5 tips for your 1st investment

The first time around is always a difficult process to manage, and especially when it comes to money with the first investment. Therefore, to earn money and get a return on savings, you have to take into account some tips. Perhaps it will not develop as originally planned and the effect will be the opposite: losses will surface. Lack of knowledge of the markets and financial products, lack of learning and no experience in operations are the causes that can make you lose money on a first investment. To avoid this, this article shows the keys so that the first investment is not traumatic and can be channeled with the best results.

First investment, the most difficult

If investing is always a complicated process, and with a certain propensity to risk, it is much more so for those who do not have experience in this kind of operations and decide to make their first investment. Lack of learning and inexperience can play tricks on them and lead to money losses.

But novice investors can follow guidelines that limit the negative effects of the first investment. The key is to cement an adequate strategy to expand, even slightly, your personal assets. To achieve this, it is necessary to abide by criteria based on prudence, especially avoiding all kinds of sophisticated products or those that require minimal learning. It is preferable to set a modest goal, but one that can actually be achieved.


Tip 1: invest only part of the savings

You should never invest all the available capital, nor a very large part of it. Depositing between 20% and 40% will be enough for the first operation. Not surprisingly, there will be time to expand the investment, as the experience accumulates and the first positive results are detected. As a consequence of this strategy, the possible losses of money will be less and there will be more opportunities for the trend to change radically.

Tip 2: invest in popular products

Inexperienced savers should not, even remotely, invest their savings in banking products that they do not know, and even less in sophisticated designs of which they do not master their mechanics. They should be limited to those already known, at least in theory, and those who know how it works. This is the best formula to avoid making mistakes that could make them lose part of their contributions and, above all, so that the losses are less intense.

Tip 3: look for a guaranteed return

While they continue with their learning to generate greater return on their capital, first-time investors will have no choice but to opt for products that guarantee a return, no matter how small. Their options go through equities, through the securities that pay their shareholders with dividends (earning up to 6% every year) and continue with fixed-term deposits, or even mixed funds, which allow to improve the margins of return on savings.

Tip 4: get advice the right way

If they are not in a position to channel savings, either due to ignorance or because they have never operated with most financial products, inexperienced investors will have to demand the help of their bank. Certainly, they will have professionals who will be in charge of protecting this process, determining which designs are the most convenient at all times, as well as under what conditions to underwrite them, depending on the available capital and the level of risk that it can tolerate.

Tip 5: do not be influenced by other people’s opinions

Siren songs about what they can earn in one or another banking product will surely reach their ears, and these can come from people or opinions of not much confidence. In order not to make an excessively serious mistake, it will be necessary to avoid them, at least while the first operations are developed. They can lead to irreparable mistakes, from which your checking account balance is seriously affected.

What you should take into account before making your first real estate investment

  • Look for projects at presale prices, this ensures even more profitability when it comes to long-term sale.
  • Make sure the property papers are in order. You know, check that the property has no outstanding mortgages or liens.
  • It is important not to invest everything in the same market.
  • If you invest in something that is under construction, see how reliable the construction company is and how sure it is that the work is completed in a timely manner.
  • Beware of areas without capital gains. If you have doubts about this, read: How do I increase the equity in my house?
  • Also check what’s up with the green areas near your future home or apartment; the lighting, the services you will have access to (telephone, cable television, internet).

If you have money saved and want to make a smart investment, real estate is a good option. In fact, even if you do not have enough money to pay for a house and you must access a mortgage loan, it is still a good alternative because you can pay the monthly bill with the money that you would otherwise allocate for rent.

Do not think about it so much, investment in housing is a solid and profitable business due to its high demand, so it is the opportunity you have been waiting for to improve your finances and your quality of life.

See more “Forex trading – Fast & Effective Way to Get Rich

Why we should invest in real estate?

Have you ever wondered why when we talk about investing in real estate we always use the phrase secure your future?

Of course, at a glance we can understand that real estate investment is a safer way to grow our money and one of the easiest if we take into account that not all of us know how the stock market works.

In addition, acquiring a property, even when you do not plan to inhabit it, can be more beneficial than leaving your money saved in the bank , especially if you acquire one that is located in an area whose capital gains foresees a considerable increase.

However, To buy real estate can sound a bit scary and more when we do not have experience in the field: legal procedures, long payment terms, even the fear of not wanting to be tied to a place where we do not know if we are eventually going to stay.

Why Invest in Real Estate?

It is very likely that when we think about investment in 2021, technology and applications come to mind. The stock market and stocks, which for many years have been the epitome of what we consider to be an investment, has shown that they are not always very safe options, and that profits can quickly turn into losses.

Also, speaking through risks and probabilities makes people end up fearing these issues or trusting people who risk their money and savings, worsening their situation and ending up being the victim of fraud and scams.

That is why many millennials, while still interested in investing in issues that involve technology and those causes that help create a better world (such as renewable energy and the environment), are increasingly beginning to look into more “traditional” options like real estate.

Sure, investing in real estate has been one of the safest and most profitable strategies for investors for some time. But for some millennials, investing in real estate may not seem like an investment at all, especially because of the long waiting time that increases the capital gain – and therefore your money.

