Why do you lose in dollars but gain in cents? 🧐 A breakdown of the sister's wallet issue and a solution to a conundrum many newbies face! 💡📉
Today, I stumbled upon the sister's question: "Why do I lose in dollars but gain in cents?"
This problem is super common, and the reason behind it relates to risk management and the quality of the coins. Here’s the simplified explanation so you don’t fall into the same trap:
🚨 1. Investing in high-risk coins (Alpha):
The coins shown in the picture are early project coins and their volatility is intense. We see that the UB coin dropped by 33.91% and the NEX coin fell by 35%. When these coins dip, they quickly pull the wallet value in dollars down.
📉 2. Distributing a very small capital:
The sister allocated $32 across 5 altcoins, which means that each coin gets around 4$ to 5$ only. When one of these coins rises by 1% or 2%, the profit will just be a few "cents" that you don’t really feel, while the drop of the other coins by 35% eats up whole dollars.
Golden tip:
Don’t scatter small capital: If your capital is under $100, don’t spread it across 5 or 6 risky altcoins. Focus on one or two strong coins.
Stay away from emerging tokens at first: As a newbie, focus on leading coins with high liquidity to avoid a sudden drop of 30%.
Learn the math: Profit and loss are calculated in percentage (%) not in dollars and cents.
Today, I stumbled upon the sister's question: "Why do I lose in dollars but gain in cents?"
This problem is super common, and the reason behind it relates to risk management and the quality of the coins. Here’s the simplified explanation so you don’t fall into the same trap:
🚨 1. Investing in high-risk coins (Alpha):
The coins shown in the picture are early project coins and their volatility is intense. We see that the UB coin dropped by 33.91% and the NEX coin fell by 35%. When these coins dip, they quickly pull the wallet value in dollars down.
📉 2. Distributing a very small capital:
The sister allocated $32 across 5 altcoins, which means that each coin gets around 4$ to 5$ only. When one of these coins rises by 1% or 2%, the profit will just be a few "cents" that you don’t really feel, while the drop of the other coins by 35% eats up whole dollars.
Golden tip:
Don’t scatter small capital: If your capital is under $100, don’t spread it across 5 or 6 risky altcoins. Focus on one or two strong coins.
Stay away from emerging tokens at first: As a newbie, focus on leading coins with high liquidity to avoid a sudden drop of 30%.
Learn the math: Profit and loss are calculated in percentage (%) not in dollars and cents.