Cryptocurrency’s popularity has led to an increasing number of interested crypto investors – both individuals and businesses around the world. Being a beginner in this world that revolves around finance can be a struggle, so it’s very important to identify the ins and outs of trading to take advantage of it and acquire more knowledge regarding its essence. Before that, let’s look back at where it all began!
In 2009, the first cryptocurrency known as Bitcoin was introduced to the public. This move led to the birth of other cryptocurrencies for people to utilise and enjoy in the next few years. These other cryptocurrencies are known as Altcoins – while some altcoins were successful enough to the point that it’s almost at the same level as Bitcoin, some of these cryptocurrencies just failed to make an impact and got lost without being known.
There are millions of people in the cryptocurrency industry who started investing or trading in Bitcoin and other cryptocurrencies aiming at the same target: face the risks in the hope of potential profit. Luckily, some made it to the list of crypto millionaires, while some fell victims to the volatile nature of the market and the number of scammers and fraud online. Cryptocurrency has constantly been developing, which paved the way for people who pose as scammers to take advantage of the users.
Due to the increasing number of victims of scams and theft in the online world, automated platforms like the Bitcoin Pro website have emerged in the market to help traders. This platform connects traders to reliable brokers in the market and provides them with the best trading tools to ensure traders can do transactions completely safely. Always take time to read the terms of trading with the Bitcoin Pro website or any other chosen by you trading platform. Aside from security, it’s also important to learn how to trade effectively to earn profits. To help you, we’ve compiled 10 of the best cryptocurrency trading tips to help you approach the market confidently and trade like a pro.
1. Identify your goals
Before you enter the world of cryptocurrency trading, you need to identify your goals. This means you need to make a list of why you want to engage in trading in the first place, what are your motives or purposes to trade. Knowing your goals helps you align your strategy on how to approach or handle the market’s highly volatile nature and put it to your advantage.
2. Set a level for profit and losses
One of the most important things to know is what a trader should do when placed in a situation where you earn profits and in scenarios where you experience loss. It’s important to set a target amount where you should stop if your loss reaches this number, as this can help cut down your losses. Similarly, it can also be applied for profits – you should not be greedy and must set a level for profits too to set things on the right track.
3. Stay alert
One of the most common reasons why cryptocurrency traders fail in the industry is the fear of missing out (FOMO). Most people view cryptocurrency trading from outside the box and instantly assume that they will surely earn profits – which is not the true status of crypto trading. It’s important to stay alert in these kinds of situations.
4. Keep track of your assets
Be wise enough to avoid just staying stable and aim for gathering small profits and be on crypto trading regularly, but instead take the risk of making massive profits. Know that it is recommended to invest a minimum in your portfolio in a market that has less action.
5. Learn to manage risks
When you study the cryptocurrency market, you will notice that most of the prices of altcoins greatly depend on the current market price of Bitcoin, which has a highly volatile behaviour. With this, it’s important to note that when Bitcoin price rises, altcoins’ value falls or vice versa.
6. Market cap > Affordable price
One common mistake that newbies make when buying a coin is they immediately settle for a coin with low prices. The truth is, this decision should rely a little on affordability but more on a coin’s market capitalisation. It’s better to use a coin’s market cap to choose or decide to invest than to choose a coin for its price; the higher the coin’s market cap, the more suitable it is for utilising as an investment for crypto trading.
7. Observe crowd-sales
Initial Coin Offering allows startups to offer crypto enthusiasts an early chance to invest in their idea through a crowded sale. This gives the chance to buy tokens at the lowest price and sell them at higher prices during the trading season. Keeping an eye on the team behind this project and analysing their ability to fulfil their promises is important.
8. Study price charts
Most Altcoins lose their value after a certain time, so it is important to understand that when choosing to buy Altcoins, be sure not to hold on to them for too long. The daily trading volumes are the best indicator for a long-term investment moment. With this, it’s essential to learn how to read price charts to observe the behaviour of the coins and highlight the various price spikes.
9. Diversify your investments
One of the best ways to tackle and handle the volatile nature of cryptocurrency is to diversify your investments. When Bitcoin loses value against its competition, it affects all other coins’ value as well, and vice versa. However, diversifying your investments can be a great technique for surviving the cryptocurrency market.
10. Play smart
Lastly, the most important tip that you must always remember relies on your mindset: play smart with a calm mind. All the information you’ve researched and skills you’re practised are nothing if you approach the market without thinking. There are ups and downs in crypto and among all the other tips, having a concrete plan is the most effective way to tackle the issue – which can be executed properly with a calm mind.
Trading in cryptocurrency can be effectively profitable if approached with the needed level of knowledge about how the crypto market works and the skills needed to have a free-flowing journey to a successful career. The list above contains ten recommended tips that investors must incorporate when trading cryptocurrency.