Crypto Strategy

[evdokimo]

Ladies and gentlemen,

I am currently trying to set up and asset management strategy for my crypto currencies.
I hope to find some experienced people who might want to share their way which works for them for inspiration and learning.


Asset management example:

100% investment seperated into the following risk areas:

1) safety = "solid" hodl @ 50% of total investment (only very trusted and established projects with examples like: BTC, ETH, LTC,...)
2) low-medium risk = "mobile" long term trading, lending @ 30,9% of total investment
3) high risk = "aggressive" ICOs, unpopular altcoins, trading - buying underpriced / bleeding altcoins @ 19,1% of total investment

Each area in itself spreads the investment into different projects, depending on your preference / trust to avoid an "all in" situation in any of the 3 risk areas.

-This system transfers wealth from area 3 & 2 towards area 1, the safe pot, where you accumulate crypto wealth.
-You are not allowed to "refill" losses from area 2 or 3, you are forced to manage each area to gain profits with its own more detailed strategy.
-Profits from areas 2 & 3 are redestributed among the entire investment, while area 1 keeps beeing fat and greedy, sharing nothing for safety.
-Area 1 can cash out 10% after a gain of at least 20-35% for buying stuff (land, house,...), which prevents you from cashing out more than it actually accumulated.

This system works, if you have a working profit strategy, simply YOLO-ing will not be of much success.

This system works like a tree, spreading into finer parts of asset - risk management, where we have 3 main branches which follow a different strategy.
If you like, you can use the same system on each branch again as a pattern which repeats itself, like the branches of a tree do.

This diversification of your asset gives you the advantage of damage prevention from risk while also allowing for some profits to be achieved.

Ideally you even seperate these 3 branches into different wallets and keep them apart. This way you also see quickly, if your strategy in the risky branches 2 & 3 does or doesn't work.
You are forced to make profit with branches 2 & 3 to "keep them alive" and be able to redistribute the newly accumulated wealth.

Since all people are unique, you might want to change the %-amount of each of the 3 areas. The only way which makes sense to me is to increase the percentage of the safer branches and put less investment into area 3 or even area 2, which means to take even less risks, because I consider this strategy example as pretty aggressive and greedy imho.

Let me know if you have any ideas for improvement or if this helped you!

evdokimo

[blindminer]

You have figured out a solid strategy that spreads the risks out evenly instead of just following your instincts. I noticed few people are having a real plan like that and follow their gut feeling instead. Most people I talk to are either only doing ICOs or only focussing on the high cap coins. If I was you I would add a 4th bucket to that strategy, for instance mining. Either buying equipment or through a cloud mining contract. These have not been very profitable recently but it‘s a steady, passive income and reduces your risks even further.

[evdokimo]

I personally left mining out simply because it is only really viable during a bull run. I tried cloud mining and I also check the mining efficiency and found out, that this has not really been a good idea for a while now.

If it is such an occasional income, which in worst case keeps mining only dust because it is cheaper to save the electricity and invest the money directly into the coins, while having an insane competition AND a lot of trouble in technical terms, if you consider mining with your own hardware. having the choice for a contract which robs you any flexibility is not a trustful investment option for me either.

Any way you take it, scaling profits is only easy with cloud mining, if the contract makes profits. Doing it with hardware yourself takes true dedication and creates a lot more problems to take care of. Heat, noise, theft, heat, electricity bill (look at german prices, you will understand...), maintenance of hard- & software and did I mention heat? Like 80 °C per GPU? 24/7?

Since cloud mining is not flexible, you can not even change the coin you mine and you have to pay some well earning people, I can not see it being a way for me to take a risk and invest.

The real advantage of having your own mining power which you can flexibly use is pre mining coins before they hit the market and selling on the first pump. There is no cloud mining company except nice hash (which was not making any profits forever) where you possibly could use your investment on arising opportunities - rather it is locked and useless in worst case doing no profits at all.

Having your own farm is only viable in countries with extremely cheap electricity and cold weather. Germany as an example is completely useless to set up your mining rig, because poland is 3x cheaper on electricity and right next to it.


From my life experience flexibility means survival. It also means mobility, the possibility to act to changing conditions. Simply buying an altcoin or selling it again is a way lower hassle than the mining business.
I believe we all are looking for less stressful ways of income. This is the reason why I left out mining from my strategy. It was located in the draft in area 2, but i deleted it.

Thank you for your advice, blindminer!

