Learning the friendly way

Whether you're engaging in trading or investing, mastering risk management is crucial for your financial journey. It's about ensuring your hard-earned money is protected and your decisions are well-informed. In this article, we'll delve into the importance of risk management and discuss five essential strategies to consider.

What is effective risk management and why is it important?

Effective risk management is a vital process that assists individuals involved in investment and trading in recognizing, evaluating, and addressing potential risks associated with their activities.

Essentially, it enables investors and traders to make well-informed decisions, optimize outcomes, and pursue sustained financial well-being despite fluctuations in the market. It's crucial because it safeguards your assets and enhances decision-making. By proactively identifying risks, you can implement measures to protect your resources and mitigate potential setbacks. Employing these risk management approaches equips you with an efficient set of tools to minimize risk within your investment portfolio.

The 4 pillars of a risk management strategy

Any established risk management process encompasses these four primary methods:

Accepting risks

This means being aware of and willingly taking on the risks associated with an investment without pouring extra resources into avoiding them. It's a smart move when the potential loss isn't too significant.

Transferring risks

This method entail shifting the burden of risk to a third party, typically for a fee, thus reducing direct responsibility.

Risk avoidance

After doing a risk assessment, opting not to invest in assets with potential risk altogether eliminates the chance of facing potential losses.

Risk reduction

Diversifying your portfolio across different assets or industries helps minimize the financial impact of risky investments, providing a more balanced and protected risk strategy approach.

The four pillars of risk management - acceptance, transferring risks, risk avoidance, and diversification - are crucial components of a robust risk management strategy, vital for safeguarding investments.

5 risk management strategies to implement

Below we will explore five essential risk assessment strategies that will empower you to make informed decisions and protect your investments. They also provide the answer to the burning question: why is having a reliable risk management strategy important?

1. Set both stop-loss and take-profit points

A stop-loss order sets a predetermined price for an asset at which the position will close. The stop price is set below the current price and, when triggered, helps protect against further losses. A take-profit order works the opposite way, setting a price at which you want to close your position and lock in a certain profit.

 To better explain this risk strategy let's assume you purchased a stock at $100 per share.

Stop loss: You set a stop-loss order at $90 per share. If the stock's price drops to $90 or below, the stop-loss order will trigger, and your position will automatically be closed, helping to limit your potential losses.

Take profit: You set a take-profit order at $120 per share. If the stock's price rises to $120 or above, the take-profit order will trigger, and your position will automatically be closed, locking in your desired profit.

Stop-loss and take-profit orders help you manage your financial risk in two ways. First, they can be set up in advance and will be executed automatically. There's no need to be available 24/7, and your pre-set orders will be triggered if prices are particularly volatile. This also allows you to set realistic limits for the losses and profits you can take. 

It’s better to set these limits in advance rather than in the heat of the moment. While it can be strange to think of take-profit orders as part of a risk management strategy, you shouldn't forget that the longer you wait to take profit, the higher the risk the market could fall again while waiting for an additional upside.

2. Have an exit strategy in place

An exit strategy is a predefined plan for investors and traders to exit their positions and leave their investments or trades. It's vital as it safeguards capital and reduces potential losses. 

With a clear exit strategy, decisions are objective, avoiding emotional biases and market fluctuations. It also ensures timely profit-taking, preventing missed opportunities and significant losses from holding onto investments too long. 

Using exit strategies like limit orders helps maintain discipline and rationality, avoiding impulsive decisions driven by emotions such as greed or hype. By implementing an exit strategy, traders can navigate the markets with a level-headed approach.

3. Diversification implementation

Diversification is a crucial investment strategy that involves spreading your investments across different assets to manage risk effectively. By diversifying, you can reduce the impact of market volatility on your overall portfolio. 

Investing in various asset classes, such as stocks, bonds, real estate, and commodities, ensures that your portfolio isn't overly dependent on a single asset's performance. This minimizes the risk of significant losses during market downturns. 

