There are two basic strategies that are used most often in cryptocurrency trading and investing. The most common is simply day trading and buying low and selling high, keeping funds all in BTC and only briefly in any Alt coins. Some will try to not even stay in BTC, and just use that briefly for trading and moving it back to fiat. That is a viable strategy, but it is not what I personally use and not what this guide is about. Nor is this about Bitcoin maximalism and only holding Bitcoin, but again, that is also a viable strategy and recommended for people starting out.

This is about buying and holding for the long term using a mixed portfolio of Bitcoin and Alt coins, cryptos change and long term may not always mean the same thing to everyone, but at least months and perhaps years is what I am referring to here specifically. For those just starting out I recommend just getting some Bitcoin, and then researching various popular Alt coins for a long time before buying any, there is no rush despite what trolls might tell you in troll boxes. Popularity can be determined by Slack channel population, Bitcointalk threads, Volume, bots trading, buy support and many other factors.

Using a combination of these elements, doing the research, and spending the time reading as much as you can stand, asking questions, it is fairly simple to determine which are popular and which are just quick money grabs. When you are ready to take the higher risk of Alt-coins, I suggest avoiding anonymous developers unless they are very well known and trusted. Some of the only known exceptions are Monero and Aeon, they have anonymous devs but with years of proving themselves to be reliable and trustworthy. 

I also suggest avoiding new coins entirely as it takes at least several months for price discovery, and new coins can sometimes drop so much they are only worthy of day trading, not buying and holding. In rare cases, some ICOs can be purchased and will increase in price by simply holding, but more often than not the ICO price is close to the maximum value and not worth the risk. As hopefully you are being careful and buying only Alt coins with proven charts and price discovery that is realistic, it is then far easier to determine the low prices with charts. 

Technical analysis has limited effectiveness in cryptos as the overall market caps have so little liquidity and volume that they can change dramatically with news and developments, but overall it is still useful for knowing when the price is already at a point of euphoria, or too high, or if the price is low and at a point for smarter investors to consider. In the above image, I am showing my current allocations. I try to always keep some Bitcoin as I do use it as a currency and for paying bills, and it is needed to buy Alt Coins, and of course, "you never know..." 

I am one of the founders of Expanse, so I am very positive on the project long term as I know that it can retain some popularity, and this example is just what I am holding long term, and not the only good choices. I have traded for years so I have a much lower allocation to Bitcoin than many traders might, but when the Alts I own do go up, the overall gains are much higher. Generally the more you have in Alts the greater the risk, but the greater the potential rewards. Bitcoin rallies will depress Alt prices, but if Bitcoin prices are dropping or moving sideways, then Alts start to rally. This pattern has repeated constantly and is undeniable. By having a mixed portfolio all bases are covered.

Going more into my personal example, I normally keep about the same in Expanse and Bitcoin, and then I have a couple other projects I own based on the low market cap and solid devs. Aeon is by a Monero dev and very low market cap, so I feel it is low risk and high potential rewards. Nexus is by Colin Cantrell, a friend of mine, and I am almost certain he will never give up. It is one of the most interesting Alts out there, and while neither Aeon or Nexus are traded on Poloniex or major exchanges now, they are safe enough on the smaller exchanges and could potentially move to larger exchanges in the future. If they ever do, then 10x gains are likely and much more popularity.

My smallest position is also my most risky, Zclassic, but the lead developer has great business experience and the market cap is so low, I think it is worth the small risk. 20x gains are possible if it works out, if it fails, then at least my position is small and not much is lost. So, overall you can see I try to maximum rewards and minimize risk. I only buy what I believe devs will never give up on, people that care about their community and care about their reputation. I have learned the hard way many times trusting anon devs, trusting those seeking money grabs, but those days are over. I will only buy and hold the best, and that way I am far less likely to end up holding cryptos that will never go anywhere. 

James Clayton December 22 2016  (Note: added Ethereum, Monero and Pivx since)