Neutral portfolio of currency pairs. How to build a portfolio of cryptocurrencies for a novice user

67 ,. Banking foreign exchange portfolio management

Banking foreign exchange portfolio management consists in achieving its optimal state in each period of time. The complexity of the task of forming an optimal investment portfolio lies in the desire to maximize the expected return on investment at a certain level of risk acceptable to the bank.

Managing a foreign exchange portfolio, a bank faces many complex problems in the formation and assessment of a portfolio - from forecasting the dynamics of the foreign exchange market as a whole and the rates of individual currencies, up to forecast of macroeconomic indicators and assessing their impact on the behavior of individual assets.

The answers are given by the portfolio theory of Harry Markowitz. According to this theory, the risk of assets is considered as the risk of components of a single portfolio, and not of individual units. An important point, therefore, is to take into account the mutual correlations between the returns on portfolio assets. It is this accounting that allows for effective portfolio diversification, leading to a significant reduction in its risk in comparison with the risks of individual portfolio assets.

The technique based on the Markowitz theory allows calculating the effective set of portfolios that provide the maximum expected return at a fixed level of risk and the minimum risk at a given level of expected return.

Consider an example comparing the risk-return ratio of an optimal foreign exchange portfolio and a portfolio based on subjective assessments. Note that the optimal portfolio is one that lies on the effective boundary of portfolios and corresponds to the bank's preferences in terms of risk or profitability.

For the set of assets that make up the foreign exchange portfolio (no matter how many of them there are), the curve of effective portfolios is constructed, consisting of different combinations of assets. The position of the bank's foreign exchange portfolio in relation to the effective border is determined. The preferences of the bank are taken into account, which in this case wants to minimize the risk while maintaining the current profitability. The value of an effective portfolio lies in the fact that the expected return is obtained at a lower level of risk than that of the original portfolio.

However, over time, the behavior of assets changes, as a result of which the current portfolio may no longer be optimal. Again, the question of portfolio optimization arises.

By selling part of the existing assets and acquiring others, the bank can form a new portfolio that is optimal at a given time.

The use of quantitative methods and the latest computational technologies allows the bank's management to parameterize and solve the problem of finding the optimal ratio between the components of the foreign exchange portfolio, minimizing the risk of the entire portfolio in the best way. In this case, the risk of the optimal portfolio, quantified by VaR technology, below the risk of the original portfolio.

68. Assessment and management of foreign exchange risk. Banking Supervisors Requirements

Currency risk is the risk of losses due to unfavorable changes in exchange rates for the bank. The concept of "foreign exchange risk" is associated with the fact that usually the assessment of the results of a bank's activities is carried out in one currency, called "base".

The problem of risk is one of the key issues in the activities of a commercial bank. For any commercial bank, it is important not to avoid risk altogether, but to anticipate and reduce it to a minimum level. Foreign exchange risks are part of the commercial risks to which participants in international economic relations are exposed. Foreign exchange risks are the probability of losses occurring as a result of changes in the exchange rate of the price (loan) in relation to the payment currency in the period between the signing of the contract or loan agreement and the payment. The currency risk is based on the change in the real value of the monetary obligation in the specified period.

The emergence of foreign exchange risks is associated with the following factors:

The main currency risk may arise upon completion of a transaction in ruble terms with subsequent conversion of the received proceeds into its currency equivalent.

Foreign exchange risk also arises when using ruble-denominated loan collateral. A sharp increase in the exchange rate may lead to the fact that the collateral will not cover the existing debt to the borrower's bank.

Another equally important factor is the depreciation of the currency in which the banking operation is carried out in relation to the ruble.

Foreign exchange risk for the borrower may arise in the event of completion of a settlement transaction in one currency if it is necessary to convert it into another. A change in the exchange rate ratio can lead to existing losses for the client and the emergence of foreign exchange risk for the bank.

Commercial banks face foreign exchange risks in their daily activities. They must have effective tools for daily monitoring of all types of risk, both individually and in aggregate for the entire foreign exchange portfolio of the bank. Applying various technologies for assessing currency risks, the bank can most effectively calculate the quantitative measures of currency risks, and therefore carry out effective management of currency risks of the CB.

Foreign exchange risks are usually managed by banks in a variety of ways.