To create a well-diversified investment portfolio, consider factors like risk tolerance, financial goals, and time horizon. Allocate your investments strategically to achieve a balanced and resilient portfolio that can weather various market conditions.

4. Use the 1% rule

The 1% rule is a risk management strategy where you limit the amount you risk on an investment to just 1% of your total capital. For instance, if you have $10,000 to invest, you'd avoid risking more than $100 on a single trade. 

To implement this rule, you can purchase $10,000 worth of a stock or cryptocurrency and set a stop-loss order at $9,900, limiting potential losses to 1% of your total investment. Alternatively, you could invest $100 in a stock without a stop-loss order, ensuring a maximum loss of 1% if the asset's price drops to zero. 

This rule is applicable across all investment types, however, it is more important in volatile markets as it prevents excessive risks and potential heavy losses due to greed or high expectations.

5. Position sizing and risk-reward ratio

Position sizing and risk-reward ratio are fundamental concepts in effective risk management for investors and traders. Position sizing refers to determining the appropriate amount of capital to allocate to each trade, considering the risk tolerance and total portfolio size. By sizing positions correctly, investors can minimize the impact of potential losses on their overall portfolio.

Calculating the risk-reward ratio involves assessing the potential profit against the potential loss for each trade. A favorable risk-reward ratio ensures that potential gains outweigh potential losses, increasing the probability of overall profitability.

Balancing potential gains and losses through appropriate position sizing and risk-reward ratio is crucial for achieving long-term success in the financial markets. By aligning these factors, traders can optimize their trading strategies and protect their capital while seeking profitable opportunities.

In conclusion

ffectively managing risk is considered crucial for investors and traders aiming for financial success. By incorporating these five diverse risk management strategies, you can potentially navigate the markets and safeguard your investments.

Manage risk by embracing diversification to potentially mitigate the impact of market volatility, set stop-loss and take-profit points to automate risk management, and establish a clear exit strategy to potentially secure profits and minimize losses. Adhering to certain principles, such as the 1% rule, may be considered to potentially avoid excessive risks, and understanding position sizing and risk-reward ratios may be beneficial to potentially optimize trades.

It's worth noting that each individual's financial situation is unique, and it may be advisable to consult with a licensed financial advisor to receive personalized guidance and recommendations tailored to your specific needs and goals. With these tools at your disposal, coupled with conducting thorough risk assessments and vigilant risk monitoring, you will better prepared to navigate the ever-evolving landscape of finance.

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RFID (radio frequency identification) credit cards are payment cards that use radio frequency technology for contactless payments. While the technology has been around since 1973, these cards have only recently gained increasing popularity, with many major credit card issuers offering RFID-enabled cards as the default option. The rise of RFID credit cards has been driven by consumer demand for faster, more convenient payment experiences.

You can spot RFID credit cards easily by the unique logo on the card, resembling a Wi-Fi symbol. This icon indicates that the card has RFID technology that allows contactless, tap-and-go payments. Seeing this logo, consumers can swiftly identify RFID-enabled cards, distinguishing them from traditional magnetic stripe cards.

How RFID credit cards work

RFID technology in credit cards is designed to allow for quick, convenient contactless payments. So, when buying an item you simply need to tap or wave your RFID-enabled card near a payment terminal, which initiates the card's embedded RFID chip to communicate with the reader using radio frequency signals. 

This wireless communication allows the reader to securely access the necessary payment information, such as the card number and expiration date, without physically swiping or inserting the card. Exchanging this data over a short distance facilitates fast, frictionless transactions for consumers.

Compared to traditional card insertion or swiping techniques, this wireless payment method significantly streamlines the checkout process.

Security features of RFID cards

RFID credit cards offer strong security to prevent fraud and theft. They use advanced encryption protocols to protect payment data, ensuring it stays safe during transactions, so even if the signal is intercepted, the information remains unreadable to unauthorised parties. 

