Cryptocurrency Strategies (Buy & Sell) – Whether cryptocurrency, currency trading, stocks, commodities or precious metals, these 3 strategies will help you understand the basic stock market game. I have developed these 3 strategies so that beginners and beginners understand the mechanisms in a short and crisp way. Since I grew up with Bitcoin rather than stocks, here in particular a strong reference to digital currencies. However, the mechanisms or strategies are the same for these 5 investment types: cryptocurrency, currency trading, stocks, commodities or precious metals. I would exclude ETFs and index funds here, as the risks and price fluctuations are significantly lower here. How can you invest in cryptocurrency? Investment Strategies
For beginners and beginners, I would summarize the exchange in general and digital currency in particular, as follows:
Reading tip: With which app do I buy and sell shares, cryptocurrency & Co.? Here’s the answer! My recommendation: Trading App. Trading has never been so easy!
Buy from 1 Euro with these apps:
Download (Android + iOS): eToro
And a little tip, Made in Germany:
Download (Android + iOS) Trade Republic
For the full check: The best trading apps. Strategy 1: Well-known brands, long-term retention
Strategy 1 is simple and the “safest” form of investment on the stock market. Rely on known values. The easiest way to do this is through ETFs (index funds). These bundle several values from one area. For example, the DAX, which includes the largest German listed companies. If you invest your money here, you will spread your capital among various companies from Germany. This minimizes your risk.
But you could also buy stocks yourself that have had long-term success. Classics from the DAX, to stay in the example such as Daimler, Adidas, Bayer or Deutsche Wohnen.
In the field of crypto currencies comparable – Important: Much higher risk – with Bitcoin or Ethereum. You will then keep these purchases in your portfolio for 1 year, 3 years or 5 years.
Strategy 1 summarized:
Strategy 2: New coins and broad investment portfolio
Why do I find coins under $5 so interesting?
My second strategy, which I want to introduce to you, deals with coin alternatives. By this I mean coins that have only appeared in the last 1-3 years. Another factor, they must be listed with large, reputable brokers. Because, the price of cryptocurrency is created by supply and demand. This means that only when sufficient demand is generated (reach of the brokers), the investment pays off. The third central aspect is, of course, the price development itself, in the long term and in the short term.
Bitcoin or alternatives? Here is a brief explanation of what makes the alternatives so attractive as an investment opportunity for me personally. As I said, economics is psychology. Coins are based purely on supply and demand.
Question 1: Short-term development +/- 6 months
- A) What is the probability that Bitcoin will double in the next few months? So from currently ~$45,000 to $90,000
- B) What is the probability that new coins will double for less than $5 in the same period?
Important for beginners – It’s not about whether a single value makes $1.24 or $1.13 profit/loss. Ultimately, it’s about relative changes (percent), just like stocks. Which paper / currency / coin / etc. increases in 30 days by 5%, 6%, 7%, etc. Ultimately, wealth accumulation and profit maximization are not about achieving concrete values. Percentages can be clearly easily compared with each other, with different investments.
Question 2: Long-term development +/- 12 months
- A) What is the probability that the Bitcoin will reach ten times its value? After 10 years in the market.
- B) What is the probability that a relatively new cryptocurrency such as XTZ (Tezos), TRX (TRON), EOS or XLM (Stellar) will increase its value tenfold in the same period?
Risk awareness: price fluctuations
What you definitely have to be prepared for when investing in cryptocurrency are very high price fluctuations. While a stock may lose 5 or 10% on a regular basis, cryptocurrency sometimes goes down to 30, 40 or 50%.
If you have invested 10,000 euros and are in your account in the morning – 5,000, stay calm!
Tip – Stock market always means: strategy. Strategy means a “precise plan for a behavior.” Simply put, this means for you:
You sell at a profit. As a rule, do not let yourself be impressed by short-term price fluctuations.
Cryptocurrency Trading Tips: My Top 3
For the reasons mentioned above (risk), it is so important (for private individuals):
Investment portfolio: Stocks, ETFs, commodities, precious metals & Co.
Briefly on the diversification of your investment portfolio:
Cryptocurrencies are still very close to each other. With Bitcoin as the perceived reserve currency, the prices go up and down. If you spread a stock portfolio across several public companies, usually only a fraction of your shares go down, so a few papers, not all. In the case of cryptocurrencies, market movements are closely linked.
Diversify your portfolio!
Don’t just buy 1 coin, divide your equity into several. Crypto should only make up 5-10% of your portfolio. The rest are investment alternatives such as stocks, ETFs, commodities, precious metals, possibly also FIAT currencies, etc. Strategy 3: Hochtief Trading
Wealth accumulation with less risk, prefers long-term investment strategies. If you want to maximize your profit, you have to trade daily and stick with it.
Here is an insight into how you can act even more “professionally”:
Traders who are aware of high risk use all their capital to make trades that are risky but associated with high profit. One possibility is crypto currencies, precisely because the price fluctuations are so high.
The higher the price fluctuation, the faster the business
So it’s about daily, hourly, buying and selling. Unlike stock trading, this requires full attention, as the price is subject to constant fluctuations. Your goal:
Taking profits from differences in heights and lows With targeted
trading explained: Profit taking, loss stop and margin
These 4 aspects are particularly important here:
Simply explained, the whole thing works like this. Margin: Broker fees on purchase
First of all, briefly to the “Margin”. As you have already learned, the margin is profit margin of your broker (provider of the platform, website or app). Some brokers also take an order fee of 5 to 10 €. With most “modern” apps, however, you no longer have to pay for it, only the margin.
Tip! Trade without an order fee and without a marin?! If you live outside of Germany, then you can trade with Robin Hood (no advertising link)! The highlight: Robinhood is free of margin trading. I would also like to, unfortunately I have my residence in Germany. Unfortunately, we can’t do that in Germany. Not yet. I myself trade, after really testing all the apps, everything from stocks to ETF and crypto with Etoro.
This fee for the purchase is usually about 2% of the course. The selling price is the actual value. The purchase price is the actual value plus the broker’s margin.
- Sell: $100 (rate)
- Buy: $102 (including margin of $2)
Take Profit: Take profits
