Topic: Trading with caution (Read 258 times)

exactly what @jseverson said apart from the stablecoin part because they are still altcoins and they also have risks similar to altcoins. for instance these days you can see that Tether that everyone mistakenly thought will always be stable has fallen down below $1.
but basically when you diversify, you are diversifying your money that you invest. this means buying different assets that are not connected to each other so that they are not taking influence from similar incidents. because that is one of the points of diversification, to reduce the risk of losing money when some incident happens. for instance when Bancor was hacked this year price of every cryptocurrency dropped (bitcoin dropped less and altcoins dropped more). so if you held cryptocurrencies only that meant you lost money but if you held bitcoin + stocks for instance you only lost money on your bitcoin investment while your stocks were moving the same way as before because they weren't affected by this incident obviously!

Thanks for sharing your inputs. I agree we should do our own research before investing into something. I think this topic is much suited on trading discussion >> https://bitcointalk.org/index.php?board=8.0
how to move a topic? go to the lower left of your thread and you will see move topic.

Not who you're asking, but I'll try to answer anyway.

The closest thing to being diversified in crypto is holding anything plus a stablecoin, because it shouldn't move along with the market. It's ultimately pointless because you may as well hold on to your fiat plus whatever coin you want instead, and achieve the same result.

You can also hold anything plus Bitcoin, but since everything pretty much follows Bitcoin's movements, it won't really count for diversification either -- you'll be protected from altcoin-specific crashes, but not Bitcoin crashes because that's very likely to crash both. This is what most people do, however. Pretty much everyone holds Bitcoin while gambling with the more volatile alts.

For proper diversification, I would advise that you look outside the cryptocurrency market. Crypto can be a tool to help you diversify, but you can't really diversify within it, if that makes sense.

tldr; if you're concerned about crypto diversification, just hold Bitcoin lol

A trader can just understand deeply their mistakes once they experienced the situation.

Honestly even how they study all the risks and pointers prior to the actual trades, they will still experienced the "worst things".

So for me, it's way better that a trader experienced those "worst" so they will really understand it and as they progress they will have their own way how to deal on it.

Which coins would you advise to combine to have proper diversification?

Exactly this. I ve been talking to so many "investors" in the crypto space lately who think they have a good portfolio because they own more than one coin. Those are the guys who keep complaining that "every coin follows bitcoin" with its price movement ...

There's really no such thing as diversification in crypto. The market tends to mirror Bitcoin's movement closely, so if you really want to be safe with your "investment", you're free to put all your eggs in Bitcoin (because everything else will fail before it does), but not in any other coin, except maybe the most established alts.

A better way to word this is to be careful with putting money into new "projects" because it's so much riskier than putting money into reputable cryptos.

This is usually synonymous with short term traders who are so eager to maximize profits that they find it difficult to different between a real,artificial pump or when whales are simply playing games with the market to maximize profits for themselves...

Always check the coinsmarketcap, you cannot simply place your investments on news you get on the forum or from peer groups, it's always healthy to make your own research and findings,its usually better that way, putting everything solely in your hands...

Panic sales has being a lot of users undoing in this very system, Instead of panic sales it's usually better to Hodl and be patient,it more often than not comes good.

a very common mistake among people who invest in cryptocurrencies and are generally new to investment is that they think "diversify" means "buy multiple things instead of one". but this is wrong and a very simple way of thinking about it.
just buying more than one coin is not called diversification. if it was that easy then everyone would have become millionaires. diversification means you buy multiple assets that are not connected to each other! for example if you have coin A and buy coin B to diversify but if coin A goes down then coin B follows it down then that doesn't mean you diversified. it only means you made things harder for yourself to handle.

if any project is focusing on the valuation of their token rather than improving and building a long term working project, it's a warning sign. if someone is looking for more stuff to consider before investing in icos i wrote some here: https://bitcointalksearch.org/topic/analysing-icos-applies-to-crypto-investment-in-general-3760625

Pretty generic advices. I would add to that, know what you are doing always.
Know the risk you are taking doing what you want to do.
This will save you from most failures.

 According to the dictionary trading is the activity of buying and selling or exchanging goods and services between people or countries.

Trading is a very serious business as much as you can gain you could also make losses. For beginners and newbies trading in cryptocurrency might pose as a big hurdle. There are some little precautions that can help you have a healthy trading

* it's advisable to diversify your investment. The cryptocurrency market is very volatile when for example coin A is having a pump coin B can be having a dump let's say you invest all you had on only coin B you will be headed for loss and regret. Spreading your investment amongst project is quite advisable not only in the cryptocurrency world but in so many other sectors. The future can be uncertain and unpredictable but when you have investment on more than one project you tend to increase your safety

*Investigating on the project you want to invest in.
 Whether it's bitcoin, ethereum or any initial coin offering you want to invest in its always best to do an investigation on it. There some easy step to do that
Step 1. Read the white paper
Step 2. Check your future profit outcome
Step 3. Study the team behind the project
Step 4. Notable investors that are already in the project(note this can be deceiving because some are under sponsored shilling)

* avoid the self killers FUD and FOMO.
 fear uncertainty and despair and fear of missing out has cost so many investors to head to an early investment grave. Panicking in trading is like shooting yourself on the leg. You have to have a strong believe although you do your research and observation and listen to latest update you still have to be in control of your trading.

Know your leverage.
 In investment your leverage is quite important it can increase your loss if done wrongly and increase your gains if done the right way. So having a good knowledge of your leverage is quite important.

Have a blessed trading