Additionally, many RFID credit cards feature built-in anti-skimming technology to prevent card information from being illegally accessed or cloned. These security measures provide customers with peace of mind when making contactless payments.

RFID credit cards vs traditional magnetic stripe cards

RFID credit cards offer significant advantages over traditional magnetic stripe cards. With contactless payment capabilities, RFID cards provide a more secure and convenient payment experience. The wireless, encrypted communication between the RFID chip and the reader helps prevent fraud, as card data is less exposed compared to magnetic stripe cards that require physical swiping. Additionally, RFID transactions are faster and more seamless, reducing checkout times for consumers.

As RFID technology continues to mature and become more widely adopted, it's expected that RFID credit cards will become the new standard. Consumers are increasingly demanding the speed and convenience of contactless payments, and merchants are rapidly upgrading their infrastructure to accept RFID transactions. The migration towards RFID credit cards is a clear industry trend that is likely to accelerate in the coming years.

RFID credit cards and contactless payment methods

RFID credit cards are just one type of contactless payment method, which also includes mobile wallets and wearable devices. While these all leverage wireless technology for faster, more convenient transactions, RFID credit cards offer a uniquely familiar payment experience for consumers.

Compared to mobile or wearable contactless options, RFID credit cards provide the same familiar feel as traditional cards, with the added benefit of quicker, more secure transactions. However, mobile wallets and wearables offer additional functionality, like the ability to store multiple payment cards digitally. 

Ultimately, both RFID credit cards and other contactless payment methods are driving the shift towards a more seamless, frictionless payment landscape. Consumers now have more choice than ever when it comes to fast, convenient ways to make purchases.

Benefits of using RFID credit cards for payments

Using RFID credit cards offers numerous benefits for both consumers and merchants. The tap-and-go convenience of RFID payments streamlines the checkout process, reducing transaction times compared to traditional swiping or inserting cards. This increased speed and efficiency can be especially advantageous in fast-paced environments like quick-service restaurants or transit systems.

Moreover, the enhanced security features of RFID cards, such as encrypted data transmission and anti-skimming technology, help protect against fraud. Businesses that accept RFID payments report reduced incidences of chargebacks and improved customer trust. 

Overall, the combination of convenience and security makes RFID credit cards an attractive payment option for consumers and merchants alike.

Closing thoughts 

In conclusion, RFID credit cards are revolutionising the payment landscape by offering a more convenient, secure, and streamlined payment experience for both consumers and merchants. As the adoption of this technology continues to grow, RFID credit cards are poised to become the new standard in the credit card industry.

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At Tap, adaptability and innovation define everything we do. Operating across the EU, EEA, and the UK, we’ve built a reputation for offering cutting-edge fintech and crypto solutions while continually striving to adapt and innovate in response to evolving regulations. But the road isn’t always smooth—sometimes, regulatory changes demand that we rethink, adapt, and find creative solutions to stay true to our mission.

Today, we’re thrilled to announce the return of XTP token locking for Premium accounts in the UK—a journey that wasn’t without its challenges, but one that reflects our unwavering commitment to our users.

A Challenge Worth Tackling

Last October, the Financial Conduct Authority (FCA) introduced new regulations aimed at tightening the promotion and distribution of cryptocurrency services. These rules, while important for safeguarding the sector, directly impacted the structure of our Premium accounts. 

For our EU and EEA users, accessing Premium perks like lower fees, higher card spending limits, cashback rewards, and VIP support is as simple as locking a specific amount of XTP tokens for 12 months. For our UK users, regulatory requirements led us to suspend this system to ensure compliance. Determined to continue offering UK users access to our Premium perks, in its place, we introduced a new structure: Premium upgrades through a fixed annual fee paid in GBP.

This interim solution allowed us to continue offering UK users the perks they loved, but it wasn’t the ideal experience we wanted for our community. Restoring XTP locking for the UK became a top priority.

