TOP 10 Crypto world Ground rules!
By: Clos Belmont
Tags: Cryptocurrency Investment, Cryptocurrency, Crypto, Bitcoin, Blockchain

2018 is set to be *the* year for crypto.

Bitcoin exploded last year from $1,000 to $18,922.78 (1,289%), then it dipped back down to around $10,000. Ethereum entered the year with $7.18 and shot up to $808 just days before Christmas.

Some countries and their Banks made their moves to accept crypto as a currency, for example Israel is planning to launch a national cryptocurrency and Bank of America filed a patent for a cryptocurrency exchange which allows people to trade fiat for crypto coins.

Few big serious organizations and companies stepped on the “crypto path”: Virgin Galactic accepts Bitcoins for a space riding. A Japanese firm is now paying its employees in Bitcoin if they wish. Even Microsoft, Dell and Expedia accept Bitcoins as payment.

Reading this news more and more people become interesting in this mysterious and attractive crypto world.

If you landed on this text, you might be already interested in investing in cryptocurrencies.

But how not to get lost in it? And how not to loose all your money in beckoning cryptoworld?

To receive answers to the most urgent questions about investing in cryptocurrencies — Read our short guide.

So, how we can avoid mistakes in trading? The following tips will help you to understand trading better. However, it’s still difficult to apply them in real-time.

1. The golden rule is to invest as much that you can keep on living and be if all of it goes to zero. There are definitely riskier investors out there who take a $15,000 loan and dump it all into cryptocurrency and that may be okay for them; however, best practices typically state that you should only invest what you can afford to lose.

2. Diversify your portfolio! If you put all your eggs in one basket, you have no chance to recover any losses if that one investment tanks.

If you want to have a balanced portfolio at the same time, it might be a good strategy to simply reflect on the ten most valuable currencies in your portfolio. It is more interesting, however, to take some time, read about those coins, decide if their vision hooks you and make this strategy a basic one for asset selections.

If you buy altcoins, there are some rules to discriminate the good from the bad. Good coins have a transparent technical vision, an active development team, and a vivid, enthusiastic community. Bad coins promote technical advantages without explaining how to reach them, and have a community that is mostly focused on getting rich. Beware of them!

BitcoinTalk.org, CoinDesk, CoinTelegrapgh and Reddit are some good sources for finding cryptos to invest in. You need to find the Slack and Telegram channels for those coins since that’s where most of the discussion about the coin takes place in and the information that you find there will be invaluable.

3. There is no general rule when to buy cryptocurrencies. Usually it is not a good idea to buy at the peak and it is also not a good idea to buy it when it is crashing. “Never catch a falling knife”, as the trader’s wisdom says. Best time might be when the price is stable at a relatively low level.

Take some time to watch. Don’t buy in, because there was a dip. There might be another. And don’t buy in, because you fear that it will explode tomorrow. Watch it, get yourself informed, and buy it, when you think the timing is good. And, maybe most important: don’t sell too early.

4. Target and stop when starting a trade: For each trade we must set a clear target level for taking profit and more importantly, a stop-loss level for cutting losses. A Stop-loss is setting the level of loss where the trade will get closed.

Here again, it is important considering a number of factors when choosing a stop loss level correctly.

5. Put your emotions outside the box and meet FOMO (fear of missing out). This step is probably the greatest barrier you will face when investing. You need to be prepared to see big swings in the cryptocurrency market, especially since many of these teams are essentially just start ups with no history of success. You’ll also see swings tied to general news about the overall market, and definitely from any regulatory decisions against the use of cryptocurrency.

Remember, you do not lose anything until you decide to cash out. Next week, that same coin you invested in could be in a bull run & you’re up 80%.

6. The underlying asset creates volatile market conditions: Most Altcoins are traded according to the Bitcoin value. Bitcoin is a volatile asset (relative to FIAT) and this fact should be taken into consideration, especially in the days when the Bitcoin value is moving sharply. Bitcoin and Altcoins have an inverse relationship in their value, i.e. when the value of Bitcoin rises then Altcoins are losing their Bitcoin value, and vice versa. When Bitcoin is volatile, conditions for trading are kind of foggy. During fog it is quite hard to see much ahead, so it is better to have close targets for the trades or not to trade at all.

7. Tips for trading Altcoins. Most Altcoins lose their value over time. They simply bleed their value away slowly (sometimes rapidly). What kind of Alts are recommended for the long term? The projects/coins that have a higher daily trading volume and are backed by a widespread community with continuous development are here to stay with us. You should follow the coin’s chart and identify low and stable periods.

The higher 24h volume reflects a more established coin with a solid base, at least one functioning exchange (where the volume comes from) and perceived value by the trading community. Try to choose a coin with at least 10,000 USD trading volume — it shows that the coin has already been traded and there’s a certain percentage of the network that believes in the coin.