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Investing in real estate makes your savings grow

Saving is one of the ways that workers try to prepare for retirement. With the odds that this is no longer an option for millennials – saving has become the great hope in the face of uncertainty.

However, not all of us know how to save. For example, there are those who consider that having their pig at home is safer than doing it in front of a bank. Distrust of these institutions makes many consider saving their money without the possibility of making it grow.

On the other hand, those who decide to take their savings to the bank are also not very likely to see it grow. At least not as we would like.


To begin with, investing in real estate can be seen as a kind of insurance against inflation, especially when we take into account that it is in the face of inflation that real estate prices increase during this period. In addition, we must consider that fixed mortgages maintain the same rate, so that even when prices rise, your debt may not do so – in case you plan to acquire a loan with the bank.

So acquiring a property can bring you more benefits than simply saving your money, since the chances of your money being devalued are more dangerous for your money than for your properties.

Diversify your investments

As we discussed at the beginning, real estate is attracting the attention of those young people who are wanting to buy a secure pass for their future. There are those who are investing in super specialization to obtain higher paying jobs. Others are guided by their interests and passions and end up creating apps or supporting companies that combine technology and the search for a better future.

However, one of the tips that you should always consider when investing is to diversify your investments. Try to acquire diverse properties, from lots to residential houses or apartments for rent and vacation.

Invest in real estate as an expert

One of the secrets of savvy investors is that they never stop learning. Yes, there are many who fear real estate investing because they think they need to know everything from the beginning or be a doctor of exact science or something like that.

The reality is that you don’t need to be Sheldon Cooper to understand that to invest in real estate you need to go into the market and know what the possibilities and the probabilities are. Remember that time plays a very important role, especially when you have the opportunity to find real estate developments in pre-sale or in areas that are projected with an increase in capital gains.

And not to mention the amenities and vertical developments. More and more investors are betting on real estate developments that appeal to the quality of life of those who wish to live in them, especially if they are close to schools or residential areas.

Top 10 suburbs for buying investing real estate in US in 2021

Real estate has gained more spotlight in the last year – either because people started spending more time indoors, or because inflation in the sector scared both those who build and those who rent. The low-interest rates aroused the interest of those looking for a property to live in and the appreciation of the properties caught the attention of those thinking about investing in 2021.

Real estate remains an attractive asset class for investors looking to have steady cash flow and capital growth through rentals.

Real estate investing generates numerous benefits ranging from stability to property appreciation thanks to optimal market dynamics and allows investors to fully offset the expenses associated with servicing their mortgage through their monthly income from rental.

Although investing in real estate is considered a smart move in terms of profitability, it is not necessary to be an expert in the real estate market, but it does require analysis to know which the best cities to invest in, why, are and whether the property value increases at a faster or slower rate depends on the location. The best cities to invest in real estate in the United States have 3 things in common: jobs, population growth, and good prices in the real estate market. In this guide, we show you the best cities in which it is convenient to buy a house in the USA and the advantages of each one.

These are the top 10 suburbs in the United States to invest in real estate where investors say they will buy properties in 2021.

1.  New York City

The Big Apple is among the 10 best cities in the United States to invest in. According to a survey conducted by a real estate company, it found that 24% of respondents ranked New York as their top place to invest in real estate in 2020 while 16% rated it as their second option.

2. Boston

Considered the capital of the economic and cultural center of Massachusetts. It stands out among the best cities to invest in, it has important institutions dedicated to scientific, electronic, medical, and economic research, among others.

3. Houston, Texas

With a growing economy, Houston is one of the best cities to invest in real estate. It is the fourth biggest suburb in the US and a worldwide business center, it is also the entrance to Latin America. With reasonable accommodation options, high quality of life, and at a low cost.

4. Orlando, Florida

It is considered one of the best cities to buy Miami Florida real estate right now. With low-priced homes as well as interest, investors will get a good deal buying in Orlando.

Rents are high, making Orlando even more attractive to investors. Rental homes are an excellent investment option.

5.  Atlanta, Georgia

A perfect place to invest in real estate, which makes this city a buyer’s market. It is home to a dozen Fortune 500 companies including Coca-Cola and Home Depot.

6.  Seattle, Washington

Seattle has always been an ideal city to buy a property and still is. As the economy recovers; this city shows no signs of slowing down.

Large companies like Amazon, Microsoft, and Boeing are in Seattle. Many young people flock to this city to work in these big companies and the city is moving from suburban to urban and there is no sign that growth is going to slow down.

7. Dallas, Texas

It represents one of the fastest-growing cities; Dallas is one of the best cities in the United States to invest in real estate. With homes priced below 12% of their true value, it is a good time to buy in Texas.

With the technology industry on the rise. Dallas is the ideal place for people seeking long-term financial stability.

8.  Washington dc

It is the capital of the United States, as it is the seat of the political power of the most powerful country in the world, it is a city that offers the best conditions to live, study, and work. This is why it is an excellent place to invest in real estate.

Washington DC is considered an important option for real estate investments in 2016.