Maybe you can prove me wrong with some numbers, though I would accept the philosophical and moral aspect of supporting the network by dedicating a part of your investment into the process of mining.

At the other hand why increase the difficulty by investing even more into mining? It consumes so much energy already, that I believe it is not viable at all to stay with the proof of work concept, since BTC needs more power than Denmark already!

If I am honest, this issue is also starting to affect my choice of coins I am looking at to put my money in, the ideas I personally love to support.

[galahads]

you can buy some altcoin i am sure if hold in next few month i am sure you can get a good profit from this altcoin

[Hughesy26]

Great post! A couple of comments;

1 - I do similar but I have a 4th category for 'reward coins', like masternode coins, staking coins or (some) exchange tokens. The rewards I get from these I convert to safe coins until I get back my inital investment, and then any further gains I feel happy to put into the risky coin bucket.

2 - I'd be warey to think of anything other than BTC has a safe coin. For example, if/when LN goes mainstream I really do not see the point of LTC. ETH is in a stronger position but it needs to fix its scaling before too long. It's main demand has been for ICOs but these have gone out of fashion lately with the high profile frauds/poor returns, and its use case for dapps is really limited to crypto kitties. I personally think EOS, and to a lesser extent NEO, and the many other platform coins will erode ETHs #2 position. BTC on the otherhand is completely safe as #1 IMO

[wxa7115]

Ladies and gentlemen,

I am currently trying to set up and asset management strategy for my crypto currencies.
I hope to find some experienced people who might want to share their way which works for them for inspiration and learning.


Asset management example:

100% investment seperated into the following risk areas:

1) safety = "solid" hodl @ 50% of total investment (only very trusted and established projects with examples like: BTC, ETH, LTC,...)
2) low-medium risk = "mobile" long term trading, lending @ 30,9% of total investment
3) high risk = "aggressive" ICOs, unpopular altcoins, trading - buying underpriced / bleeding altcoins @ 19,1% of total investment

Each area in itself spreads the investment into different projects, depending on your preference / trust to avoid an "all in" situation in any of the 3 risk areas.

-This system transfers wealth from area 3 & 2 towards area 1, the safe pot, where you accumulate crypto wealth.
-You are not allowed to "refill" losses from area 2 or 3, you are forced to manage each area to gain profits with its own more detailed strategy.
-Profits from areas 2 & 3 are redestributed among the entire investment, while area 1 keeps beeing fat and greedy, sharing nothing for safety.
-Area 1 can cash out 10% after a gain of at least 20-35% for buying stuff (land, house,...), which prevents you from cashing out more than it actually accumulated.

This system works, if you have a working profit strategy, simply YOLO-ing will not be of much success.

This system works like a tree, spreading into finer parts of asset - risk management, where we have 3 main branches which follow a different strategy.
If you like, you can use the same system on each branch again as a pattern which repeats itself, like the branches of a tree do.

This diversification of your asset gives you the advantage of damage prevention from risk while also allowing for some profits to be achieved.

Ideally you even seperate these 3 branches into different wallets and keep them apart. This way you also see quickly, if your strategy in the risky branches 2 & 3 does or doesn't work.
You are forced to make profit with branches 2 & 3 to "keep them alive" and be able to redistribute the newly accumulated wealth.

Since all people are unique, you might want to change the %-amount of each of the 3 areas. The only way which makes sense to me is to increase the percentage of the safer branches and put less investment into area 3 or even area 2, which means to take even less risks, because I consider this strategy example as pretty aggressive and greedy imho.

Let me know if you have any ideas for improvement or if this helped you!

evdokimo

Your strategy is good and it is similar to my own however I would argue that there is not medium risk coins in which you can invest, there are solid coins and there are risky coins with nothing in the middle, what I personally use is a 90%/10% distribution, 90% is invested in very safe coins and almost all of it is invested in bitcoin, some may argue that it is better to invest in other coins as well but since bitcoin is the only coin I'm sure is going to be widely adopted in the future then I do not see the point of diversification, the rest 10% is invested in icos in which I invested some time ago and if for some reason my investments fail I will no longer waste my time investing in icos.

[passwordnow]

Take care of ICOs that you are about to invest.

Holding is the most solid way of investing and while you're holding do the recommendation of trading. There's no harm with those two but it's also risky and take the risk if you are ready to do.

[efey39]

The strategy for investors in the world of digital currencies is very important. Any investment you make at a low price can save you money if you show patience. it can be very successful as an extra to find ico very important money.

