Evaluating The Risk-Reward Ratio In Crypto Investments

Risk prize assessment in cryptocurrency investments

The world of cryptocurrencies has a family that a meteoric rose in the latest headers and them will grow to an unprecedented level. Howver, this trend was also an Amatheur investors who can take part in the action. While in people he has significant profits investing in cryptocurrencies, others have salt significant amounts. One of the key factors that the investment defines is what tiking on the disk is
Risk prize indicator .

In this article, we will delve into the concept of the risk prize factor and provide the compressing EVA evagization? investments.

What is the risk factor?

The risk prize factor is simple, but tools that help investors assess the potential return on investment (roi) a city involved in assets. This is calculated by dividing a potential reward or profit by a potential loss or risk. And IT, the reward to the indicator indicates that more than a dollar invested for each invested dollar.

How to assess the risk in cryptographic investments

To evaluate Rique Ratio in cryptocurrency investments, follow the steps:

— capitalization, a volume of rotation and talking as you like.

• ** Choose a cryptocurrency with a high risk reward They are directed to assets.

• For example:

* If you have $ 100 and you expect 10% roi, your potential profit would be from USD 10.

* To calculate the prize indicator, divide the potential profit (USD 10) according to the initial initial (100 USD):

+ 10% / 100 = 0.1 or 10%

• Assessment of a potential loss

  : Calculate a potential loss, multiplying the investment amount by the level of abandoned risk (e.g. a 20%decrease).

* For example, if you come up with $ 100 and want to reduce Hirsk by 50%, the amount of the message is better.

* To calculate the ratio of the risk prize, share the potential loss (USD 50) by the initiated Ammunt (100 USD):

+ 50% / 100 = 0.5 or 50%

• Consider market conditions : It should be remembered that Mark’s conditions can change significantly by affecting the ratocs. For example:

* If the prices are highly variable, this is more difficult for the future of the mine.

* If you are in cryptocurrency with large market capitalization and trade, you can have possibilities.

Example: investing $ 100 in Bitcoin *

Suppose we want in Bitcoin. We define our investment criteria as the purchase of the first 10% of supply (28 million coins) at the current brand USD 20,000 per coin.

• Our initial investment is 100 USD.

• Our expected roi will amount to USD 2000 (20,000 x 0.1), translates into a ROI of 200%.

• If we decrease from the desired level by 50%, the new investment amount would be 50 USD (10% of these).

• To calculate the prize indicator, divide the potential loss (USD 50) by the initiated Ammunt ($ 100):

+ 50% / 100 = 0.5 or 50%

Application*

The risk reward indicator is a key tool for assessing, calculating ROI compared to the desired level of risk, you can inform the decisions about informing about investing.