And watch out for the so-called pump and dump schemes. They’re set up by developers who buy the currency in a large quantity, drive the price up and sell as soon as the currency reaches a peak. Eventually dropping the price significantly.

Current price is an indicator of a perceived value but not anything else. The price should never be the deciding factor behind the investment. The technical and future potential are the driving factors.

If you see a coin with low daily volume but high market capitalization, you are most likely seeing a speculations with that coin’s price.

If a developer is releasing a new cryptocoin, there should be a history behind that person. Nobody who’s brand new to the network will join with the new coin announcement. To come up with a successful idea behind cryptocurrency, it takes time. Hence, there should be a visible activity of a particular developer.

Here are a few things you should ask yourself about currency you choose:

1. What real-world problem is this coin trying to solve?

2. Will the coin be associated with a product, market place, or real use case?

3. Does the team behind the coin have the necessary experience (and even credibility) to pull off what they are claiming to do?

These are just some of the questions you should be asking yourself before deciding to invest in anything, but especially cryptocurrency.

8. Few words about ICOs: Many new projects choose to make a crowd-sale where they offer investors an early opportunity to buy a share of the project (tokens or coins) in what is meant to be a good price for the tokens. ICOs are the hottest kind of investments right now. If you invest in the projects which really have the potential to scale up the idea, it can give you enormous returns.

In recent years, there have been many successful ICOs, both the project itself and especially in measuring the yield for investors. Coins doubled, or tripled, their value and much more in relation to their value on the crowd sale.

But not all the projects benefit their investors. Many ICOs proved to be complete scams, not only were they not being traded at all but some projects disappeared with the money and we have not heard from them right up to this day.

So how do you know if you should invest in an ICO?

When choosing your long term investments it’s important to select projects that appear to have longevity in mind, not just with the product itself but those producing it.

Pay attention to the level of seriousness of the project and its team. Look for the project’s website. Who is the team? Expect to see a Slack gathering its community. And most importantly is risk management. Don’t invest too much of your portfolio in one ICO.

9. Be careful! Don’t fall for scam.

There are two things at the very center of every classic Ponzi scheme: an investment with (allegedly) a remarkably high return, and a story about just why the extraordinary returns can be so easily achieved. When any time of investment promises a guaranteed compounded monthly return, you can pretty much guarantee you are in trouble. So before you invest make research about the product and the company — do they seem reputable? Do they have history of success? Are they truly who they say they are?

Here are several signs you might be in a scheme:

1. You never receive any real collateral for your investment in crypto currency, just a promise that you will earn money back.

2. The guaranteed return of your investment is too good to be true.

3. You’re told a complicated yet convincing reason about why the returns are so strong.

10. A final tip — practical steps to implement right away:

- Multiple trade actions = More fees.

- Don’t start trading unless you have the optimal conditions to make the decision to start a trade and know when and how to get out of it.

- Always set your goals by putting sell orders.

- Do not keep your Cryptocurrencies on Exchanges — There is a long history of hacks and bankruptcies in crypto currency markets. Probably the case of Mt. Gox can be considered to be the most famous hack, which sucked up hundreds of millions of customer’s Dollars.

Conclusions

The cryptocurrency markets are a blazing, often confusing ecosystem, in which you find thousands of chances to win a lot of money — and to lose it. Every day gives birth to new coins and death to some old coins. Every day sees some coins heavily falling, and some vertically raising.

If you follow mentioned above rules, you will significantly reduce the investment risk. It will be time-consuming until you find information channels that work for you.

It is important to emphasize that perfect trading requires attention and total focus on the process. Let’s face it, trading is not for everyone.

So we strongly recommend you to rely on Clos Belmont’s trusted professionals. Our mission is to provide clients with optimal profit per risk ration in highly volatile digital asset market. We offer the services in capital trust management and capital distribution across digital assets using a structured diversification strategy consisting of various instruments of trading. Our team consists of experienced crypto currency traders and analytics. Diversification of assets due to distributing your funds through four sub funds will split your profits between the most perspective coins.

References

https://decentralize.today/an-investors-guide-to-cryptocurrencies-picking-the-winners-avoiding-the-losers-2b56fc0d1ab0

https://cryptopotato.com/8-must-read-tips-trading-bitcoin-altcoins/

https://hackernoon.com/keys-for-investing-in-cryptocurrency-9cc779eac8aa

https://hackernoon.com/learning-from-mt-gox-2-0-bitconnects-ponzi-scheme-and-how-to-protect-yourself-from-the-next-one-d33322afbfa3

https://blockgeeks.com/guides/how-to-invest-in-cryptocurrencies/

https://bitemycoin.com/getting-started/how-to-choose-cryptocurrency-to-invest/

https://medium.com/@retrometro/how-to-choose-the-right-altcoin-for-your-crypto-folio-b98effc23e9c