The first step towards managing foreign exchange risks within the bank's structure is to set limits on foreign exchange transactions. For example, the following types of limits are very common:

limits for foreign countries (maximum possible amounts are set for transactions during the day with clients and counterparties in the amount from each specific country)

limits on operations with counterparties and clients (the maximum possible amount for operations is set for each counterparty, client or types of clients)

toolkit limit (setting restrictions on the instruments and currencies used with the definition of a list of currencies and trading instruments that can be traded)

setting limits for each day and each dealer (usually the size of the maximum possible open position in traded foreign currencies is set, which can be carried over to the next business day for each specific dealer and each specific instrument)

loss limit (the maximum possible amount of losses is set, after reaching which all open positions must be closed with losses). In some banks, such a limit is set for each working day or for a separate period (usually one month), in some banks it is subdivided into certain types of instruments, and in some banks it can also be set for individual dealers.

In addition to limits, the following methods of reducing currency risks are used in world practice:

mutual offset of the purchase and sale of foreign exchange for assets and liabilities, the so-called “matching” method, where by deducting the receipt of currency from the amount of its outflow, the bank is able to influence their size and, accordingly, its risks.

the use of the “netting” method, which consists in the maximum reduction in the number of foreign exchange transactions by means of their consolidation. For this purpose, banks create divisions that coordinate the receipt of orders for the purchase and sale of foreign currency.

acquisition of additional information by purchasing information products of specialized firms in real time displaying the movement of exchange rates and the latest information.

a thorough study and analysis of the foreign exchange markets on a daily basis.

And of course, hedging is used to limit currency risks. One of the drawbacks of general hedging (ie, mitigating all risks) is the rather significant total cost of commissions and option premiums. Selective hedging can be seen as one way to reduce overall costs. Another way is to insure risks only after the rates or rates have changed to a certain level. It can be assumed that to some extent the company can withstand adverse changes, but when they reach an acceptable limit, the position should be fully hedged to prevent further losses. This approach avoids the cost of risk insurance in situations where exchange rates or interest rates remain stable or move in a favorable direction.

Another method of managing foreign exchange risk is to analyze the movement of exchange rates. This analysis can be fundamental and technical.

Banking Supervision Authorities Requirements. In order to minimize possible currency risks arising in the CB, the Central Bank of the Russian Federation has developed special requirements for the limit of the open currency position of the CB. Currency position - balances in foreign currencies that form assets and liabilities (taking into account off-balance sheet claims and liabilities for pending transactions) in the respective currencies and, therefore, create the risk of receiving additional income or expenses when changing exchange rates, is determined daily ...

The bank's currency position is determined by the ratio of its claims and obligations in the respective currencies. If they are equal, the currency position will be closed, in case of mismatch - open... An open position can be short or long. Short is a position in which liabilities in foreign currency quantitatively exceed the requirements. It is indicated by a "-" sign. Long position arises in the event that the requirements in In. currency exceed liabilities. A long position is indicated by a "+" sign.

The gross position limit for the entire currency portfolio is determined daily and is set as the Central Bank's standard in the amount of<=20%, чтобы сократить возможные расходы при неблагоприятном изменении курса ин.валюты. Лимит ВП = /вал.позиция/ * курс ин.валюты на 1 число месяца / СК * 100%. Лимит валютной позиции по отдельным элементам портфеля должен по требованиям ЦБ быть <= 10%.

And again about the portfolios. We have already analyzed a lot of aspects of portfolio investment and management - both types of portfolios, and formation models, and principles for the selection of investment instruments, and efficiency calculations. Now let's try to break some stereotypes about portfolio management and talk about some exotic types of portfolios. Specifically, we are talking about the foreign exchange portfolio.

It is believed that portfolio investment in the foreign exchange market is not possible. Indeed, in theory, the mathematical expectation of the profit of any currency tends to 0%. In addition, unlike, for example, stocks, fluctuations in currency pairs are difficult to predict and are not trendy, so investments in one or another currency are impossible in principle. Based on this, investments in a particular currency are used only as a hedging instrument, but not profitable.

Nevertheless, the answer to the question of whether a foreign exchange portfolio is possible in principle remains unanswered. Let's conduct a small analysis of the situation to figure it out. Let's start with the fact that portfolios themselves are different - the classification can be both by the style of trading, and by the level of diversification and duration. Therefore, there are a lot of different kinds of portfolio variations. Based on this, we can conclude that, at least in theory, a portfolio of currency pairs is possible.

However, in order to understand how to do it, it is necessary to understand the behavior and principles of the functioning of the foreign exchange market. First of all, it is necessary to make a reservation - there is still a trend for certain currencies, but it is usually medium or short-term and does not usually exceed 2-3 quarters for a long time. Accordingly, if we proceed from this, then one of the criteria of the foreign exchange portfolio is that it must be short-term - preferably with a validity period of no more than 3 months.

