The internet is full of tips and investment rules for trading cryptocurrencies, but the truth is, no one can give you a complete strategy. The crypto market, like most other markets, is far too dynamic and unpredictable. Don't blindly trust people when they tell you which cryptocurrency to buy. Always do your own research.
After reading this piece of advice, you will have a better understanding of crypto trading, and you will know how to improve your chances of making a profitable cryptocurrency investment.
Any investment or trade is risky. The profits from the past are no guarantee of future profits - only risk capital that you are willing to lose.
We have made a selection of some useful tips that will help you navigate the crypto market safely and with confidence.
Start trading cryptocurrencies with a small investment
One of the first rules for any kind of trading or investing is never to invest more than what you can lose without going bankrupt. The market is exceptionally volatile, which means that large price fluctuations can occur within days, hours, and sometimes even minutes.
It's safer to invest a tiny percentage of your money when you are starting out. In that way, you will be able to familiarize yourself with the market.
When you start trading bitcoin and trading other cryptocurrencies, watch out for trading "spikes."
One possible scenario is that there is a lot of people depositing considerable amounts over the weekend, which will not be credited to their accounts until Monday. Many of these people buy a lot during the day; it can temporarily increase the value of cryptocurrencies and other cryptocurrencies dramatically.
Diversify your investment
Don't put all eggs in one basket, meaning diversification of your crypto asset is of utmost importance. By diversifying your assets into different cryptocurrencies, you reduce your risk, as each cryptocurrency has different cycles.
Don't hesitate to look into other investment options like gold, silver, or the traditional stock market.
Another good idea is not just to spread your investment over different assets but also to smooth them out over time.
Keep track of market movements
Educate yourself by keeping track of community developments and fluctuations in the crypto market. Check the real-time value of digital currencies. Look for some altcoins that have a large daily exchange volume and have an active community. Check out the piece/project on popular social media like Twitter and Facebook. Some communities also have (sometimes unofficial) discussion groups on Telegram, Slack, or Discord.
Don't make rash decisions
Trading under pressure and emotions is, by far, one of the worst things you can do. The fear of missing out on purchases (or FOMO) can be a real killer, especially when you see a coin going up quickly and buying at a high price, then it drops, and you panic sell at a loss.
Patience can be very beneficial unless you have a good reason (based on your own research) to believe that this is an excellent opportunity to buy or sell.
Monitor the creation of new "blockchain projects"
Some companies offer real solutions in various areas, but many sell nothing but hype, and it is very often difficult to tell them apart. Many companies are ICOs (or initial token offerings). It's a crowdfunding strategy where you buy your tokens with the expectation that they will grow in value. Never invest your money in tokens without doing the proper research. Otherwise, you will only buy promises.
Don't fall for the hype when trading cryptocurrencies
Although the crypto community works for the common good, some people want to make a quick buck through fraud and misrepresentation (or scams). The easiest way is to create some hype in online discussion forums, to increase the coin's price and sell their coins at a higher price.
Many of these forums' users are just inexperienced and gullible as you may be, so it is a good strategy to follow your good judgment and objective information based on your research.
Choose a good cryptocurrency broker
A crypto broker provides financial service for those wanting to trade cryptocurrencies. You must carefully check information about [crypto brokers] before choosing one. Every crypto broker charges some commissions for offering the financial services for exchanging the cryptos via its platform. Crypto brokers offer a crypto traders suitable environment for beginners on the crypto market looking to buy Ethereum, Bitcoin, Litecoin, or any other cryptocurrency. Via crypto broker, you can also exchange fiat money against the chosen cryptocurrency.