In April 2021, I noticed Ripple’s price surge to the $2 range and came across a joint chat post on Telegram. The post read, “I had Ripple at 20 cents, sold at 70 cents! Now it’s at $2 if only I held. Phuck my life.” This was one of many dramatic posts/complaints regarding the significant increase in this pair. It’s a common regret in the world of cryptocurrency trading. However, I don’t have such regrets because I use the CORE 3 approach to trading. I divide my strategy into three equal parts: HODL, TRADE, and THROTTLE.
Understanding the Core 3 Portfolio Mechanics
The CORE 3 Crypto Portfolio is a well-balanced investment strategy encompassing three keys to cryptocurrency trading: HOLDling, Trading, and Throttling. This diversified approach allows me to maximize their potential returns while minimizing. In this article, we will delve into Crypto and provide valuable insights for crypto traders, and I will explain them individually.
#1 HODLing Strategy
HODLing, from the term “hold,” refers to buying and holding cryptocurrencies for an extended period. This Strategy is on the belief that the value of cryptocurrencies increases over time. By identifying promising with solid fundamentals and a-term vision, investors can build a HODLing portfolio with potential gains in the crypto market. For example, Bitcoin (BTC) and Ethereum (ETH) are popular choices for long-term HODling due to their widespread adoption and solid track records.
#2 Trading Strategy
Trading a CORE Crypto Portfolio involves actively buying and selling cryptocurrencies to short-term price movements. Traders use technical analysis tools, indicators, and trend lines to identify entry and exit points. Successful traders often rely on solid risk management techniques, such as orders and utilizing proper position sizing. It is to stay on market news and developments trends to make informed trading decisions. If you are a beginner, please begin by reading about how to start with Crypto trading.
#3 Throttling Strategy
The throttling Strategy balances the throttling and trading approaches, periodically rebalancing the portfolio. It involves taking profits from successful trades and reinvesting them into promising long-term projects. Throttling helps maintain a diversified portfolio and mitigates risks associated with extreme volatility. Additionally, it allows capitalizing on-term trading while still benefiting potential growth.
The Allocation of the Core 3 Crypto Portfolio
Now that we understand the strategies, how should I distribute my portfolio? What distinguishes each strategy?
- 33% HODL – One type of investor is known as a “HODL” investor, who tends to follow a predictable and low-risk investment strategy. They typically purchase a cryptocurrency and hold onto it for an extended period without making significant changes. They might only sell a coin if they lose faith in its potential. In their free time, they spend a lot of time researching and learning about which coins have the most growth potential. Although they may seem boring as they prefer to stay in and read comics, they take pride in their valuable collection, which includes a copy of Superman Volume 1 worth over $300,000.
- 33% TRADE – Meet TRADE, the counterpart to HODL. Like HODL, TRADE buys coins, but it’s a bit more strategic. When HODL buys 1 ETH, TRADE follows suit and buys 1 ETH. The same goes for 1 BTC and any other coins HODL acquires. However, TRADE likes to make moves based on its market assessment. TRADE is not always right, but it’s always looking for opportunities to grow its crypto portfolio. Unlike HODL, which is content to hold onto its coins, TRADE wants to be active in the market and make trades to increase its balance.
- 33% THROTTLE – HODL and TRADE have a friend named THROTTLE, who is often seen as the odd one. He enjoys partying and having a good time but sometimes takes it too far. On occasion, they have had to rescue him from being passed out in an alleyway at 4 am. THROTTLE tends to act impulsively after drinking tequila and doesn’t seem to worry about the consequences of its actions.
The Trading Rules for the Core 3 Crypto Portfolio
- When your original stake has doubled in profitability, it is crucial to withdraw 100% of your starting capital. For instance, if you invested $1000 and now have $3000 gains, it is time to take out your initial investment. This strategy guarantees you cannot lose any money, as you are working with the market’s capital, and your risk is zero. Thus, although the temptation may arise to go all-in and aim for riches, it is wiser to prioritize securing your profits first and playing it safe.
- It’s important to diversify your holdings when investing in coins. Many people make the mistake of buying too few coins, assuming that the ones they have are the best. However, as the old Chinese proverb says, “Water which is too pure has no fish”. Having a diverse portfolio not only allows for superb stability but also provides the opportunity for a few big winners to overcome any stagnating or declining coins. To start, I suggest having a minimum base of 20 coins, with each coin comprising 5% of your holdings. This is a good basic plan to build upon. You can also create another portfolio and experiment with different percentages and ideas.
- When examining my charts, you may notice that I often scale in or out of a position at various price points or events. This technique, known as dollar cost averaging or scaling out, is a strategy I employ to boost my overall profitability. As someone with a background in technical analysis, I find this approach particularly well-suited to TRADE or THROTTLE. Give it a try, and enjoy the process!
No strategy is terrible results
These are the fundamentals of CORE 3. Some people may find this information uninteresting or believe they have a superior approach by having no strategy. However, inexperienced individuals often overestimate their abilities once they regret they face a setback. I frequently hear them regret missing an opportunity to make a profit. Maximizing your team members’ diverse strengths and abilities is essential to create a powerful force. According to Sun Tzu, “Every battle is won or lost before it’s ever fought.” It is crucial to plan effectively for your future, my friends.