9. North Carolina

The city is among the ten best to invest in real estate and a job stability that helps the growth of the real estate market. A low foreclosure rate and strong commercial real estate opportunities. Real estate investors feel safe in this city, as it is always going to be on the rise.

10. San Francisco

Considered by many to be one of the most beautiful cities in the world, San Francisco was voted one of the best cities to invest in real estate in 2016. One of the cities with the best quality of life in the United States.

Things to consider when you buy property for live in/for rent

More than conquering your space, buying a property is making an investment for the future. Real estate tends to increase over time. Therefore, making a purchase in the real estate market is a process that requires calm, mainly because of the high values ​​involved. Finding an alternative that combines the features you have defined and an attractive price is no easy task. And to avoid headaches, before starting the bureaucratic part, it is always recommended to evaluate some important points, such as the physical condition of the property and really know the region where you intend to buy.

Taking into account that the financing of a property can take 15, often 30 years, it is necessary to consider long-term aspects when choosing the place where you will spend a good part of your life.

Despite the anxiety that having a new property can generate, think that the possibilities of undertakings in the city most of the time are many, so, if there is any point with which you are not satisfied during the purchase process , give a weight and a greater attention to it, which can be decisive.

The most important tip is: do not rush and understand that this decision must be taken calmly and analyzed in all aspects. If you are lost as to the main points to consider, follow our checklist below to see if the property corresponds well to all topics and, thus, if it is worth investing.

1. Location

Take a few walks around the neighborhood where the property you want so much is located. See if it has good options in the market, pharmacy, bakery, gym, etc. things that spare the use of the car for basic everyday needs. Then, research the means of transportation and proximity to the work of family members.

How long will it take you to get to and from your usual locations? Does the region have a lot of traffic? Do you have a subway? Near bus stop? All of these questions are essential when analyzing the location of a property.

2. Conservation status

If the property you are looking for is new, its state of conservation tends to be much better, in addition to the possibility of activating the guarantee for any defect. But if the home of your dreams is in a used property, it is important to find out every corner.

Open all the taps and showers , turn the circuit breakers on and off, check all the walls well to try to find cracks and, if possible, get a report on the building from an architect or engineer. So you will feel much more secure with the purchase.

3. Long-term size

If you are newly married or single, you may even be considering buying a 30 or 40 square meter studio right now. But, as we said, the financing of a property can last for several years. So the ideal is that you can glimpse a part of your future when buying the apartment or house.

Do you intend to get married or have children for the next 10 years? Then bet on a slightly larger space, of 60 square meters for example, that contains at least one more room.

4. Position of the apartment

For those who live in very hot cities, this checklist topic is very important. This is because if the apartment receives the afternoon sun, the chances of the heat becoming unbearable for a much longer period of the day are very high. In general, properties that receive the morning sun are more valued, so if you have the possibility to purchase one that fits this option, prioritize it.

5. Security

Not only the neighborhood, but the security of the condominium must be well observed. When visiting the property, see how the concierge welcomes you and how easily you gain access to the residents’ area. Talk to potential neighbors and ask about the violence in the neighborhood and whether there has been any violence inside the condominium itself.

6. Leisure area

Especially if you have or intend to have children, the leisure area of the condominium is important. As it is much more dangerous for children to play on the street today, it is interesting that they have areas to have fun away from computers at home and also to live with other children.

Also, think about the occasions when you can receive friends, such as holidays or birthdays. In these cases, the barbecue and the ballroom become very useful.

7. Value of installments

Now that you have analyzed the physical factors of the property, it is time to consider the financial aspects. When you finally choose your future home, go to the main banks and do simulations of the plots.

It is important to know that not always the most viable option, despite the often lower interest rates. If you have been a bank account holder for a long time and have a good credit line, your manager may be able to arrange special financing conditions.

8. Condominium

In addition to considering whether the parcels of the property will fit into your long-term budget, it is essential to take into account the value of the condominium, which the older the more expensive it will be. Add the financing portion to the monthly value of the condominium and see if the result will not compromise your quality of life.

See “Smart ways to invest in real estate” for more information.

Smart ways to invest in real estate, think outside the box

Those who plan the future know that it is also necessary to think about the best ways to invest money. After all, with so many aspects related to investments, such as security, liquidity and return, it is necessary to analyze every detail well before making an application.

How to start investing in real estate?

Anyone who thinks that it is necessary to have a large amount of money to invest in real estate is wrong. It is possible to start investments through a real estate consortium, for example.

In addition, acquiring a property in the plant or land in condominiums are viable alternatives to invest the money, even if they are not high amounts.

However, it is important that anyone who intends to invest in real estate think rationally. It may seem obvious, but when it comes to investment, no decision should be made on impulse.

For this, it is important that you keep in mind whether that property – be it land, a house or a commercial building – can really yield the desired profit.

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Here are some Smart ways to invest in real estate that you can consider:

Invest in land

Although the purchase of ready -made properties is a more accepted idea by most people, investing in land is an excellent way to guarantee profit in the medium and long term.

As cities are expanding, land is unlikely to lose its value over the years.

In this way, it is possible to obtain a considerable profit with the appreciation of this property according to what was spent during the purchase of the land. However, it is essential to make a careful analysis of the region, to ensure that the properties will develop or that, at least, have the potential for appreciation.