Behind the Scenes: A Year of Dedication and Perseverance

When the change rolled out, many users understandably voiced frustration. Some felt we weren’t doing enough, unaware of the monumental effort happening behind the scenes. The reality? Our team embarked on a year-long journey deeply immersed in research, consultations, and legal review to align our XTP locking system with the regulatory requirements in order to craft a compliant yet user-centric solution.

This wasn’t a quick fix. Every step of the process—from analysing legal frameworks to liaising coordinating with relevant stakeholders required time, expertise, and meticulous attention to detail. We don’t take shortcuts, and we don’t settle for half measures. At Tap, we focus on outcomes, not just promises, we channel our energy into quietly, diligently achieving results.

A Moment of Triumph: The Return of XTP Locking

After a year of hard work, we’re delighted to reintroduce XTP locking for Premium accounts in the UK. This marks a return to the system our users value—one that aligns perfectly with our broader offering across the EU and EEA.

For those who upgraded to Premium with the GBP annual fee, our dedicated support team will personally reach out to guide you through your options and ensure a seamless transition. We’re committed to ensuring this transition is smooth, positive, and tailored to your needs, giving you the best experience possible.

The Road Ahead

This journey is a reminder of what makes Tap unique. We don’t just adapt in the face of complex challenges; we embrace them as opportunities to grow and innovate. We’re proud to bring back a feature that resonates deeply with our community, and we’re more excited than ever about what lies ahead.

We’re proud to bring this chapter full circle and thank every one of our users for their patience and trust. Here’s to the next step forward—together.

We’ve all been here: you land that dream job or get a nice raise, and suddenly your old budget feels unnecessarily restrictive. A few premium subscriptions here, some fancy dinners there, maybe a nicer apartment – before you know it, your higher income somehow feels tighter than before. 

Welcome to lifestyle creep, the subtle way our spending habits expand to match (or exceed) our growing income. It’s real, and it’s out there. Here’s how you can fight back. 

Why it happens

Lifestyle creep isn't just about splurging. Often, it's a series of small, seemingly reasonable upgrades. That €15 lunch delivery doesn't feel extravagant when you're having a hard day, and those €20 fitness classes are justified as a worthwhile investment in your health. 

The problem isn't any single expense, it's how these small changes compound over time, transforming from luxuries into what feel like necessities. And those small expenses can add up dramatically: an extra €50 per week on conveniences means €2,600 per year that could have gone toward retirement, a dream vacation, or your emergency fund. That’s a chunk of change in the end. 

Breaking the cycle

1. Find your motivation

Before making changes, identify why you want to control your spending. Maybe you want to switch careers, start a business, or build an emergency fund. Having a concrete “why” makes it easier to resist those immediate gratifications.

2. Audit your joy

Review your recent expenses and honestly assess which ones truly enhance your life. That streaming service you barely use? The subscription box that sits unopened? These are easy cuts. But don't stop at the obvious – examine everything, including your "necessary" expenses. Sometimes what we think we need is just habit in disguise.

Start doing this weekly, eventually moving up to monthly, until your inner accountant is completely satisfied with where your money is going. The idea here isn’t to strip all joy from your life, it’s merely to streamline it. 

3. Create friction

Make impulse spending harder:

• Remove saved payment information from shopping sites and phone settings
• Unsubscribe from marketing emails
• Establish a 48-hour waiting period for non-essential purchases

4. Address your triggers

Our spending habits are heavily influenced by our environment. Consider:

• Unfollowing social media accounts that trigger spending urges
• Finding free or low-cost alternatives to expensive social activities
• Being honest with friends about your financial situation and goals
• Planning social activities that don't revolve around spending

5. Regular check-ins

Schedule monthly "money dates" with yourself. Review your spending, celebrate wins, and adjust your strategy. Make it enjoyable – pour yourself a drink and put on your favourite record. This isn't about punishment, it's about alignment with your goals.

