How to create a portfolio of cryptocurrency in a falling rate? Wait for bitcoin for 3000?

The cryptocurrency market is falling. But this decline, as it began in December, continues, and therefore the continuation of the downward trend and after reaching the $ 5,000 mark did not become too big a surprise. Although there were certain expectations that the “bottom” of Bitcoin would be in the area of ​​this mark, since approximately in this price range the average mining cost of 1 Bitcoin. But the market owes nothing to anyone, and catching a U-turn (thinking that it is now the end of the trend and it will turn around) is an extremely dangerous undertaking. Many have lost their capital by playing this game of chance – the search for a turn. But if you work in the market, the excitement will only hinder you (we will exclude some isolated cases where the luck / chance factor worked).

Hold cryptoactives or sell – this issue every trader or investor must decide for themselves before opening a transaction. Because in order to “correctly” open a deal, you need to answer a few questions. To begin to decide who you are – a long-term investor or a trader who trades in a relatively short-term? Determine the level of entry and exit from the position, both with a favorable development of the situation, and in the situation when your forecast was not justified. At the same time, it is necessary to determine the size of the profit or loss in such a way as to remain in the plus in the distance.

In most cases, using 1 to 3, or 1 to four, that is, the profit from the transaction should not exceed a loss of at least three or four times. Thus, with a 30 percent probability of the forecast triggering, the losses will overlap. The amount of capital: in a single transaction, it is not worth risking a capital of more than 2 percent. A similar figure, even in the case of a series of failures, will allow you to stay afloat with sufficient capital. And many lost everything in one or two deals! Psychology plays a great role in trading – a loss of only 2 percent of capital will not greatly affect psychological stability.

Hold, sell or buy depends on the strategy of each trader. Moreover, there can be quite profitable strategies that at one point in time will give conflicting signals.

New trend – 3000 dollars for bitcoin

Trend is your friend. The next strong level down is around $ 3,000 for Bitcoin and there is no reason to think that the trend has changed. If you are a short-term trader, then it is possible to look for a good point to enter a short position (sell position). If you do not have the opportunity to constantly monitor the market, and there is no desire to understand the intricacies of the analysis, but still you want to keep some funds in cryptocurrency, and believe (I believe) that cryptocurrency will come into general use one way or another, and accordingly the price will increase in the distant or not very perspective, you can buy.

To align the portfolio (it may be more relevant to be Ripple or EOS or some other cryptocurrency) you can buy not only Bitcoin, but in equal parts TOP-10 among the cryptocurrency or TOP-20 of the market to create an index portfolio, once a month rebalancing. Thus, you will have in your portfolio all the major relevant currencies, and once a month you monitor its relevance. All the markets are somehow growing (the law of the universe, you can see the charts of the markets for decades or centuries), so in the year or two, such a portfolio with a very high probability will be in the black.

Mr. Warren Buffett gives such advice and gives (for those who do not want to bother) – invest in index funds! In any case, it must be understood that cryptocurrencies are an extremely risky asset, and in addition to trade and price risks, there are also risks of a technical nature, legislative, fraudulent. Therefore, it is worth investing in a crypt only such a part of the funds, the loss of which during an unfavorable development of affairs will not cause severe damage to your budget. Remember  the  2 percent rule  ! 

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