Buy real estate in the plant

The properties on the floor plan are the most sought after among those who wish to acquire their own home.

However, because it is a good that will still be built, this option must be very well made possible by the interested parties. After all, important and decisive factors must be considered during the period of construction of the property.

One of the positive points is that buying a property in the plant, generally, is synonymous with lower prices. Therefore, it can be an excellent alternative for you to acquire a new property, paying only one entry and small installments.

Thus, after a few months, with the work still in progress, there is the possibility of selling it at a higher price.

Look for good properties to rent

Having a rental property is a way to guarantee extra income every month. The secret for this investment to pay is knowing how to choose the ideal property.

Finding a property to invest with rentals requires a lot of market research, too. It is important to investigate the real profit potential that each property presents in order to make a decision based on relevant information. Whether residential or commercial, the property must be well located, in a safe area, with good external appearance and also with the documentation in order.

In addition, the saturation of properties for rent is another essential point for the profitability of the business, after all, it is necessary to find customers so that the value of the lease yields some profit.

Make reforms

A very common practice in the real estate market refers to the purchase of used properties that need some type of renovation.

It is possible to find some houses, mainly older ones that, with a renovation, become much more valuable. For that, one must have a nose for finding properties that have potential.

So, if you want to devote yourself to the task of investing, you can spend your time looking for properties that need improvement. In this case, it is very important to take care of the details with the renovation. Stay tuned to the project, materials used and the labor contracted. Thus, you will be able to maintain the property valuation without losing profit.

Study about the market

Another tip is to study the real estate market. Only then will you be able to identify the best opportunities.

Research on market fluctuations, know the areas that are appreciating and follow the rise and fall in rents.

Investing in real estate, like any investment, also has its risks and, therefore, you must prepare yourself to understand what happens.

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How to invest while spending little?

One of the best ways to invest in real estate is through a real estate consortium, that is, together with other people who want to purchase a property.

The value of this asset is divided into monthly fees that are paid to an administrator. When paying the consortium, the investor receives a letter of credit in the amount paid.

The letter of credit can be used to buy a new or used property, as well as for construction or renovation.

The whole process is done without bureaucracy and without the payment of interest – only the administration fee is charged. There is also the chance that the investor will be contemplated before the end of the consortium, which allows the property to be purchased in an even shorter period.

Now that you know how you can invest in real estate, how about starting to plan and guarantee extra income? If you want to invest little by little, through a real estate consortium, remember to hire a reliable broker to avoid future problems and abusive charges.

So, reader, what did you think of the tips and information we brought about investing in real estate? If you liked this content, how about receiving other tips like this to learn how to better invest your money? Be sure to subscribe to our newsletter to stay on top of news.

Real estate as a strategy for investment protection and diversification

What have you been doing to protect your assets from huge losses? Have you used investment diversification or applied them all in one place?

It is undeniable: investing involves risks, but there are strategies that can help reduce the consequences of a bad time in the market. Among them is the diversification of investments.

Despite being a common issue in the financial market, many are still unaware of its importance, and even that investing in real estate can assist in this objective of protecting and building equity.

But, before we talk about the advantages of this strategy and how to invest in real estate comes as an option, let’s start with the basics:

What is investment diversification?

Investment diversification is a technique that aims to dilute risks and maximize gains. It is a distribution of money in different applications, so that the investor is not so affected when there is any negative performance. It is a concept widely defended and used in the investment universe.

You may have heard the advice “don’t put all your eggs in one basket”. It is an old metaphor to explain that if you put the eggs in the same basket and, by chance, drop it, everyone will break. But, if you separate the eggs into several baskets, and eventually one of them falls, you will lose only one egg. In the investment world, the name of this is diversification. This is how you can guarantee more security in your wallet.

Applying your money in different places is important to dilute the risks and maximize the gains. Thus, when one of your applications is not performing well, it will not be as impactful, as the others can compensate for this loss.

Investing in real estate: an option for portfolio diversification

Characterized as a safe investment and providing gains in the medium and long term, real estate appears as a good option for portfolio diversification.

Taking the crisis generated by the Covid-19 pandemic as a scenario, many investors who focused their resources on stocks panicked at the stock market’s downturn.

However, those who have part of their resources allocated to real estate, have a greater sense of security. And even when the real estate market oscillates downwards, the investor manages to have a longer period to make decisions. It is a segment with less volatility.

It is also a way to earn extra income, by renting these properties, and to build equity. However, when investing in real estate, it is necessary to take into account some considerations:

  • Investing in real estate is more common among investors with a conservative profile, whose main concern is to avoid the great risks of the volatility of the Stock Exchange and focus on investments that provide returns in the medium and long term;
  • More moderate and even bold profiles also enter this market, often buying apartments still in the plant with more attractive prices , to resell with appreciation in the medium term;
  • When choosing a property, it is important to assess its potential for appreciation. Observe the location, possibility of urban growth and quality of the development;
  • Pay attention to your needs: despite being a safe investment, the properties have reduced liquidity. If you believe that you will need the money in a short time, it is important to know that the process of selling and renting the property may not be as fast as you wish;
  • Ask the Brokers for assistance, professionals who can help you choose the ideal property, as well as inform you about the potential of the project and location.

