RE: CryptFolio - Here's How To Protect Your Portfolio In These Downward Trends Markets...
Thanks for the question Tiff :)
Stop losses are definitely a good way to minimise your losses. However, you have to be careful, they are by no means guaranteed at the price that you set it at. You can lose a lot quickly by doing this. I believe this is why some people lost SO much money in the recent flash crash of ETH. Also, if the ration you use is, for example ETH/BTC, if both coins are dropping in value, setting a stop loss can be extremely complicated as the coins will keep losing value but the ration may never be triggered!
That's certainly a good method, going into fiat removes your exposure to the losses of course, but Coinbase (the exchange I use for injecting fiat) usually sells at a lower price, so unless you move early it won't work; thus Bitcoin is usually the best option. What you describe is called shorting, and does work, but only if other coins drop further than Bitcoin. If you're adamant on buying back into a specific alt you can also lose money by trying to time the market, but that's a risk you take for the opportunity to make more of your chosen alt.
For now, Bitcoin always seems to drop less than the market average so it is almost a safe haven. Although there are a number of events occurring towards the end of July and beginning of August which could change all of this!
Let me know if any of this doesn't make sense and I'd be happy to go over it :)
I upvoted commment but Haha I think I've upvoted too much.
But yeah, I was thinking either that or if you sold a currency that only dropped a little bit to buy one that really crashed hard, then hopefully in the day or two after the one that crashed hard would hopefully rebound a bit stronger as it might have been more over-sold than the one you sold. You'd maybe come out ahead with more coins in the other currency, which benefits the long game?
Yeah I appreciate the upvote :) but it may be weakening your Vote Power too much, especially if you upvote regularly :)
That's definitely a possibility. Although it usually would only work if the fundamentals of the cheaper coin were good; not everything will bounce back from a dip. Importantly as well, even if it does recover, it may take a long time to do so. At which point you either have to recognise a loss, sell and move on, or sit it out which could mean you lose out on the potential profits you could have made elsewhere.
It's a tricky thing to do!
Yeah I have been super active this last day and upvoted a lot of content. Is there like an amount of upvoted I should try to limit myself to?
And yeah I'm torn between shopping for some DGB on sale or putting it into steempower. I think the steempower probably might be better longterm.
That's great though, you're using the platform, that's always good :) Yeah there is, there's a thing called voting power, that needs to be at 100% to give the full power of a vote. Each vote reduces the power; although off the top of my head I don't know the exact mechanics of it sorry. There's loads of steemit articles on it though, try a Google search :)
Steempower is good but, and I think it's a massive but, you need a LOT to have any real impact, and you also have to lock it away for pretty much 2 years. Unless you've got a few spare Bitcoins I've always considered it better to invest. Entirely up to you though, I read somewhere you get interest on Steem Power, so if you're super confident Steem will increase it could be wise.
As for DGB I hold some myself, but I'm not aware of anything that would make me double down on it. Do you know if there's any news coming out soon?
The only thing a stop loss is going to do is get your order filled as the hedge funds controlling price can likely see the prices where stops are concentrated. That is indeed what happened to ETH last week. "Luckily" for those who did not use stops price recovered to $350+. The otehr problem with stops is that there is a very small window for sell orders to get executed through. Because the exchanges are so inefficient they might only be able to handle 25 sell orders at any given price out of the 250 orders that have had the limit sell triggered. In a fast market selloff, if price stays doooown, it is conceivable that someone with a stop set at say $250 on ETH would have ended up with the $13 if that's where price stayed until the Chinese mining machines matched up the buyer and selller. Crypto trading is certainly a way to eliminate your wealth very quickly as many will find out soon I'm sure.