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It’s a luck-based game that you’ll probably lose. Does this mean that you shouldn’t even consider investing unless you’re an expert? No. New investors can build wealth and experience, but it takes more than just going by vibes and hoping for the best. Here are a few tips to help you build a portfolio that can grow steadily and ideally mitigate what risks you come up against. 1. Create a Trading Plan The first mistake a lot of people make when they jump into crypto trading is that they don’t have a plan to start with. If you just get some money and buy some random currency, you might make money out of it, but you’ll probably just lose what you invested. Instead, make a crypto trading plan. Set goals for yourself and make some ground rules before you start trading. For example, you might set goals for: Day trading profits Passive income Long-term investment growth Asset diversification Goals like this allow you to work out a path to achieve what you want, rather than blinding buying and hoping for the best. You also want to determine what risks you’re willing and not willing to take, and stick to your ground rules. Finally, you can choose a trading strategy. Popular strategies include day trading, scalping, and buying and holding, but there are a few more to explore and choose from. 2. Understand Red Flags The first thing to be aware of is that investment, especially crypto currency investment, is risky. The easiest way to mitigate these risks is to develop an ability to identify and avoid red flags. These might include: Sellers trying to rush you Insubstantiated claims of good performance Pump and dump schemes A poor or nonexistent creator reputation You might miss out on a few good opportunities by being cautious with where you invest. But you’re much more likely to miss out on some pretty major issues, such as schemes designed to get loads of investors and take their money before dumping the stocks and selling fast. Unfortunately, there are plenty of scammers in the crypto-currency market, so learn their tricks and how to avoid them. If something seems to good to be true, it probably is. 3. Only Invest What You Can Afford to Lose Investment is a far better way to build wealth than savings account, but this comes at a price. You can always lose what you invest. Except for very rare situations (like real estate investments), you should never take out a loan to invest in anything. This is because if your investment goes poorly, you essentially put yourself into debt. If you’re already in debt, pay off your debts before you invest. Always use liquid funds that you can afford to lose before making an investment, especially if you’re going to invest in a high-risk venture like cryptocurrency. But what about people who seem to live entirely off credit and net worth? It is possible and viable to do this, but you should bear in mind that these people are usually worth millions, if not billions. It’s definitely not a strategy for people new to investing, because you can bankrupt yourself just as easily as making it big. 4. Dollar-Cost Averaging One strategy that some people find very effective is dollar-cost averaging. This is a great way to combat the inherent volatility of the crypto market. Essentially, it automates your investment so you can make regular, small investments that spreads out your purchases. This means that the amount you pay isn’t dominated by market timing. This is a long-term investment strategy that works great for beginner investors who want to slowly build up a portfolio without taking on a lot of risk at once. 5. Focus on Major Cryptocurrencies If you want to reduce your risk when investing in crypto, the best bet is often to focus on the big, more established players. Bitcoin and Ethereum are often much safer to invest in than smaller, newer cryptocurrencies that move about more violently. They’ve already proved their worth, surviving through market cycles and downturns, and have multiple financial products that use them as a foundation. This isn’t to say that there’s no risk in these investments, but it’s a good place to start. Once you are more established, you should start to look into newer, more promising and active prospects. 6. Invest With Your Mind, Not Your Heart The hype train can be very dangerous when it comes to cryptocurrencies. Always stay objective, even if your friends are jumping on a bandwagon. You should never invest due to vibes, FOMO, hype, or even memes. Instead, invest boringly. Make sure whatever information you’re investing based on is accurate. If it comes to it, don’t be afraid to cut your losses if an investment you thought was a sure deal falters. 7. Keep Your Investments Secure Unfortunately, crypto-currency can be vulnerable to theft. So make sure you store your holdings somewhere secure. A hardware wallet or a trusted crypto-custodian can keep your assets safe from potential hackers. You should also have a recovery phrase that’s kept somewhere safe and offline. This makes it much harder for anyone but you to access it. 8. Crypto-Accounting Software As you build a more complicated portfolio, with potentially multiple wallets and different types of assets, you should consider using crypto-accounting software to help you keep track of your investments and your income. This gives you accurate financial data and full coverage of your transactions and chains, so you can know exactly what’s going on in your portfolio no matter how complicated or extensive it might get. This also helps you to spot financial gaps and keep accurate books for compliance. This is a contributed post.