What are the advantages of diversifying investments?

Dilution of risks

As we have already mentioned, the main objective of investment diversification is to reduce risks in the face of fluctuations in the financial market.

When you distribute your resources in different places, an eventual drop in a specific investment will affect only a percentage of your money. Thus, there is a dilution of risks and protection in different cycles of the economy.

Consistent profitability and potential gains

Beginning investors may wonder if the investment diversification technique does not affect their earning potential. Industry experts say no. In fact, what you reduce is the oscillation.

There is a possibility that you will not profit as much as possible, but you will also not have significant losses. When the risk is assertively diluted, falls are more controlled and ensure better returns in the short, medium and long term.

And in a scenario in which one of the portfolio’s investments comes up, you will increase your return.

Security and balance

Even experienced and bold investors choose to diversify their investments. This balance in the portfolio may affect the pace of financial growth, however, it is a very plausible way to build equity in the long run.

It is also important to emphasize the security that this technique brings to the investor. This regardless of what economic cycle it is in: accumulation, profitability or capital preservation.

Regardless of the financial phase, it is worth knowing this concept and taking advantage of opportunities, including investing in real estate to protect and even enhance your earnings.

Real estate

Real estate as a strategy for investment protection and diversification

Smart ways to invest in real estate

Things to consider when you buy property for live in

Top 10 suburbs for buying investing real estate in US in 2021

Why we should invest in real estate

5 tips for your 1st investment

A Comparison of Real Estate Investments vs Stocks

How to analyze a rental property

Real estate investing 101

The worst type of Real estate investment

Smart Exit Strategy for cryptocurrency trading

The courses are going crazy, maybe now is the time to sell the jackpot. But getting out of the bitcoin game, ether, ripple, and the like, you have to prepare in advance.

Having a wallet filled with cryptocurrency can be rewarding for the ego, but to make purchases, these funds must also be repatriated in hard and hard currency, in internationally accepted currencies (euros, dollars, or others).

Having hundreds of thousands of euros in cryptocurrency is therefore one thing. It is quite another to own those funds. There are, however, services to make a conversion. But here again, if for small sums the procedure is relatively simple, for large investors, the problem can turn out to be more complex.


Why leave the game?

Bitcoin is having a hard time. The cryptocurrency is experiencing one of the largest drops in its history with a drop in value of around 70% since its record level in December 2017. At the time, a bitcoin could be worth 20,000 dollars against only 6,000. currently. This tumble may motivate currency owners to retire.

Especially since the turmoil is inherent in the very existence of bitcoin. In November 2013, the currency was already experiencing one of its worst days. As Reddit points out, the face value was lower back then, but the coin’s price drop was still around 87%.

Still, this roller coaster may have got the better of your recklessness. In this case, there is an adage that a portfolio owner should always keep in mind: Buy low and sell high. It is, therefore, in principle, not useful to resell your assets in a low wave. Better to wait for a comeback. Unless you decide to play off the beat. In this case, it is recommended to have strong kidneys.

Services that exchange bitcoins/euros

Once the decision is made, it is advisable to go through a third-party service to transfer your assets to a traditional currency. But like a foreign currency, it is particularly important to spot the exchange rates and thus determine which will be the preferential rate to use. The “exchange rate” may indeed vary depending on platforms such as Bitfinex, Poloniex, Bitstamp, Coinbase, Binance, CEXio, Kraken, Cryptopia, Bittrex, or GateCoin.

Subsequently, services such as Paymium, BitStamp, Bitfinex, Coinbase, or Kraken allow you to transfer your cryptocurrencies to a bank account (for which you will have to provide the identifiers). There is no shortage of this type of “office” on the Web.

Note that the platforms may impose a delay of several days between the exchange request and the actual transfer to verify the identity of the wallet holder and account details.

What about taxes, Mo Money Mo Problems?

In principle, if your payments from the bitcoin wallet are important about your regular resources, this will arouse the curiosity of your bank. In this case, she will seek to know the origin of these funds. It is therefore mandatory to be able to justify each profit recorded. Still, you need to make your operations transparent.

As for taxes, the question is a bit more complex. As a matter of principle, the tax authorities should be notified when a person realizes a capital gain from one year to the next. Each taxpayer is therefore


required to declare the money earned from the time a purchase was made with or transferred in conventional currencies (no declaration is necessary if you are keeping your wallet).

Bitcoin as a coin

If you are not a cryptocurrency professional and the income generated is unusual, these gains will be considered non-trading profits (BNC). In this case, it is a question of a tax of around 34% for a threshold below 33,200 euros of annual turnover.

On the other hand, if you regularly reinvest in bitcoin, you change the regime. The gains are then subject to the industrial and commercial profits (BIC) regime. It may then be interesting to go through the micro-enterprise regime to take advantage of a ceiling of 82,800 euros per year for an average tax rate of around 15%.

