In a recent article posted on business magazine Forbes, Senior Contributor, Clem Chambers was quoted as saying, Cryptocurrency is the new gold, and as the days pass, this phrase is becoming more accurate in possibility.
When gold was first listed in the public market for trading, the public went on a trading rampage, and soon gold became an asset worth possessing.
The same pattern can be traced to the launch of Cryptocurrency. While for the first couple of years, no one noticed its presence, soon people started investing money into it, and before we knew it, Bitcoin and its siblings had become an overnight success worth thousands of dollars.
These days, cryptocurrency trading has become relatively popular, and almost everyone has something or the other to share about how to master the same.
But not all the tips and tricks are made the same, and thus in today's article, we will share with you some of the most innovative tips and tricks to help you up to your cryptocurrency game.
Behind Every Success There Lies a Motive
While this may sound like a cliche tip, you must realize the importance of having a motive before you start trading cryptocurrencies.
Similar to other trading markets, crypto is a zero-sum game. What this entails is that, when you win, someone else loses and for every win of yours, there is a corresponding loss attached to the same.
The cryptocurrency market is heavily regulated by big-time players and or whales who either sell or buy a large number of shares from the market. And for them to make a profit, other amateurs, and new entrants into the market, need to make an otherwise avoidable mistake.
Thus it is always advised that you decide if you want to become a day trader or a long term trader and choose your options accordingly, because only with an ulterior motive can you increase your chances of scaling your profit margin.
Learn When to Stop
In any form of online trading, be it in assets, currency, commodities, and Cryptocurrency, there is a prevalent concept of stop loss.
What this means is that you predetermine a marker where you will pull out of the draw irrespective of the fact that you are making a profit or loss.
Although this trait is extremely rare in traders, learning this early on will help you reduce your losses and also increase your profit margins by a significant amount in the long run.
In modern emoticon linguistics, FOMO is the abbreviation for Fear of Missing Out. Most traders, especially beginners and amateurs, will have a constant fear that if they don't participate in every trade, they will miss out on something epic.
But what research and statistics have proved is that having the patience and the will to sit down, research and find the correct trade to invest in is what matters.
If you take a close look at the big investors and or players in the market, you will realize that they don't invest in every trade. Instead, they will invest in select ones, which will pay off high returns in the long run.
This is the art of trading that every trader should follow blindly.
Similar to any other trading market in the world, the cryptocurrency market is heavily volatile, and the effect of the same can be understood by analyzing the key market factors.
For example, in the cryptocurrency market, the value of the Bitcoin determines the overall volatility of other altcoins. When Bitcoin prices go up, the amount of different coins comes down and vice versa.
From the very beginning, if you have a fair idea of how the volatility of the market works, you can sway your trades according to the same and thus make sure that you earn a substantial amount of profit.
Only Invest What You Can Lose
There is an old saying which goes, trading in the stock market is a glorified form of gambling, and to this day it holds.
No matter how patient you are as an individual, your deep research skills, or your ability to scape out great trades, it is almost inevitable that you never lose a trade.
What we need to understand is the fact that any market runs on human emotions, and thus, it is nearly impossible to predict accurate market movements every time.
Therefore as an investor, you are always advised only to invest what you can afford to. Don't spend more than your risk appetite. While it is good to have a taste for taking a loss, it is never a good idea to put all your eggs in the same basket.
Divide and Rule
If you google trade in Cryptocurrency any day, the first result that you will get is the option to trade in Bitcoin. A little bit of research will lead you to the fact that Bitcoin is the trendiest altcoin out there and all other coins are pale in comparison.
But if you want to make it big, you need to think out of the box. As the legendary investor, Warren Buffett, once said, when everyone else is buying, I sell and when everyone else is selling I buy. Try to follow this strategy and invest in other altcoins as well.
Be it Ethreum, Lithium, Ripple or anything else, diversify your investments into multiple holdings and assets, so that if one crashes, the others survive as your backup.
As mentioned in an earlier point, the cryptocurrency market is one of the most volatile there is. Somedays the value of a coin will increase by 30%, while on others it may fall by over 40%.
As an investor, as we see the benefit of our profits rise, the greed inside us to reap an extra 10% profit also grows. But it is essential to realize that the profit increase that we are expecting might not be reached at that particular day.
Therefore, while on the rise, it is necessary to pull out and subsequently plan for re-entry if you feel a need for the same.
And always remember, too much greed does more harm than good.
Follow Your Gut
In the first days of your investing journey, you will be more inclined to follow the advice from market experts or the so-called gurus. But it is always advisable that you do your research, make your analysis and at the end, follow your gut before investing your money, cause at the end of the day it is your hard-earned that you are spending.
Trading in Cryptocurrency can be hugely profitable for anyone if done correctly and while following a system.
Using the tips and tricks mentioned above, you can quickly and efficiently make your way up the trading ladder and earn a substantial profit in the long run.
All the best!
Harikrishna Kundariya, a marketer, developer, IoT, ChatBot & Blockchain savvy, designer, co-founder, Director of eSparkBiz Technologies. A Mobile App Development Company. His 8+ experience enables him to provide digital solutions to new start-ups based on IoT and ChatBot.
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