Further, we note that the world currency is not a stock exchange. Those. in other words, trading is carried out not in the order book, but by sending an order for a deal. Therefore, any exchange trading algorithms are not suitable in this case.

Another important criterion is that trends in the foreign exchange market are cyclical, like. The actual exchange rate formation of a particular currency depends on the state of the economy and the economic cycle of the country of the issuer of this currency. So, for example, during the growth of the US economy, the dollar is strengthening against the basket of world currencies - this, in particular, is happening now. At the same time, during periods of economic downturn, it becomes weaker because it loses macroeconomic support - this is the case, for example, with the ruble at the moment.

Finally, the last important criterion for the formation of a foreign exchange portfolio is the use of leverage. Since currency pairs are an order of magnitude less than the volatility of the stock market, you have to use financial leverage to increase the ability to generate returns. In this case, it is also necessary to take into account the risks, therefore, given that the volatility of the foreign exchange market is about 3 times less than the volatility of the stock market, it is better to use no more than the fifth leverage.

Let's try now to put together an experimental portfolio. We use the Tobin model for this. To build a portfolio, we need the following indicators: covariance of instruments (it is better to use a matrix method of covariance analysis), mathematical expectation of each instrument, history of returns and risk premium.

We calculate the shares of each instrument in the portfolio. Through the search for solutions, we enter the criteria for the selection of tools, click "find". As a result, three instruments turned out: GBPUSD, USDCNY and USDJPY.

That's all, in fact, that's the portfolio. Now let's see what the potential profitability of such a portfolio is. To do this, let's calculate its average mathematical expectation, taking into account the profitability of all trading instruments included in it and their shares. It turns out about 87% per annum.

This portfolio is not entirely experimental - it has already been successfully tested and showed a yield of almost 45% per annum. At the same time, there was no drawdown on the portfolio at all. Thus, we can conclude that the belief about the unacceptability of the foreign exchange portfolio is a myth, or if you want a stereotype that has been destroyed.

However, it is worth repeating once again - since the really long-term mathematical expectation of a particular currency tends to zero, it is better to refrain from long-term portfolios. Specifically, this portfolio operated for one month - from December 19 to January 19. The longer the term of the currency portfolio, the lower its profitability will be.

Actually, that's all, we figured out that the foreign exchange portfolio is more than a real and profitable instrument. Someone can call this a synthetic product, someone just a hedging position, since there are many more trading instruments in classic portfolios, but the essence will not change from this.

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A foreign exchange portfolio is a collection of free funds stored in different types and immune from inflation.

Making money on the maintenance of a portfolio is difficult and not entirely appropriate, because if you have the talent to predict the movement of rates, then the Forex market can bring much greater profit than keeping cash or in kind.

intellectual values;

cars and equipment;

share;
and etc.

However, the acquisition and a competent approach to portfolio compilation will not be superfluous. It happens that an investor loses a real opportunity to earn "quick money" due to the difficulty of collecting the required amount in the shortest possible time. Therefore, a portfolio is like an ace in the sleeve - it will always help, it will always help out.

How do I choose a currency?

What are the most stable worlds? This question is always of interest to many. For example:

The British brokerage company Lionstone Investment Services LTD believes that in 2014 the leaders among them will be the Canadian dollar, the Australian dollar and the Chinese yuan;

According to the research group of the World Bank Doing Business, the top 5 strongest in 2014 will be: Swiss Franc, Euro, Dollar, New Zealand dollar and Yen;

But the company The EWI Stable Currency Index, working in the field of forecasting the commodity market, claims that when compiling a portfolio for 2014, you should pay attention to: Swiss franc, Singapore dollar, New Zealand dollar, United States dollar.

I believe that when compiling a portfolio, an investor should not have any difficulties in whatever country he lives. The main source of inspiration in this case will be your own experience and additional information. One has only to turn to the search engines of the world wide web with such requests and in an hour or two enough reliable information about the most profitable currencies in the world will be collected.

It would be nice if, when maintaining a portfolio, an investor uses a previously proven and most profitable option for himself. If it is decided to correct the portfolio strategy, it should be done smoothly, without drastic changes. Before changing one currency to another, you should carefully monitor and study the movement schedule of the new one for some time. Only after that, based on the findings, you can make a decision. In no case should you completely correct the portfolio, it is very difficult to predict the movement of all quotes at once, which can lead to considerable losses.

