How to build a Crypto Portfolio
How to build a Crypto Portfolio

20/20 Crypto Portfolio Building Strategy “A Model for Coin Newbies!”

in INVESTING IN CRYPTOCURRENCIES

Disclaimer

This article is for educational purposes only. We are no financial advisors. Do not make investment decisions based on this informations. The information provided from Smart Options is for informational purposes only. It should not be considered legal or financial advice. You should consult with a financial advisor or other professional to find out what may be best for your individual needs and risk tolerance. Please do your own research and never let anyone trade your account for you. We do not support or advertise Fund Management in any kind of manner. We solely review signal providers, their work/analysis/provided education. Please read this disclaimer and leave the website if you disagree with it.

Today we will introduce you to the 20/20 strategy/model. It is a simple template in order to get you to build and grow your coins in a strategic and logical format. Alt coins and cryptos in general can make even the newest newbie think they are trading geniuses! “Look at me ma, I am Gordon Gekko! BTC just doubled in price, time for me to join Goldman Sachs!” This type of thinking of course is very dangerous. An experienced trader/investor should always have a plan as well use a logical money management formula to trade off of. Below you will see a simple allocation using basic %s and using simple logic to buy/sell coins in a portfolio. Often people have no plans and will allocate not based on anything more then their feelings/emotions. This is a FATAL flaw, as nobody can really tell you the future or which coins will run or not run. Lucky enough for us the Cryptocurrency space it can make even the most blind retarded monkeys suffering from autism seem brilliant in trading more often than not, as the money flows into cryptos have been huge the past year. That may not always be the case and smart investing/trading just may help you avert incoming disasters. Below is a method I use myself.

#1) Pick 20 coins to trade, which ones are up to you. Does not matter really, can be things you believe in or that are popular ect ect. That is more arbitrary really, for me I just pick the ones I like along with that I also try to balance them out according to their leadership in the space they are in.

#2) Up to 5% in each coin – Now here it gets interesting, notice how I say up to 5%. This gives you leeway in which you can keep certain amounts of $ on the sidelines for future use. So lets say I invest 80% of my funds into 20 of the coins and use the other 20% to keep on the sidelines for future purchases. I often do this waiting for pullbacks on certain coins. Since I love to trade this has a good effect of compounding my returns over time. I might invest 2% in Bitcoin Cash and 4% in NEO for whatever reasons. I keep within the rules of 5%, as well I might even lay out %s to dollar cost average a coin. Example with my 20/20 Portfolio I recently bought back 5% on the last pullback to the mid $11-12,000 range on Bitcoin.

Bitcoin DCA

 

3) Dollar Cost average both to Sell and to buy – As you can see above I entered in two spots on BTCs last move using my technical analysis expertise to gain imo a very good entry overall on that last pullback. This is called Dollar Cost Averaging and you can use it to scale out of trades as well, example in the chart below I sold 60% of my Ethereum holdings by scaling out as prices moved to each oversold level. Now you can’t predict exactly where to exit, but if you remain logical instead of emotional, you can at least put the odds in your favor to both reduce losses and increase profits with sound decision making skills. Below you can see how I exited up and down Ethereum both selling it as it moved up and buying it back as it moved down, again using my Technical Analysis skills to trade the moves on it. To not confuse you the first %s = total holdings the next 2% would equal 40% of net holdings, which due to the fact I sold high bought low = inverse compounding on positions so my 2% actually increases in value naturally from selling high and buying low ect ect. I repeat this cycle over and over in time.

Ethereum chart trading

 

4) Use rebalancing to add stability to the 20/20 portfolio model – What this simply means is say at a given period of time your allocations on coins has become out of wack or one coin had a very large run and is 2x worth more than your next best coin, this happens often in crypto trading. I have had 1 position on a very large run go from 5% to equal 20% of my holdings simply because it moved a far greater amount then my next best coin or coins. This is in cryptocurrency trading almost a normal occurrence of late. One thing you can do to offset is at the end of each month or whatever time you feel makes sense is reset each coin back to around the 5% mark by selling your huge wins and dollar cost averaging ones that stall. If the ones that stall are still good coins that you like, well when they do decided to run, you will be in a happy place as you have to deal with rebalancing them down the line after their monster run! All of this simply is again using good logic of buying low/selling high, all on a natural plane to which you have built in with the 20/20 model of planning. Sound logic and planning can beat the returns of even the smartest hotshot trader by coldest of BTChes lol “STATISTICS” I have watched many hotshots burn out over time as I happily went along my way of growing my holdings, watching as they exploded turning their amazingly high win rates/profits into ZERO $balance at the end of the day… Sage advice – “Trading like revenge, is a dish best served cold…”

5) Keep an eye on the future, using the 20/20 model as a starting point – This is a basic outline to help change your thinking from an emotional wreck that has no idea where they are going or what they are doing, to one instead that has a plan and is ready to become a stone cold killer in investing/trading cryptos. It is also not a stopping point, as you see how it is not so much about being right or wrong, picking the right coins or even timing everything perfectly. You will allow yourself to develop a way of thinking that will serve you well into the future. You will be objective/logical/disciplined/observant/focused and most of all you will have road to follow into being successful in your crypto trading. I can’t wish for anything more than one to use simple logic and reasoning to get above average results and know as they apply the same logic to different %s, or coins based on any number of variables they deduce logically from what they have observed. Giving them the best edge in a unemotional and disciplined fashion. If you want a good future in crypto trading, you have to move in, move out and move on!  Let this be a starting point for you.

To summarize, the 20/20 portfolio model is just that alone… It is a model for newbies to build sound trading logic to help build successful portfolio of coins. It should serve to help you do this in a easy to understand format you can apply right away. Please do note we are not financial advisors and to read our sites disclaimer, as we would not wish to mislead you. This is for educational purposes only. Often a newbie lacks any sound plan or logic and often allows their emotions to dictate their buying and selling decisions. The above was designed to help you formulate a sound logical way of thinking/planning, that will likely aid in your building a vast crypto empire, of which even Lord Vader would be proud of…

Bigger than the industrial revolution, "Smart Contracts" will change our world! We are the CRYPTOlution! I am the voice in the back of your head providing you insight of all things Crypto/Blockchain, so as I whisper in your ear, listen close...

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