Take 5 minutes to read the thinking and instructions on investing coins correctly, scientifically and effectively to avoid losing money.
When you read this article, you already have an intention to invest in coins and want to learn the methods and forms. This article will help you with all the information on how to invest in coins from A - Z.
Should you invest in coins?
The goods and money we work for are stored in one of the following forms:
Type of goods produced, grown, or manufactured
Form of money (cash, account money)
Material form to serve needs (House, car, phone, etc.)
Yellow
CryptoCurrency (Coin)
Stock
Real estate
When comparing growth performance, cryptocurrencies consistently perform astonishingly high. For investors, it brings many times more profits than saving, investing in gold, stocks or real estate. Cryptocurrencies have increased in price thousands, even tens of thousands of times in a short time, attracting millions of global investors. Investing early in cryptocurrencies like BTC, ETH, Sol, BNB with a small amount can bring millions of dollars in profits.
"Cryptocurrency is one investment channel that you should not ignore. However, it is important to understand that investing does not mean putting all the money you have or borrow into cryptocurrency. Instead Instead, you should allocate a small portion of your money to buying cryptocurrency."
What are the risks of investing in coins?
First of all, you need to learn about the risks in coin investing. These can include:
Risk of fraudulent exchanges: Although this risk is not large, after 10 years of operation, only a few small exchanges have committed fraud and disappeared with users' money. However, most large and reputable exchanges still operate effectively. One way to avoid this risk is to store cryptocurrency directly in your personal wallet.
Risks of Investing in Untrusted Cryptocurrencies: With over 14,000 cryptocurrencies available on the market, there is a risk of investing in untrusted projects (also known as "drawing") and cause significant damage to your property. This can be minimized by doing thorough research or looking at reviews before starting to invest.
Risk of rapid perceived price fluctuations: The cryptocurrency market has very rapid perceived price fluctuations, even for major coins such as BTC, ETH, BNB. Prices can drop by several tens of percent in a day and be even higher in a few months. This is specific to the cryptocurrency market. To adapt to this volatility, use appropriate capital and ensure you have the ability to tolerate risk."
"The risks in coin investing can be easily overcome when you actually participate in professional investment, which is exactly 2 factors: Capital & knowledge before investing."
How profitable is coin investment?
When it comes to potential profits from investing in cryptocurrencies, there are no specific limits. Investing in cryptocurrency can bring superior profits compared to many other fields if calculated in terms of return ratio (ROI). We have seen cryptocurrencies increase in price by up to x5, x10, x100 and even x1000.
However, it is not possible to put all the money you have into cryptocurrency investments hoping for x100 profits. Given the risks mentioned previously and the specifics of each cryptocurrency, it is necessary to use the appropriate amount of capital. By calculating the potential profit and possible loss, investing in cryptocurrency can yield significant profit performance. Many people have earned tens of millions of dollars from cryptocurrency investments.
"The price to pay for high performance is also the risk of a very strong decline. Coins can lose 90-95% of their value, even 100% with "junk" coins. Remember that coins are an industry. high-risk and high-return investment"
How much coin should I invest?
There is no fixed amount like 1K$, 50 million or 200 million per person when investing in cryptocurrency. The amount should be calculated based on the following 4 factors:
Your total assets.
Your monthly income level.
Personal ambition.
Your investment strategy.
Higher values of the above factors will allow you to have a larger investment. A recommended ratio is less than 35% of overall total assets. However, in case your income is stable from business or your salary is high, you can increase the investment limit a bit. This may also be higher for young or single people.
After determining how much you can invest in cryptocurrency, you need to go on to determine how much you can allocate to each cryptocurrency in your portfolio.
"Portfolio management is the most important thing in coin investing. Portfolio management includes: What coin to buy and how much to buy"
Based on the risk level of each cryptocurrency, you can create a capital allocation plan. Most cryptocurrencies have a high rate of return (ROI) (x high account) which often comes with a high level of risk.
Absolutely do not invest the entire amount of 2 billion in cryptocurrency and hope to gain x100 profit to have 200 billion. Instead, you should invest only 25 million and assume that in case of x100 profit, you will have 2.5 billion. If your risk tolerance is higher, you can increase the investment amount to 100 million, but remember to never put all the money you have in it.
For safer cryptocurrencies like BTC or ETH, x100 profits are not easy but you can allocate larger capital levels, as they have the ability to reduce the level of risk in a worse case scenario. In addition, the chance of recovering and increasing prices again is also better.
Order of steps to invest in coins
To start investing in cryptocurrency, you can follow these steps:
Determine the total amount of capital you want to allocate to investing in cryptocurrency, based on your personal financial situation and the risk you are willing to accept.
Make a list of coins you want to invest in and evaluate their risk and profit potential.
Proceed to purchase these coins through an exchange or store them on your personal wallet. This requires you to master information about the currency and understand basic transaction operations on the exchange (such as registering an account, depositing money, buying and selling, etc.).
Monitor and adjust your investment plan according to market fluctuations and the latest information about the coins you invest in.
To perform the above steps, you need to have knowledge about the coins you want to invest in and also need to understand how to perform basic trading operations on the exchange to buy and sell coins (including registering an account). accounts, deposits, purchases, etc.).
Why do coin investors lose money?
There are two main reasons why cryptocurrency investors experience big losses, and they can be summarized as follows: failure to follow the process and lack of investment knowledge. Specifically:
Short-term trading without adequate investment knowledge and skills: A common mistake is when investors do not follow the investment process and easily get caught up in short-term trading, hoping to make money. Get quick profits. This requires a high level of investment knowledge and skills to be able to understand and analyze the market and make sound trading decisions. When this knowledge and skill is lacking, the risk of large losses increases.
Improper capital allocation and management: Another mistake is when investors do not allocate and manage capital appropriately. For example, investing all assets in currencies carries a very high level of risk. This can lead to huge losses if these currencies experience difficulty or a sudden drop in price. Improper capital management, greed and excessive greed are also another reason why investors suffer huge losses.
For men, they often tend to be impatient and easily get caught up in short-term trading, leading to failure in the first way. Meanwhile, women often make the second mistake due to greed and poor self-control.
What determines the success of coin investment?
Type of coin you invest in: Choosing the right coin with good potential and foundation is an important factor. This requires mastering information and careful research about the project, technology, development team and future prospects of that coin.
Reasonable amount of capital: Determining the amount of capital you are willing to invest in coins in a reasonable way is very important. Do not invest an amount larger than your financial ability to bear. This helps you reduce risk and maintain patience during the investment process.
Final sale price: When you decide to sell your coins, the final sale price has a big impact on the investment results. This requires you to have the knowledge and ability to evaluate the market to choose the right time to sell coins and make a profit.
Big market trends: Analyzing big market trends is an important factor in making investment decisions. Grasping the upward or downward price trend of the coin market can help you make reasonable buying and selling decisions and increase the likelihood of investment success.
All of the above factors are relatively important and have a simultaneous impact on the success of coin investment. Missing any one of these factors can increase your risk and likelihood of failure. However, there are also some special cases who, thanks to their personality or circumstances, can overcome the above factors and achieve success in coin investing.
(Synthetic Aliniex)