Competitive article by Kirill Ichetovkin

Why should I, a speculator, even invest?

All professional traders understand that one of the most important factors in trading success is competent money management. Only a beginner dreaming of personal yachts and airplanes will charge half a deposit into the deal. A professional will never risk more than 1-2%. But even experienced traders often limit their money management on this, which is fundamentally the wrong thing.

Yes, we risk one percent. And what about the remaining 99% of the deposit? Will they just stand idle? Of course, more than one percent is needed for margin collateral. Depending on the trading strategy, someone needs to keep 10% of their capital on the broker's account, someone - 50%. But even in this case, half of the deposit will simply stand idle and will not bring any money. It's like keeping a "deposit" under your pillow at home.

The simplest and rather reasonable option would be to deposit funds into a bank account. Dollar deposits bring in 3% per year. Not much, but nonetheless.

Another option is investing free capital. The strategy that I will talk about and according to which we will form an investment portfolio brings an average of 20% per year.

Investment strategy

All the trading strategy I offer is based on statistics. According to a study by the Vanguard Group, investment funds with an active trading method were only able to beat those funds that simply opened a one-way deal, to buy, and held it for years only 2 times in 14 years. That is, active speculators lose much more often than long-term investors. This is confirmed by a large number of other studies. Knowing these statistics, we will follow a long-term investment strategy - opening and holding a trade.

But these investment funds have one very significant drawback: they trade only in one direction - they open buy deals. Accordingly, they will lose when opening a trade at market highs. It's just silly to buy at a very high price.

Knowing these two factors, we will build our trading strategy:

We will open deals in the long term, without worrying about market fluctuations. According to statistics, this is a more successful trading option.

We will open deals at the highs and lows of the markets. But we will sell at the high and buy at the low in order to gain a mathematical advantage.

Screen 1. My friend invested a large amount in bitcoin at a price almost at the market maximum - $ 980. Like, it has grown by 7,000% over the year !!! Although the professional understands that it was necessary to open a short here. The result was sad ...

Stock indices

Let's start building an investment portfolio from the American stock market. There are excellent opportunities for opening deals here now. Prices have been growing for 6 years without the slightest pullbacks. Now they are at their historic highs:

2. The index of stocks of high-tech companies - Nasdaq has grown continuously since the end of 2008.

Trading idea: we open deals for the sale of two stock indices - Nasdaq and Dow Jones.

Forex currency pairs

There are also opportunities for opening deals in the foreign exchange market now. The Euro / New Zealand Dollar currency pair is at its minimum. Trading idea: buying EUR / NZD.

4. EUR / NZD

On the contrary, CHF / JPY and NZD / USD are very expensive:

5.CHF / JPY

6. NZD / USD

Accordingly, we sell the CHF / JPY and NZD / USD currency pairs.

Goods

The first trading idea in this section is to sell the Fattened for Slaughter Futures. No, I'm serious. For a real trader, there should be absolutely no difference than trading. Whether it's currency or weather futures (and there are some, too). The main thing is the opportunity to make money. And futures on "Cattle" now provide this opportunity.

7. Cattle fed for slaughter

Soy flour is also at its maximum:

8. Soy flour

And the precious metal palladium:

9. Palladium

We open sell deals.

Cryptocurrencies: BitCoin, LiteCoin, NameCoin and PeerCoin

I will dwell on cryptocurrencies in more detail, since they are now very promising, in my opinion, investment tools. Let's start with the most famous cryptocurrency - BitCoin:

10. BitCoin

After exploding in 2013, this cryptocurrency has plummeted over the past year (movement A-B). At the same time, the fall stopped near the zone marked by the blue area. A very large investor appeared here: this can be seen from the rebounds from this blue zone (check mark). Look at how big the “tail” of the candlestick, which is marked with the second checkmark, is: the price reached the blue zone and bounced off it very sharply. This gives us the understanding that a very large buyer opened a deal here. And after the price returned to this zone again (the third tick), the growth began again. This means that this zone is still interesting for large investors. As, however, and BitCoin itself.

What should we do? One of the options would be to wait for the price to return to this zone and open a deal to buy BitCoin. But this will not be the minimum price, and it may take a long time to wait.

I propose another option: pay attention to other cryptocurrencies. NameCoin chart:

11. NameCoin

LiteCoin chart:

12. LiteCoin

As we can see, these cryptocurrencies also collapsed after a sharp rise. But if BitCoin after the decline has already begun to grow (a large investor entered), then LiteCoin and NameCoin are still trading at a bargain price. We open deals to buy LiteCoin and NameCoin.

