So you are starting out your crypto journey eeh! looking to build your portfolio. Well I am assuming you must have known the basics of crypto and you are set to enter into personal portfolio management. The studies of crypto portfolio management is very important as a crypto trader who want to make a real business from crypto trading. you should understand that the journey isn't for a day. So I will guide you into managing your portfolio with simple steps where you will see your crypto portfolio grow into millions {it doesn't happy in a day dude, don't expect miracles} of dollars, if you begin with a good and considerable amount. Note; with these steps/strategies, it's possible to begin with the little you have, but for a good and maximum outcome, it's advisable to begin with a good or considerable amount.
having said that, managing crypto portfolio is not without risk, you should be prepared for any possible outcome and develop strategies to manage your risk.
What's crypto portfolio management ?
Well this question doesn't require cracking of brains and biting your thumb drooling down like a lunatic. Crypto portfolio management is a process where your crypto assets are well selected and manage with proper risk assessment to the interest of increasing your portfolio PNL. One think people fail to know when coming into crypto is that; they feel its a hit and run kind of game, the mindset of crazy gamblers. And so when ever they realized little profits, they always have two things recorded on their mind;
1] they feel the market will continue that way forever; unfortunately No! The market returns and takes them back to entry level or even go lower. So they lose their initial profits they were supposed to make.
2} They feel crypto is a boom and crash kind of game and so they sell out all their hodlings too quickly before the real moves ever begins, leaving lots of money on the table.
How do I know these ? yes! because have once been there, that's number one {1] and number two {2}; I have mentored groups of beginners and I observed that almost all the new crypto coiners tend to behave the same way when starting out.
DAMM! DAMM! DAMM! GO STRAIGHT TO THE POINT!
Okay! right here, I understand your hears are inching, and you becoming more anxious. Now this is it; building crypto portfolio doesn't need to be complicated and confusing. The first step you have to take is;
1} Master technical analysis. very important kind of aspect for portfolio management. Without which, you will be frustrated with your market analysis by following random analysis made by some random guys on social media so called crypto Gurus. That's isn't the way there. take your time to learn technical analysis which will guide most of the decisions you will be making.
2} determine whether you want your portfolio to be high risk, medium risk or low risk portfolio. This most of the time is determine by your risk tolerance.
assuming you had a $1,000 worth of portfolio, you will need to deploy the funds into 4 different asset class, of which a high risk portfolio will be; 50% into low cap, 30% into medium cap, 10% into high cap and 10% into stables. This kind of portfolio could be highly rewarding, but very risky.
So a medium risk kind of portfolio would be 30% into low cap 30% into medium cap 30% into high cap and 10% in stables. this kind of portfolio is always very rewarding also and little less risky.
Now a low risk portfolio would be 50% into high cap, 20% into medium cap, 10% into low cap and 20% into Stables. This kind of portfolio usually is not as rewarding as high risk and medium risk kind of portfolio. However, none are without risk.
Now, while you might be reasoning how to generate profits and to increase your portfolio net PNL, there are proven strategies you will follow, which includes, finding assets that has good market records, and only buy at a discounted price { buy only when market is over sold, with proven indicators pointing to the end of the market bottom} buy asset that has good market records and avoid taking unnecessary risk. Take some of your stables, and invest them into promising yield investment; depending on platforms or exchange you are using, some platform offers 10% returns on stables, you can maximize this opportunity also to increase your portfolio PNL. Again, never buy at the market top. You will need patience and discipline to keep to this. Buy only when the market is at a discount according to your analysis. in the a case where you are in profits or in the money, {that's maybe a particular crypto asset you are hodling is in the money or in a good profits} never sell out all of the asset, at most sell 70% and hodle 30% while you wait to buy back at a discount. You can also consider moving some of your stables into trading derivative contracts likes futures to maximize your net PNL, however, this will require an extensive market knowledge, because this kind of contract carries high risk and there are possibilities to lose most of your money if not all.
CONCLUSION
Crypto portfolio management is very important for every crypto trader to learn, understand and master. If you ever want to take your crypto business to another level, it's very important. Having said that, understand that this piece is provided for educational purposes only and doesn't include any investment advice. Like I usually say; always do your own research. Thanks for stopping by.