Practice “Money Management”

Money Management is the art of managing your capital while controlling risks. It concerns both professionals and individuals. The primary objective of the trader is thus to maximize and protect his gains while limiting his losses. Protecting gains and limiting losses involves changing your strategy over time to optimize the risk-return ratio, that is, the ratio between the expected return and the risk represented should not be too out of balance. It’s a bit overwhelming, but having to keep an excellent logbook, paper, or chart, where you record all your trades is a good way to keep an overview of the evolution of your portfolio and your positions. Thanks to this data, you will be able to understand several things: Which trading profile suits you best? What are your strengths and weaknesses? How to build and improve your trading strategy.

Opt for a trading strategy

Training in bitcoin trading strategies is an essential prerequisite. Your strategy will guide you in three areas: entering a trade correctly, monitoring it, and exiting cleanly. Here are three different possibilities for investing in bitcoin. It’s up to you to choose the one that best suits your profile and your character.

Day trading

Day trading is an investment strategy that involves taking positions and closing them on the same day. This method takes time to quickly seize opportunities. Be careful, however, to control the leverage effect. Leverage refers to the use of debt to increase investment capacity.

Swing trading

Swing trading is also a trading technique that is perfectly adaptable to bitcoin trading. Unlike day trading, which takes a very short-term approach, this method has a rather medium-term horizon. It allows traders to spend less time in a day trading and focus on variables. Traders who prefer swing trading often use technical analysis to anticipate future price movements.

Bitcoin scalping

This technique is even shorter than day trading. We also often speak of “micro-trading”. It is about doing a lot of back and forth between buying and selling on the same day. The large variations in the price of cryptocurrencies and bitcoin make it possible to resort to scalping quite easily. But, be careful, it is important to master the technique.

Analyze the markets

Once your method is set up and your account is opened, verified, and credited, the analysis begins. To make your investment choices, you can then favor the method of technical analysis or that of fundamental analysis. Or combine the two.

The basis of technical analysis is the study of charts to determine the ideal time to buy or sell. Users of technical analysis seek to establish trends by drawing support or resistance lines. The analysis of the past behavior of the curve also allows conclusions to be drawn in the technical analysis.

Fundamental analysis takes the external environment much more into account and will consider the asset concerned in its global environment. When you decide to invest in the dollar after intervention by the European Central Bank, you are doing fundamental analysis. The moment external variables enter into your investment choice, you are in fundamental analysis. This also applies very much to bitcoin.

A tip: keep track

Despite these details, it is important to keep in mind that you may need to be able to justify your winnings. So be sure to keep the traces, evidence as you move forward to demonstrate the origin of the gains. By being transparent, the tax services will be better able to advise and support you.

Crypto Risk management / when and how to take profit?

The market for digital assets is still young, so volatility is a natural part of this market. Before wanting to enter the game for the first time, it is necessary to take into account that this market is prone to irrational phenomena.

The market for digital assets is still young, so volatility is a natural part of this market. Before wanting to enter the game for the first time, it is necessary to take into account that this market is prone to irrational phenomena.

Diversification is a key part of risk management, but is it really important to be exposed to a variety of assets and Cryptocurrencies?

The answer is yes, it is worth diversifying investments to mitigate risk.

Crypto Risk

Trading cryptocurrencies using a spread betting or CFD trading account can be much safer than investing directly in crypto through a digital wallet for several reasons.

When you own cryptocurrencies, you are at the mercy of price swings, which can be sudden and significantly change the value of your investment. You will also have to open a digital wallet, which can be difficult to set up and manage and weigh the risks of possible cyberattacks on the cryptocurrency exchange.

However, when you trade cryptocurrencies through CFDs or spread betting you will have access to the same risk management tools as when you trade any of our other major assets. This can help you enjoy the same market opportunities, with less exposure to risk.

The rules of the risks associated with trading cryptocurrencies are not impossible to follow. In this article, we will talk about risk trading and how to manage your cryptocurrencies safely.

Risk refers to the probability that a negative event will occur in your activities, an event that is contrary to the results you had anticipated. Risk is an integral part of cryptocurrency trading It is the possibility of an unwanted result during trading, which translates into losses. For example, a 50% risk on a short position simply means that there is a 50% chance that the price of bitcoin will go up, causing you to lose.

In this article, we will teach you the simple rules that you must follow when managing risk in cryptocurrency trading.

Risk Types

The world of cryptocurrency trading is vulnerable to four main types of financial risks:

Credit risk

This risk affects cryptocurrency projects. It is the probability that the parties behind the cryptocurrency project will not meet their due obligations. Credit risk is mainly attributed to theft and fraud in the cryptocurrency market. 

Legal risk

Legal risk refers to the probability that a negative event-related to regulatory standards will occur. For example, the prohibition of cryptocurrency trading in a certain country. A practical example of legal risk is when the states of Texas and North Carolina issued a cease and desist order for the Bitconnect cryptocurrency exchange due to suspected fraud.

Liquidity risk

In cryptocurrency trading, liquidity risk refers to the possibility that a trader cannot convert his entire position to a fiat currency (USD, YEN, GBP) that can be used for daily expenses.

Market risk

Market risk refers to the possibility of currency prices going up or down against a position you have opened.