The mindset shift

Remember that reducing expenses isn't about deprivation, it's about choice and control. You might find that some lifestyle upgrades are worth keeping because they genuinely improve your quality of life. Others might be easy to let go once you realise they're not adding that much value.

The goal isn't to return to living like a college student. Instead, aim to be intentional about which upgrades you keep and which you can live without. This mindful approach to spending helps steer your money toward things that truly matter to you, rather than disappearing into a series of forgettable purchases.

By taking control of lifestyle creep, you're not just saving money – you're buying yourself options, flexibility, and peace of mind. And those are luxuries worth keeping.

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Bitcoin and other cryptocurrencies are all about decentralised, worldwide, financial independence and liberty. Cryptocurrencies are borderless, censorship-resistant digital currencies that can be used by anybody with internet access. 

As a result, crypto, at least in principle, appears to be the perfect solution for international travellers or "digital nomads." With the added advantage of having the Tap app, users can instantly and seamlessly use their cryptocurrencies as they would regular fiat currencies when travelling around.

With the growth rate of blockchain technology and crypto adoption increasing, it's only natural that we're seeing more options to spend and travel the world using cryptocurrency.

In this article, we'll look at a variety of different ways to spend your crypto while travelling with Tap and how to spend seamlessly with your Tap card. We will explore why people choose to use their crypto to travel and how the exploding $1 trillion travel market is important for the cryptocurrency industry. 
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Entirely Cashless

‍The beauty of travelling with crypto is that it is entirely cashless. You won't have to worry about dealing with foreign currency exchanges when entering or leaving a different country as all of your money is kept digitally online in your app. 

With the Tap card, users can use their crypto balances to load their card and freely swipe away worldwide. The card allows for seamless payments at millions of merchants around the world, with the merchant none the wiser. 

The option to upgrade to more premium accounts allows you to reduce or completely eliminate any FX fees. Get empowered and enjoy the best out of your money wherever you go.

Reduces Risk

Instead of being a target for muggings looking to steal cash, being entirely digital bypasses this risk.

Accessible

Should something happen at home you can easily and quickly send funds back. Operating 24/7 and only requiring an internet connection, sending money back home can be completed at a moment's notice. Send funds to your friends and family via crypto or fiat for free on their Tap account. 

Discounts

Last but not least, many companies offer discounts to users paying with cryptocurrencies. From travel to retail, and everything in between, users can enjoy added discounts just by utilising crypto. 

Should an event arise that you do need cash, users can easily withdraw cash from a regular ATM using their Tap card. Paying significantly lower fees than you would with your standard bank card, the Tap card allows you to seamlessly integrate into the foreign country with peace of mind. 

How To Travel Abroad With Tap

This is the ultimate crypto vacation guide showing you how to buy everything that you might need through the Tap app for that epic crypto vacation abroad.
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Flights

CheapAir.com was the first US online travel agency to open its doors to crypto, getting into the game as early as 2013. The company currently allows holidaymakers to make payments using Bitcoin, Litecoin, Bitcoin Cash and Dash.

In 2020, Travala and Expedia merged to give users access to millions of hotels and villas worldwide payable in over 30 popular types of cryptocurrencies. There is also Destinia.com in Spain, airBaltic in Latvia, Surf Air in the US, and Peach Aviation in Japan.

Conveniently buy everything you need with your Tap app by scanning the company’s QR code and confirming the transaction. Alternatively, you can make online purchases using your Tap card. 
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Accommodation

Travala, CheapAir.com and Destinia all allow users to book flights and accommodation in one smooth transaction. On Destinia look out for the GoCoin merchant plugin.

Booking.com has partnered with flight planner, A Bit Sky, to provide a location with both flight and accommodation options.

