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Four tips on using tech to improve your cryptocurrency trading/investment performance

by John Saunders
15th Oct 18 10:31 am

Cryptocurrency trading and investing continue to be attractive to thousands of new users who hoping that there will be a repeat of the 2017 bull run. Last year, Bitcoin delivered more than 1,300% gains and other cryptocurrencies such as Ethereum and Ripple delivered exponentially bigger gains. If you are new to cryptocurrency trading, it might feel like jumping into a vast sea of unknown uncertainties. To start with, there are about 2,047 different coins, tokens, and altcoins in the market – it might be hard to know where to start trading.

Beyond deciding on the coins to trade, navigating the cryptocurrency markets might also feel unnervingly complicated. Thankfully, you can leverage technology to reduce the stress of navigating the maze and improving your odds of trading success. Below are 4 tips to use technology to your advantage as a cryptocurrency trader.

Portfolio management

Portfolio tracking and management is one of the activities that takes the bulk of the time for cryptocurrency traders and investors. The ideal cryptocurrency management tool will have a user-friendly interface that provides a snapshot of your holdings while also allowing slicing and dicing of your portfolio.  Many portfolio management tools have features such as price alerts and order book reviews. You’ll want your portfolio management tool to integrate with popular wallets and exchanges, and its also great if the system has a feature for tax calculations and reporting.

Choosing the right wallet

The importance of choosing the right wallet as a cryptocurrency trader or investor can never be overemphasized. A cryptocurrency wallet helps you to take responsibility for the storage of your cryptocurrency and it provides more security for your funds than the path of least resistance that most people take to keep their wallets on an exchange.   Some of the best cryptocurrency wallets support a growing list of coins; hence, it might be somewhat counterproductive to have a wallet for every coin you keep. You should also pay special attention to how the wallet utilizes seeds to protect your account in authenticating usage, encrypting transactions, and allowing your to recover your coins if you lose your device.

Using the right exchange

Cryptocurrency trading happens on exchanges – even investors who want to hold crypto for the long term will buy it on an exchange. Most people will choose their trading exchange based on ease of use, mobile responsiveness, and the quality of customer service. In choosing an exchange, you’ll want to at the number of coins available for trading, volume of trading recorded, and transactions fees charged on trades. More importantly, you should find out the kind of security measures the exchange has to prevent or thwart hacks. It’s also in your best interest to be sure that the exchange has an insurance policy of sorts to reimburse you in the event of an hack.

Choosing the right asset allocation

This point is not particularly tech-driven, it is mostly commonsensical, and it is purely subjective; nonetheless, it could potentially make or mar your cryptocurrency trading venture. Many people romanticize the rags to riches stories of early-stage cryptocurrency traders/investors who risked all they had in the days leading to the 2017 rally. However, the fact lost in such stories is that thousands of other people made such reckless decisions and they’ve not been able to recover from the losses they suffered. If you are under 30, you should try to only allocate 30% of your investments to cryptocurrency, people between 30 and 40 years old should keep their crypto investments to 20%, and you should invest more than 10% of your net worth on cryptocurrencies if you are more than 40 years old.

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