Operational risk

Operational risk is the possibility that a trader cannot trade, deposit or even withdraw money from their cryptocurrency portfolio.

Main Risk Management Strategies

The general rule of thumb in cryptocurrency trading is: “don’t risk more than you can afford to lose.” Given the severity of risk in cryptocurrency trading, we normally recommend traders not use more than 10% of their monthly budget or income. Also, it is not advisable to use borrowed money for trading, as this puts traders in a position of credit risk.

Risk management strategies can be classified into three categories: risk/reward ratio, position size, and stop loss and take profits.

1. Position size

The size of the position dictates the number of coins or cryptocurrency tokens that a trader is willing to buy. The possibility of making big profits from cryptocurrency trading tempts traders to invest 30%, 50%, or even 100% of their trading capital. However, this is a disruptive move that results in serious financial risks. The rule of thumb is: never put all your eggs in the same basket. Here are three ways to determine position size.

Entry price vs. the amount to risk

This approach considers two different quantities. The first is the money you are willing to invest in each operation. Traders should consider this amount as the size of each new position they open, regardless of its type. The second represents the risk money, that is, the money that you can lose if the operation fails.

The entry price is calculated in this way:

A = ((Stack size x Risk per trade) / (Entry price – Stop Loss)) x Entry price

Crypto Risk

Let’s say we want to buy BTC with USD with a target of $ 13,000. Our parameters would be:

Stack size: $ 5,000

Risk per operation: 2%

Entry price: $ 11,500

Stop Loss: $ 10,500

Our entry price would be:

A = ((5,000 x 0.02) / (11,500 – 10,500)) * 11,500 = 1,150

The ideal amount to invest in this operation would be $ 1,150 or 23%. However, due to our Stop Loss, we only risk 2% as the trade will stop once it reaches the set level.

Risk trading in cryptocurrency

Elder’s “sharks” and “piranhas”

This concept of position size is related to the diversification of your investments. This concept is attributed to Dr. Alexander Elder, who suggests two rules:

  • Limit each position to 2% risk. Elder compares the risk to a shark bite. Sometimes you want to risk a very large amount, but the risk would be great and catastrophic, like a shark bite.
  • Limit trading sessions to 6% per session. If you are going through a losing streak, you may gradually end up spending everything you have. Elder compares this risk to attacks by piranhas, which take small bites from their victim until they are all consumed.

Following Elder’s Sharks and Piranhas approach, the result is no more than three open positions at 2% each or six at 1%. By limiting the results with a reverse compounding, the losses get smaller and smaller with each subsequent loss you suffer.

Kelly’s criterion

Developed in 1956, the Kelly Criterion is an accurate formula given by John Larry Kelly. It is a position sizing approach that defines the percentage of capital to bet. It is suitable for long-term trading.

A = (% Success / Loss Rate in Stop Loss) – ((1 -% Success) / Profit Rate in Take Profit)

Using the previous example, the characteristics would be:

Stack size: $ 5,000

Amount invested: $ 1,150

% success: 60%

Entry price: $ 11,500

Stop Loss: $ 10,500

Loss rate: 1.10

Take profits: $ 13,000

Our result would be:

A = (0.6 / 1.10) – ((1 – 0.06) / 1.13) = 0.19

This means that you should not risk more than 19% of the total capital of $ 5,000 to obtain the best possible result in a series of operations.

2. Reward/risk ratio

The risk/reward ratio compares the actual level of risk with the potential returns. In trading, the riskier a position is, the more profitable it can be. Understanding the risk/reward ratio allows you to know when to open a position and when it is not profitable. The reward/risk ratio is calculated as follows:

R = (Target Price – Entry Price) / (Entry Price – Stop Loss)

Taking into account the above:

Entry price: $ 11,500

Stop Loss: $ 10,500

Target price: $ 13,000

Our relationship would be:

R = (13,000 – 11,500) / (11,500 – 10,500) = 1.5 or 1: 1.5

A 1: 1.5 ratio is good. We advise traders not to trade less than 1: 1.

3. Stop Loss + Take Profit

Stop Loss refers to an executable order that closes an open position when the price falls below a certain limit. On the other hand, Take Profit is an executable order that liquidates open positions when prices rise to a certain level. Both tools are very good at managing risk. Stop Losses prevent you from making unprofitable trades, while Take Profits allow you to exit a position before the market turns against you.

You can use Trailing Stop Loss and Take Profits that follow rate changes automatically. However, this feature is not available on most cryptocurrency exchanges. Luckily, using terminals like Superorder, you can configure your Trailing Stop Losses and Take Profits directly from the terminal.

Winning Strategies:

Accept failures

Risk is part of trading. Also, we cannot delete it, we can only manage it. Therefore, you must accept your losses and make decisions based on a plan to profit from future operations.

Take into account the commissions

New traders are often unaware of the commissions involved in trading. These include withdrawal fees, leverage fees, etc. You must take all of this into account when managing risk.

Focus on profits

The risk will always be present to discourage you when it comes to trading. However, focusing on the number of times you win will help you develop a positive attitude in trading.