[Hughesy26]

wxa7115 - wow you are a safe player!

Personally I am too greedy to only have 10% of my coins in higher growth potential coins. As I only invest what I can afford to lose, and reinvest some of my profits (so I am very relaxed about the price of these investments dipping) my risk appetite is higher I guess

The best thing though is to have a strategy and stick to it. People can disagree with the exact percentages all day but the strategy itself is sound

[bitcoin2048]

Those are great explanation of the most common ways to leave here and performing on a cryptocurrencies market, but it is totally depending on every personality of human being that is involved.

[oriontab]

I kind of avoid the daily hassle of day trading or short term investment,I spent much on my cash building a portfolio with well established coins for long term.

[cryptobae10]

Those are great explanation of the most common ways to leave here and performing on a cryptocurrencies market, but it is totally depending on every personality of human being that is involved.

Different personality of man is one reason why everyone needs to find out and figure out their strategy themselves

You need to be sure what strategy work for you, keeps you in line and ensures your profit
Those factors are important

[blokceyin]

I really like your logic. Great one! I will try it myself with different % amount of each of the 3 areas.

Thanks for sharing and good luck.

[iamsk]

Your strategy is awesome thanks for sharing this post. I will definitely try this strategy to gain profit on this market.

[marchebuk]

these strategies give a general idea of the possible types of game on the stock exchange. However, with such strategies, you can not expect much profit, especially if you use 1 strategy - to invest 50% of your money in popular crypto-currencies.

[tuanphuong666]

I would like to contribute one more comment:
The most basic feature of the crypto market is volatility. The price of Bitcoin or any other currency could increase by 20% in a matter of hours and also easily decrease by 20% in the next few hours. Some traders use this volatility to try to make a profit. One such strategy is called swing trading.

Swing trading involves individuals keeping cryptocurrency for a certain period of time, usually a few days or weeks. After that, Swing traders will try to determine the general trend of holding money, performing transactions based on its overall upward or downward trend. The success of this strategy largely depends on the ability of an individual to determine the time it takes to market - a very difficult task because the market fluctuates very strongly. Thus, the swing transaction is definitely a In the business strategy is quite risky.

In short, the crypto market is a difficult environment to navigate. Its fluctuations may be an opportunity for the person to make a profit, but it can cost the other person everything. Regardless of the strategy that players use, they must admit the risks associated with trading in this market. So, it is important not to invest more and then be ready to take a deep study before making any transaction.

[evdokimo]

I thank you all for this appreciation!

It is my first raw concept and I thought I share it with the forum.

So far my strategy was to simply fatten my portfolio by buying since autumn last year. I went hodling through all the highs and depths to get a feeling for cryptos and the psychological effects it has on me.

Now I am starting to go to the next level by creating an asset management strategy which I can agree upon.

The next step would be technical analysis and alle the details about trading. I have had some theory, but I want to get in touch with some swing trading actually (thank you for teaching me the word, tuanphuong666!).

It should help me to understand the market better, though I was able to invest into the nice dips even without any analysis. I simply started to become more patient with buying and waited for the markets to bleed painfully...
If you might ask yourself, yes, I know FOMO very well and learned it the hard way as a hodler, luckily though I didn't go in too much early 2018.

I am actually looking for some useful tutorials or courses, I don't mind to invest. I am only interested in quality material because I wish to go deep.
Maybe I should start a new Topic for that one...

[gorkin0606]

I believe that the best strategy is to buy the top five or top 10 cryptocurrencies, and just wait for the growth of the entire market.

[suhano]

I think more people have to figure out a strategy. Especially when you just hold on to whatever project then you are missing out due to the high volatility. I did the same mistake as many others, made some good gains with low caps toward the end of 2017 but then list all these gains again in the course of 2018. If I had followed a strategy like the thread opener mentioned I would be far better of now.

[Jiyens3]

Those are great explanation of the most common ways to leave here and performing on a cryptocurrencies market, but it is totally depending on every personality of human being that is involved.

Different personality of man is one reason why everyone needs to find out and figure out their strategy themselves

You need to be sure what strategy work for you, keeps you in line and ensures your profit
Those factors are important

on Cryptocurrency using trading strategies will greatly help to develop substantial gains in the future. so it would be great to use this strategy to bring substantial profits in the future. so as to be able to generate substantial profits in the future and become a mainstay to generate far greater profits in the future.