In recent years, cryptocurrency has become quite popular, and many people are now trying to branch out to this digital space. Generally, every investor gets into the crypto market with the primary goal of making good profits. But it is not always the case, especially for the early-stage investors who are just getting started. Some of them end up losing a lot of money due to the inherent risks involved and simply give up trying.
Nevertheless, it’s not advisable to steer away from crypto because of such challenges. If you’re an ambitious investor, there’s a great opportunity for you to make the most out of this lucrative industry. You only need to have enough background knowledge and expertise on how you can reduce the risks and increase your earning potential.
This article highlights five ways to maximize your crypto earnings.
Apply Proper Technical Strategies
Technical analysis involves studying price patterns from the past and present and using the data to predict a future outcome. It’s essentially the use of charts and performance indicators. Many professional investors have utilized this aspect to forecast the highs and lows in the crypto market. You can do the same and tell when to purchase at a reasonable price and the right time to sell at a good profit margin.
If you’re an aspiring investor, navigate to this site to start your technical analysis journey. Remember, you shouldn’t be a victim of FOMO (fear of missing out) and FUD (fear, uncertainty, and doubt). Instead, you can do your research, come up with the findings and make an intelligent decision. Equipping yourself with the right technical analysis skills goes a long way to maximizing your crypto earnings.
Diversify Your Trading
The Crypto market is very uncertain, considering the volatility of the assets. The prices can increase or decrease drastically over a short period. For this reason, you can’t depend on one cryptocurrency to make consistent profits. You’ll need to diversify your portfolio to reduce the significant risk associated with one particular coin in case of a market downturn. Along with reducing such risks, diversification also allows you to take advantage of the multiple crypto coins undergoing an upward or downward swing at the same time.
Always analyze the market chart and develop a list of the best performing cryptocurrencies to include in your portfolio. If you’re a beginner, two or three would be a good starting point, but for experienced traders, you’ll need to build a more substantial portfolio. The most popular cryptos to consider include:
- Bitcoin
- Bitcoin cash
- Tether
- Ethereum
- Tron
- Cardano
Also, try to have a balanced portfolio by allocating a greater percentage to the stable coins, say 60%, and 40% for the risky options. By doing this, you’ll increase your chances of earning profits from the various crypto projects.
Trade Long Term
Long-term cryptocurrency investments are a proven way to lock in more profits, mainly if you take time and evaluate the coin’s probability of growth in the long run. Despite the market’s intraday volatility, the prices are likely to continue rising in the coming months and years.
To this end, you’d want to time the dips in the market and buy. This is a proven tactic for profiting the most during uptrends.
The good thing about long-term digital currencies is that you can also earn interest while holding them. The recommended cryptos for long-term investment include:
- Bitcoin
- Ethereum
- Uniswap
Set Realistic Targets
Make use of the stop-loss and take-profit orders while investing. A stop-loss is an exit strategy that allows you to set the base for your trading position. This way, you can avoid losing more money than intended.
On the other hand, a take-profit order automatically closes a trade at the set target price. This is advantageous because you do not have to monitor your charts 24/7. While setting targets, don’t forget the volatile crypto market. Thus, your stop-loss orders shouldn’t be too close to the current price. Give enough room for the usual fluctuations.
Invest What You Only Can Afford To Lose
As mentioned before, the crypto market is associated with massive fluctuations in prices. No single trade is guaranteed to come out profitable. In that regard, you should never risk 100% of your capital at any one time.
Therefore, to maximize your gains, a smart approach is to risk only 1 – 3% of your capital at a time. This ensures you always have money to trade, even if you take several losses in a row.
Conclusion
As a digital currency investor, your main goal is to make the most profit out of the industry. Thus, you must minimize the risks and create a high potential for returns. Aside from the above strategies, it’s critical to tame your emotions while investing in crypto.
The financial markets move wherever they feel like, without any respect for your current positions. And it’s normal to incur concurrent losses, so you shouldn’t feel discouraged. In the long run, to have more wins than losses to grow your investment. These are just a few ways to help you unlock your potential in the crypto world. You can also explore other recommended options.