PeerCoin

The last cryptocurrency I would like to consider is PeerCoin:

13. PeerCoin

The instrument is now close to its minimum. At the same time, we have already observed investor interest in PeerCoin at this price - there was a movement from point A. I think it is promising to include PeerCoin in our investment portfolio.

Profit fixation

It is important to understand that investments do not bring quick returns. Sometimes good moves happen in a few months. Sometimes you have to wait 2-3 years to close a deal in profit. But I will say again: "long-term investments are statistically more successful than short-term speculations." I will fix my trades when I reach 25% of the profit on the instrument.

Conclusion

The investment portfolio has been compiled. Its most important advantage is its great diversification. The portfolio consists of eleven completely different instruments: Forex currency pairs, commodities, stock indices and cryptocurrencies. This reduces risks and greatly increases the likelihood of making a profit.

The material was submitted by Kirill Ichetovkin and participates in. Good luck!

The cryptocurrency boom has sparked massive interest in digital coins.

The cryptocurrency boom has sparked massive interest in digital coins. They are actively traded, fortunately, with high volatility, quick enrichment is quite possible even with a completely insignificant start-up capital. With the advent of more and more digital money, investors tend to create a portfolio of cryptocurrencies in order to minimize risks and not miss out on new opportunities for generating income.

This material examines the concept of an investment cryptocurrency portfolio, the principles on which it should be created and improved. Attention is also paid to the platforms with which you can manage investments, and the risks that are inevitable when trading coins.

What is a cryptocurrency investment portfolio

The concept of an investment portfolio has been known for a long time; it is understood as a system of assets balanced in such a way as to ensure their diversification. Then you can earn income without fear that a fall in the value of a single asset will lead to ruin.

A cryptocurrency portfolio has several significant features when compared with a traditional investment portfolio:

• diversification is narrower in nature, due to the fact that investments are made only in coins, and the acquisition of stocks, metals, bonds and real estate is not considered. All assets are reduced to one, and the breakdown is reduced to the acquisition of different tokens;
• creating a cryptocurrency portfolio does not require fiddling with checking accounts and complex documentation. You only need to get an account on the exchange or a multicurrency wallet;
• to create it will not require any significant funds. The lower bar is at the level of $ 300, which led to the interest in investing in cryptocurrencies of many people who do not have capital, but intend to acquire it;
• increased volatility of assets in the portfolio and market dynamics.

The common features remain, the portfolio should be composed in such a way as to ensure a balance between reliable, promising and risky investments.

How to create a portfolio of cryptocurrencies for a novice user

What you need to build on is ensuring real diversification, which is achieved by purchasing three to nine different tokens. When making a choice in favor of a particular coin, they are guided by the following selection criteria:

• prospects. A study is being conducted to determine the existing advantages over other cryptocurrencies in terms of anonymity and speed of transactions, the presence of an original idea and the likelihood of its practical implementation in the interests of users;
• market indicators. Attention is focused not only on trading volumes and market rates, but also on behavior over relatively long time intervals. It is definitely worth investing in a portfolio of cryptocurrencies tokens, the capitalization of which has exceeded $ 100 million;
• activity of the thematic community. Such projects seem to be more attractive, especially those that offer feedback, such as an officially existing community or an open platform that invites developers;
• features of management and incentives for investors, the presence of mining;
• the nature of the news around a particular cryptocurrency. The abundance of clearly ordered materials cannot but alert, and the presence in a positive context on serious thematic forums and web sites is considered positive.

Investment portfolios are traditionally reduced to:

• conservative;
• aggressive.

For beginners, it is recommended to compile a conservative portfolio of cryptocurrencies in order to secure their investments at first, until the necessary experience is accumulated to allow them to act independently. The separation of assets is done as follows:

• the lion's share, 80%, is devoted to the acquisition of the most popular cryptocurrencies, such as BTC and ETH, which occupy the top lines in the ratings. Only as a guideline, you need to take not stock exchanges, but analytical reports in order to exclude the speculative component, which is inevitably present in stock ratings. When selecting the most popular coins, it is customary to limit it to the first twenty;
• the rest is distributed between not so popular, but quite in demand and having opportunities for further growth (15%) and inexpensive, but extremely promising in the more distant future coins (5%).

