6 crypto trading tips you should know as a beginner
You must have come across people who have made a fortune with cryptocurrencies, right? You must also have come across some who lost their life savings on it, haven’t you? What is the difference?
Well, the difference is in how they approach the practice. Would you like to make profits with cryptos consistently? Here are some tips you should consider:
Avoid pump groups
Many beginners will join Facebook, Whatsapp, Reddit, Telegram, and other groups meant to help them in their journey. While some of these groups have valuable information that beginner traders can take advantage of, others don’t, as they are solely meant to take advantage of beginners.
Beginners will join these groups in the mistaken belief that they will benefit them, only to lose money.
The most common groups that will lose you money are pump groups. These groups pose as expert groups meant to advise the members on where to put their money.
The administrators will tell the other group members when to buy and when to sell the different cryptocurrencies. The way they take advantage of the members is to advise them to purchase specific cryptocurrencies, which they most likely have been contracted to promote.
The unknowledgeable new traders will rush to buy these currencies without knowing why they are even buying them. When the word is out about buying a given coin, the demand and price of the currency shoot in the short term, but after some time, the currency comes down, and all of those that had bought it end up losing the money.
To avoid being in such a situation, you should avoid the pump groups as much as possible. It’s okay to gather valuable information from various groups, but you shouldn’t join the pump groups as you often lose money while the group administrators make bank. It’s even worse when you have to pay for the group membership and lose your investment—talk of burning the candle at both ends.
Always research
Doing the right kind of research on the market is important because it will teach you a lot about cryptocurrencies and the world at large. The cryptocurrency market is ever-changing due to various factors such as market demand, technological advancements, regulatory developments, global economic conditions and even the price of Bitcoin can be a significant factor too, as changes in its price often have a ripple effect across the entire market. This constant evolution makes it crucial to stay informed and conduct thorough research to understand the dynamics of the market.
As it goes, when you keep researching, you will always learn something new, which you can apply in your trade. Also, research gives you an edge over other people because most people don’t put in the time to do research.
When doing your research, be cautious about how you go about it and always get the information from a reputable source.
Blogs and magazines about cryptocurrency are some of the best places to find news about cryptocurrencies. These sites have the latest news, analysis, and in-depth articles written by professional journalists.
Reputable outlets even have researchers who ensure all the information is correct before it is released.
You can also follow accounts (of crypto traders) on social media that share timely news about the cryptocurrency industry. For example, Twitter is an excellent platform for keeping up with experts and people who influence the field.
Diversify your portfolio
In the cryptocurrency market and investment in general, one of the most important things you need is a diversified portfolio. This diversified portfolio is important because it helps you make money from different cryptocurrencies.
Aside from that, it spreads the risk over more than one coin. So, even if one coin has caused the market to go down, you can still save and make money with other cryptocurrencies.
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Experts advise that you don’t put more than 5% of your money in one currency, but there is no specific way to diversify your portfolio—you need to find what works best for you. As a rule of thumb, if you can’t afford to lose the amount, don’t put it in cryptocurrencies.
Protect your investment
Because cryptocurrencies are used on online platforms, safety and security are essential to consider. You must have heard about people losing their investments after someone hacked their accounts, right?
This happens a lot, and you need to be cautious. An excellent place to start is to always work with a secure platform and wallet. Also, use security features like two-factor authentication, password double-checking, etc.
Use secure platforms
Over time, cryptocurrency trading and investing have become complex due to how volatile the currencies have become and the emergence of many trading platforms.
With thousands of companies offering services like trading platforms and the wallet, it’s hard to tell which is the right company to choose.
To stay on the safe side, take your time to research and find reputable and trusted service providers. An excellent way to go about it is to stick to Bitcoineer offiziell and other advanced top-rated exchanges and wallets.
To protect your investment, ensure that the trading platform you are using not only provides an online but also an offline platform.
Have a trading plan
You need to have a trading plan to stand out and make money.
When you hear people talking about a strategy or plan, you might have the impression that it’s a complex thing, but it isn’t. A plan is a set of rules that help you decide when to enter and leave a trade.
A plan helps you make decisions in the market without letting your emotions get in the way. It also enables you to buy or sell Bitcoin and other currencies at the best time to make money.
There are many things to consider when developing a trading strategy. These are your risk tolerance, money, time frame, and investment goals. Apart from this, you should also select an appropriate strategy, such as dual asset investment to potentially amplify your returns. Also, decide under what circumstances you will enter or leave a trade.
As a new trader, it can be hard to develop your trading strategy, so it’s okay to use strategies that other experienced traders have already developed.
Even when using a proven strategy, don’t go at it blindly—always back-test it. Here, you need to use data from the past to simulate a trading strategy to see if it will work. Only incorporate the strategy after it has worked and made you money.
