Altcoin Trading With Logic and AI Tools Over Emotion
With the next crypto bull run looming in the near future, smart investors are strategizing. But first and foremost, for those who will try themselves in the stock market, it is important to forget about emotional decisions and build a strategy using automated trading via AI technology such as Quantum Income PRO. However, even before starting with crypto trading on your own, here are a few things that are a prerequisite.
Risk Management
A well-diversified investment strategy begins and ends with risk management. Set risk levels before considering any individual altcoins. While altcoins are riskier than Bitcoin, you might be prepared to invest a larger capital amount seeing as it’s quite volatile.
Therefore, you need to have a proper strategy for managing your risk effectively. And it starts with diversifying your portfolio with other crypto coins or digital assets.
An Effective Investment Plan
Do not let FOMO (Fear Of Missing Out) get the best of you and overexpose or dump your entire portfolio into altcoins at the first sight of a rally. Set a percentage of your total capital into old established altcoins – Bitcoin and ETH- then for other options.
Know When to Take Profits
Holding onto an investment for too long is one of the worst errors you can make. Especially on the emotional market of crypto, set profit targets beforehand and sell those when the target is reached.
If not sure about the exact exit, It involves selling certain sections of your holdings one after the other at set price rises using a scaling-out system. So you get to take profits and still profit as the price goes higher.
Decrease Your Altcoin Exposure to Reduce Risk
Assuming they yield the promised 500x returns, altcoins do come with huge risks. For the majority of investors, Bitcoin and Ethereum are blue-chip cryptocurrencies with more stability. That said, you still may want to keep your Altcoin holdings rather slight compared to the rest of your investments as a way to control for downside risk.
Many Altcoin valuations are highly speculative and unfit for a long-term buy-and-hold strategy. There exists a set of market cycles, and between them, many altcoins drop by up to 95%. A thorough exit strategy combined with a diversified portfolio (including established crypto coins) can help to spread out the wild ride.
Strengthen Your Research with Appropriate Tools
You only need the best AI analysis instruments through an appropriate AI trader bot. These are the platforms that enable advanced data analysis for individual blockchains, Layer-2 solutions, and DeFi projects. Learn about trading volume, TVL, and other important stats.
With the help of these tools, you can scan for all potential vulnerabilities or malicious code in smart contracts before putting your money into a project.
Utilizing these plus fundamental research, market position analysis as well as SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for each project should get you into a very solid place to make wise investment decisions.
Takeaway
Fasten your seat belt this crypto bull run is going to be a rollercoaster. However, if you place risk management and diversification at the forefront, you can navigate through the volatility without too much trouble. This way, you can end up on the right side of the bull run.
