development of Ethereum and its huge potential.

Noticeably the price of the altcoins are high whenever bitcoin is increasing however that isn't the point of being dependent if altcoins. Altcoins are dependent in a way that if bitcoin could lose its potential and reputation, the market could go zero again or worst to be born again. 20 coins in the cmc won't matter, there are hundreds of coins that has its own potential that only needs a time to grow and be popular.

Not all things would be on correlation just what most people do think off but we cant really deny the fact that the entire
 market does really being dragged down when bitcoins price tends to go down or simply if the market is on heavy bearish.
Its true that there are some alts that do stand on their own in spite of btc price which does simply means it doesnt correlate
from time to time because they do able to make or move its own path without relying on the main crypto that we've known.

Minimizing risks in trading  may seem impossible since risk is a natural occurring factor  it will be hard trying to minimize risk in trading as far as I know what I think will help would be simply trade with the amount you can afford to lose this doesn't mean a huge amount  start off with little at first and see how the market structure is but truly there are no sure ways to minimize risks in trading that I know for sure

There are people who diversify their investments with different assets/coins to minimize their risks of losing money, but sometimes it can be really disappointing, especially with altcoins. Altcoins can make you lose your money more than Bitcoin will make you.

The volatility with altcoins is usually worst. They do go up when the price of Bitcoin is going up and when Bitcoin crashes theirs is always more than Bitcoin. But you can still try diversification, but don’t be like those that buy lots of coins like twenty coins that they know nothing about. If you want to trade you should only trade few coins that you know very well.

I personally always consider long-term investments in the highest-rated cryptocurrencies, but I use for daily trading those moments that have a rating below the first Top ten coin market.  I understand that I am in a risk zone, because I am dealing with cryptocurrencies that are in a risk zone, a decrease in liquidity.  Of course, I constantly monitor trading volumes, but for some reason it seems to me that this is the main problem that I and the same traders who do not have enough experience can encounter.
Based on this, I believe that it is always necessary to minimize the risks of a decrease in liquidity by choosing more reliable coins for trading, and you should also begin to pay attention to the regulatory framework of certain countries whose coins you are trying to trade.  The fact is that cryptocurrency is becoming more popular and states are beginning to more closely regulate the turnover of cryptocurrencies and this, in turn, can greatly affect the pricing of certain cryptocurrencies.

Trading is often uncertain and everything here is very much dependent on the volatility of the market. In fact, the risk is inevitable when you enter this market, but to limit those risks, you need to have the knowledge and reasonable strategies to avoid losing money when trading. No one is born a good trader and if you want to be an expert then you have certainly experienced a lot of difficulties in the past.