Measure losses

This refers to the total decrease in your initial funds after a series of losses. For example, if you have lost $ 1,000 out of $ 5,000, the loss will be 10%. The higher the amount, the more you will need to inject in an operation for it to recover. As Dr. Elder advises, the risk limit should be kept at 6%.

How starting from scratch right now to build a crypto portfolio in 2021


Bitcoin is considered one of the highest-yielding assets of the decade, outperforming even traditional financial instruments like gold, stocks, and bonds. Bitcoin has produced huge returns to investors in just over a decade. Many institutional investors have started to include a percentage of their investment portfolios; consisting of bonds, indices, stocks; to the main digital assets Bitcoin and Ethereum.

It is an accepted reality that prominent cryptocurrencies like Bitcoin and Ethereum have yielded massive returns to investors in the past. However, the cryptocurrency markets have expanded far beyond the top ten digital assets list. Cryptocurrency markets now incorporate a multitude of utility tokens, security tokens, Defi tokens, privacy tokens, gambling tokens, and more.

Also, building a cryptocurrency portfolio with only Bitcoin and Ethereum is not enough. To take full advantage of the gains from this rising industry while reducing the risk factor, it is necessary to diversify a portfolio containing multiple cryptos from scratch. In this guide, we explore the need to diversify a portfolio beyond Bitcoin and also one of the diversification strategies for a brighter outlook.

What is cryptocurrency portfolio diversification?

Crypto portfolio diversification is the process of disbursing investment funds into different crypto projects to reduce the risk factor if one or more projects fail. The objective is to create diversification with investments in different areas/niches to reduce the overall risks of investments. For example, investors investing in Bitcoin in 2017 had the first-hand experience when the price of Bitcoin fell sharply in 2018.

The basic idea is to reduce the factor of the negative event. This can be done by investing in multiple tokens and coins so as not to lose the overall value of your investments. To this end, a smart investor recognizes that it is safe not to put all your eggs in one basket, that is, in Bitcoin.

It is important to manage your business operations on a reliable and trusted cryptocurrency exchange platform. This makes it easier for an investor to increase their overall portfolio diversification experience.

How to get started with portfolio diversification

There are different strategies to diversify a cryptocurrency portfolio. This can include creating a portfolio taking into account different factors depending on the investor. We have discussed one of the strategies that a trader can employ to build a portfolio that caters to the different properties of tokens, including market capitalization, liquidity, stability, and functionality.


While a portfolio shouldn’t be made up entirely of Bitcoin, the leading cryptocurrency should contain a considerable percentage of your investments. One of the factors is the growing trend of investment in Bitcoin by hedge funds, corporations, institutions, and investors. Major financial companies have also started offering different services related to Bitcoin.

The Bitcoin asset is also gaining the attention of retail investors, thus driving its mainstream adoption. It continues to exceed conventional investment alternate like gold in 2020. Allocating a percentage of your crypto portfolio to Bitcoin mitigates risks by acting as a safe asset.

Ethereum and ERC-20 Tokens

Ethereum continues to rank second in the cryptocurrency markets. Furthermore, the real value of Ethereum lies in its ability to facilitate the creation of smart contracts and decentralized applications.


Its inherent usefulness subsequently provides a solid foundation for the valuation of your native ETH token. Although there are many other blockchain networks, Ethereum continues to dominate the industry.

The ERC-20 protocols are the utility symbols released on the Ethereum Blockchain network. These tokens act as a utility function for a landscape spanning a real industrial use case. Many of these altcoins have found success in their crypto projects. For example, OmiseGo (OMG) is an ERC-20 token that yielded five times more in 2020. In other words, a $ 1 investment in January 2020 is worth nearly $ 5 in November 2020.

Investing in altcoins makes it easy for the trader to leverage exponential growth in a relatively short period. At the same time, it poses threats of scams, project failures, and fraud. But this kind of risk is offset by safe assets like Bitcoin. For more information on the price of Bitcoin and how to buy Bitcoin, click here.

Passive income tokens

Like dividends, some cryptocurrencies give interest to token holders. Staking is a phenomenon that facilitates the rewards of cryptocurrencies in exchange for keeping crypto in a portfolio. In addition to diversification, staking also serves to allow a passive income from having cryptocurrencies.

Cosmos (ATOM) is a token that yields an interest of 8-10% in exchange for staking operations. Dash (DASH) is another token that produces an annual reward of between 5-6%.

Stable cryptocurrencies

Cryptocurrencies are well known for their volatile nature. While volatility can add advantages if trades are executed correctly, it also poses a risk factor. The established ones are cryptocurrencies that are used to mitigate the risks that arise from other tokens. These currencies are tied to the value of an asset such as fiat currency such as USD.

The Tether (USDT) is one of the most popular stable coins that is pegged to the value of the USD. It is advisable to secure a percentage of the portfolio to stable coins or stable cryptocurrencies. This eliminates the risk factor to some extent.

Final comments

Diversification is a strategy used by smart investors to mitigate their risks in traditional markets. The advantages of diversification are equally relevant to the cryptocurrency industry as well. Also, diversification can play a strategic role in cryptocurrency investments when the industry is in a nascent stage. Although it will not eliminate threats or double the value of your portfolio, it is an important tool when markets suddenly turn down.