INVESTING IN CRYPTOCURRENCY: THE INVESTORS AND THE BROKER/TRADER
This content will guide you through on investment options on cryptocurrency, explain the difference between the cryptocurrency investor and the cryptocurrency broker/trader.
Reading this article simply means you already have some good and useful knowledge on cryptocurrency, cryptocurrency wallets, cryptocurrency exchanges and the basics knowledge on cryptocurrency. It also confirms that you are ready to start your journey in cryptocurrency investments.
We have given you tips on what to put into considerations before investing in bitcoins or any Altcoins of your choices. If you still do not know how, go back to our previous post on this >>Investing in Cryptocurrency 2019/ Why You Must Invest<<.
Knowing the basic things to look out for before investing will save you in this volatile cryptocurrency markets. We have also advised you on cryptocurrency diversification and why it is necessary never to put all of your capital in one cryptocurrency.
We said you can have a single portfolio but not a single investment. This means that you should have a portfolio with two or more investments in different cryptocurrency.
Having knowledge of what cryptocurrency is not enough. Acquired Knowledge is a waste if it isn’t profitable to the acquirer. How then can you utilize this system and make as much profit as possible from it?
As earlier stated, there are two major ways of making the cryptocurrency profitable and these are categorized under:
- Investors (passive and active investors)
The investors; Active, passive and the brokers/traders
The cryptocurrency investors use a certain amount of capital to purchase cryptocurrency for the purpose of holding or keeping it for a certain duration with an expectancy that the cryptocurrency price will increase in price or value. This type of investor is sub-categorized into Passive and active investors.
The active investor buys a coin, keeps it and is constantly abreast with the activities happening in the cryptocurrency markets.
The passive investor, on the other hand, has zero time to be involved with the cryptocurrency activities but will rather trust their capital with a broker for shared profits.
That is to say, Mr John has the money but doesn’t have the time or patience to learn and wait for his investments to grow. He gives Broker George, who is an expert in cryptocurrency trading to trade for him.
The two parties must agree on the percentage at which profits will be spat either weekly or monthly or yearly. If both parties come to a consensus, they sign an investment or a trading deal.
Being passive or active investors doesn’t mean one is placed above the other. Both investing options are good because no individual is the same, what suits one might never suit the other.
While the active investors seem to have total control of his finances and have zero fears of losing his or her money, the Passive investor is opened to a lot of risks because he or she is not fully in charge of his or her portfolio or capital.
The cryptocurrency brokers or traders are simply individuals who are skilled in trading one cryptocurrency against the another. These individuals are professionals who have spent time in understanding the cryptocurrency market, skilled in fundamental and technical analysis and know when to trade and when not trade, what coin to buy and have a well-organized plan or every trade with the goal of taking home as much profit from every trade.
Brokers are individuals like you. Learning how to become a skilled broker or trader takes nothing but time, emotional control, attentiveness and patience. There are blockchain and Cryptocurrency Company that trains individuals in cryptocurrency trading.
Being an investor or a broker must be your personal decision. If you feel being a professional trader will take too much than what you are willing to give out then you can decide to be a passive or active investor.
But be aware, that risk management in being a passive trader is the responsibility of the broker and that your finance is fully managed by the brother you hired for this purpose.
That is, what happens or decision the broker made be it in favour of your investment or not, you’d bear the consequences as much as the broker.
While on the other hand, being an active trader you have full control on risk management and of your finances. You are always in charge and responsible for every bad and good trade and can decide at any given time what to do and what not to do with your funds.
Investing in cryptocurrency is to be carefully done and planned out for. The volatility of the market most times can cause great loses. But always remember that for every downward movement there is always an upward movement no matter how long the downward movement is maintained.
Knowing when to buy a particular coin as an investor (keep and hold) will determine how much will be your take-home profit, and the same goes to the broker or the trader-Know your resistance and support level. It will help you in maximizing profit.
Patience holds your profit. Know when to hold on longer and when to sell-off. No trader who has fiddled with greed has ever come out of the cryptocurrency market happy.
Be in control of your emotions no matter the kind of investor you are- emotions of greed and fear especially. If you think you have your emotions in check then you are ready to be an investor in the cryptocurrency market.
All of the options provided above are good. Like we have earlier stated, it depends on the individual involved. Making recommendations or placing one above the other wouldn’t be ideal and this is so because what is good for the goose might not be good for the gander.
Be strategic and precise on what you want or how you want your investment. If you are satisfied with being a broker and making a career from it, then go ahead and learn.
But if you feel being an investor who buys or trust the brokers with his funds for profit is more convenient and safe for you, then it is absolutely all right. Always make your decisions and have good reasons for it.
Trade is a method to conserve stocks in a short period. A trader holds shares up to high performance in the short term while investing is an approach that works according to the principle of buying and holding. Investors invest their money for years, decades or even more.
The cryptocurrency brokers or traders are simply individuals who are skilled in trading one cryptocurrency against the another.
He is skilled in fundamental and technical analysis and knows when to trade and when not trade, what coin to buy and have a well-organized plan or every trade with the goal of taking home as much profit from every trade.