Sunday, March 3

Financial Tools For Better Crypto Investment Decisions

Whether or not you believe in luck, it would take more than charm to be able to succeed in crypto trading with the help of a trustworthy platform like the Yuan Pay Group. You will also have to be smart in making decisions that could make or break your chances of reaping great returns. Here are some financial tools that may come in handy. 

Financial Ratios

The goal of any investment undertaking is all about earning some passive income. And how will you know that you have earned enough? You may want to make use of some financial ratios used in analysing how a project has performed so far. There are several ratios that you can use in determining the level of success or failure of your endeavour in numerical terms. It would be useful to be familiar with some of them.

One of the simplest financial ratios you can use is the return on investment. This would tell you the percentage of earnings against capital. If you have realised $15 gains from your $30 capital in a year, then the return on investment is 50%. It is a simple ratio that would be useful in determining your gains in proportion to your capital. You can always rely on this tool when it comes to measuring profitability.

Ultimately, the return on investment would make you realise whether the holdover period was worth it. This is why you should take note of this financial tool to assess your income. As much as possible, you should keep a record of your earnings for future data analysis. 

Data Comparison

When you have the results of the financial ratios, you may want to do a comparative analysis. This involves two sets of data for purposes of comparison. For instance, two sets of return on investment data would tell you the increase or decrease in returns. The base year would always be the previous year, so you will know the point of comparison. An increase would mean better performance, while a decrease would go the other way around.

The computation is fairly easy. You will have to subtract the data on the base year from the current year. The difference would reveal an increase or a decrease in value. To check the percentage, you will have to divide the difference with the data on the base year. Some would prefer looking at the percentage increase or decrease for a better perspective. 

Remember that cryptocurrencies are highly speculative. It is important to know the difference in your performance between the current year and the previous one. Somehow the results would give you an idea of what to expect. Most likely, a variance would help you pinpoint what went wrong with your investment. An increase in one aspect of the dataset and a decrease in another will show you a story.

Trend Analysis

The trend analysis tells you what is going on over several periods. It is used in comparing data over a range of three to five years. Be that as it may, you can use it in assessing the progress over several months.  This would give you the short-term trend, which is not too bad if you are still a beginner in crypto trading. You can take it from there before assessing the long-term trend. At least you would know better by that time.

In computing the return on investment, you can do it over different periods. Feel free to compute quarterly, monthly or yearly to gauge the profitability per month and per quarter. This would tell you which term has been profitable in your crypto trading activity. It might give you a hint on what you should do the following year. 

By all means, you can do the trend analysis using data from other financial ratios. The trend is best illustrated using a line graph to see the fluctuation of data from time to time. It would also help you easily interpret the behaviour of data. 


These are only a few of the financial tools you can also apply when you engage in crypto trading. You might be new in this process, but there is no harm in trying. At least your decision would be guided by numbers the next time you make one.

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