With such a scheme of asset allocation, only 5% will fall on risky ones. Even if they all turn out to be unprofitable, this will not affect the state of affairs too badly, in general. But guessing, you can make good money.

Gaining experience, investors, for the most part, begin to lean towards the formation of an aggressive cryptocurrency portfolio, in which the ratio between groups of assets changes in favor of less popular but more promising ones, and investments in ICOs appear.

This component of the investment portfolio can account for up to 15%, while the main cryptocurrencies fill 60%. The riskiness of such investment increases markedly, but it remains quite cautious, since the main place still belongs to the most demanded tokens. On the other hand, the likelihood of getting high income increases significantly due to investments in altcoins (their share is about 25%) and ICOs.

There are also several more trends in the formation of a cryptocurrency portfolio that may be of interest to novice investors (if not at first, then in the near future):

• a bet on long-term investment, perhaps, is not yet worth considering. But with the accumulation of funds, the option using the Buy & Hold strategy may well be used in relation to any project that seems incredibly promising. Incredible highs do happen, albeit infrequently, and the profitability in such cases is simply exorbitant;
• the bet on "protocol coins" can play if cryptocurrencies enter the real sector of the economy;
• special prospects are seen in cryptocurrency platforms, which put forward the original idea of ​​economic relations based on the blockchain. Many experts predict a bright future for projects such as EOS, NEM and the like.

Improving the cryptocurrency portfolio

It is much more difficult to manage compared to how to create a cryptocurrency portfolio. The general consensus is that most of the portfolio should be allocated to BTC and ETH, as the most proven and stable.

As for the remaining share, then for the cryptocurrencies selected for it, you need to be vigilant and not be afraid to abandon those that are losing perspective. It is better to do it on time and with little losses.

Investing in coins related to platforms seems promising, because they are actively trying to connect to solving real complex problems of the economy using the blockchain, as they do:

• DASH giving digital payments a new form;
• XRP by joining money transfers;
• MaidSafe doing decentralized storage.

It is worth finding a place for coins that are backed by high and stable transaction privacy assurance like the ZEC and XMR. Among cryptocurrencies, the platforms of which are reduced to the protocol level, the greatest prospects are seen from the likes of IOTA.

As for those coins on which a long-term stake is placed, such as CRYPTO20, TenX or Augur may be of interest in improving the cryptocurrency portfolio.

Portfolio management platforms

A growing cryptocurrency portfolio needs a tool to make it easier to manage. There are both sites and applications that you can use for this:

• Altpocket... A beautiful service with a user-friendly interface and support for a large number of altcoins;
• Prism... Designed for Ethereum wallet owners. In addition to performing basic operations, it is possible to display a personal portfolio in the rating, which allows you to copy more successful traders;
• Blockfolio... The mobile application supports over 800 coins with detailed data for each;
• CryptoCompare... The capabilities of the interactive platform include tracking personal investments, monitoring the market and community sentiment;
• Trackr... Convenience of a mobile application - in storing user data by the client himself, which increases the level of security and anonymity, as well as in the availability of analytical materials and the ability to test growth prospects;
• TabTrader Bitcoin Trading... De facto - a trading terminal connected with 20 exchanges and 500 coins.

Those who prefer to bring all their operations with cryptocurrencies into a single center should pay attention to the capabilities of the Alpha Cash platform, which allows:

• buy;
• create a portfolio;
• monitor its condition and make adjustments;
• receive passive income.

Potential risks

Investment activity in itself is considered risky, and in the case of markets with high volatility inherent in cryptocurrencies, the probability of incurring significant losses, as well as gaining considerable income, increases many times over. That is why coins attract investors. Many mistakes can be avoided if you follow the simplest rules for handling a cryptocurrency portfolio.

Considerable caution, for example, does not hurt to be shown in relation to cryptocurrencies that have not realized their potential, although they are showing an increase in value. These experts include, for example, BCH, ETC and LTC. It is not enough to make the right choice by forming an investment pool, it will take a lot of work to develop your own strategy, which must be adhered to, while avoiding panic attacks and enthusiastic enthusiasm in equal measure.

The portfolio must be constantly maintained in a balanced state, for which funds are redistributed:

• adhering to periodicity;
• tracking prices.

It is not necessary to invest all available funds at once, no matter how tempting the situation develops. It is also not worth selling all the coins when the rate starts to rise.

By investing in cryptocurrencies, the risk cannot be avoided, but it is quite possible to reduce it to a rationally reasonable level, preventing the occurrence of your own mistakes.