Savvy accommodation-seekers can look to Airbnb-style crypto startups like 99Flats in India or CryptoCribs on Reddit, or head over to XcelTrip,a decentralized travel ecosystem, which provides access to 400 airlines and 1.5 million hotels.
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Food and Drink

CoinMap is an app for anyone and everyone wanting to find crypto-friendly companies. Felix Weis, as well as numerous other cryptocurrency influencers, has credited CoinMap with being the saviour for finding the closest cafe, bar, or restaurant that accepts Bitcoin, including international chains such as Subway and local providers who use crypto merchants. Say goodbye to walking around with boatloads of cash and just take your Tap app along instead. 

Holidaymakers can also look to using crypto to buy a gift card which can be purchased online through Gyft or eGifter, with eGifter offering a 5% discount for purchases made with Bitcoin. eGifter offers gift cards to restaurants like Papa John, Taco Bell, Dunkin’ Donuts, TGI Fridays, UberEats and more.
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Getting Around

Expedia, A Bit Sky, Destinia, and CheapAir all offer access to transfers or car rentals in their services, while Gyft and eGifter offer Uber vouchers. There is also SpendBitcoin.com, which locates different crypto-accepting services in an area, simply chose the car filter option.
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Things To Do

Again, Gyft and eGifter provide access to options like Groupon where you can find local activities on offer, or head to purse.io for any last-minute Amazon purchases (snorkel, anyone?).
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Travel The Tap Way‍

Both the Tap card and the Tap app can provide a seamless and cost-effective solution to using both fiat and cryptocurrencies when travelling. Simply load your wallet with crypto and fiat currencies, and pay directly from the app or use the card to pay at millions of merchants around the world. Say hello to easy travel and plenty of discounts. 

With a range of coins on offer and an integrated smart engine that ensures the best possible prices in real time, travelling with cryptocurrencies and Tap is as smooth a ride as it gets.

With a range of coins on offer and an integrated smart router, Tap lets you store and manage your digital assets wherever, whenever. There are no border delays or inconvenient payment processes to worry about while travelling with crypto only speed and convenience. Tap is as seamless a journey as it gets. 

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We are pleased to announce the reintroduction of our locking feature for users in the EU/EEA territories. By locking XTP and advancing to higher tiers, users can now access a diverse range of benefits. This upgrade reaffirms our commitment to delivering meaningful enhancements to our users, optimising their experience within the Tap ecosystem.

About XTP Locking

XTP locking is an innovative feature within the Tap app ecosystem, crafted for our savvy users seeking premium perks. By locking XTP tokens, users can unlock increased limits on their Tap Prepaid Mastercard and take advantage of reduced crypto exchange fees and FX fees. Upgrading is a straightforward process: simply choose the plan that suits you and enjoy enhanced perks for a secure 12-month period while your tokens remain safely locked.

The benefits of XTP locking  include increased spending limits on the Tap Prepaid Mastercard, reduced transaction fees, and access to exclusive perks that making the Tap experience even more rewarding.
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✨ The perks of our premium plans

• Boost spending limits on the Tap card
• Enjoy reduced crypto exchange fees
• Experience lower FX fees
• Get cashback on card purchases
• Access special rewards and promotions
  

📈 Discounted Trading fees using XTP

In addition to the exciting relaunch of XTP staking, we are reintroducing a key utility of the XTP token - the ability to pay trading fees within the Tap App. This means that users in the EU/EEA region can now resume paying with XTP, to cover their trading fees, availing themselves to an enticing 25% discount in addition to the benefits included in their current plan.

• Utilize XTP for trading fees
• Enjoy a 25% discount
• Maximize your savings while trading on the Tap platform
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This enhancement not only provides added utility to the XTP token but also enables users to save significantly on their trading activities, creating a more cost-effective and rewarding experience.

🙌 Embrace the XTP Revolution!
Experience the latest upgrade for EU/EEA territories: Tap locking is back. Whether you're a seasoned trader looking to optimize your experience or a newcomer eager to explore the benefits of locking, you can now access exclusive perks and save on trading fees.

Step into the future of finance with the Tap App, where locking means savings and open the doors to valuable rewards.