One of the most popular financial markets to trade on right now is cryptocurrency. This is a market which encompasses a wide selection of digital coins which you can invest in and make money from if the price goes in your favour. Of course, trading on the world’s financial markets is not something to be taken lightly and you must know what you are doing to avoid losing all your money. The great news is that there is plenty of basic information to get started with on the internet or in print media. If you are looking for a few extra tips in addition to this though, we have rounded up the ten most amazing bits of crypto trading info to get going with.
10 – Keep An Eye On Bitcoin
Most people will know all about Bitcoin when it comes to trading crypto. In fact, this could be the only coin they have heard about at all! While some other digital currencies have gotten more attention lately, Bitcoin is still the biggest around. This means that it is worth keeping your eye on what Bitcoin is doing, even if you are not thinking about trading it. Why is this though? The Bitcoin market lets you know how volatile the whole Crypto market is in general at the current time and what kind of mood it is in for your trading session. As the dominant digital currency, what Bitcoin does often affects other alt-coins in terms of price movement too.
09 – Set Stop Losses and Profit Targets
This is actually a great tip in any form of financial trading as it can really help limit your losses on bad trades and make sure you get the most from winning ones. It is certainly something worth thinking about in crypto trading to achieve the same goals. Of course, you may ask why not just close out trades manually when you need too? The problem with this is that human nature will see you cutting winning trades short and letting losing ones run – which is the opposite of what you need to do. Setting pre-defined targets where the trade will close (whether it goes up or down) helps to avoid this and can make you more successful in the long term.
08 – Avoid FOMO
FOMO is also known as Fear of Missing Out. It has gotten popular in modern culture generally but is directly applicable to crypto trading as well. Many traders simply get too sucked into what they could be missing if not in a trade or what they might miss if they do not jump into a trade right now. This is something to resist as giving into FOMO can see you end up on the wrong end of multiple losing trades. There is nothing wrong with taking your time and being totally sure before opening a trade – the market will always be there, so you will not miss out on anything in the long run.
07 – Think About Trading Alt-Coins
We have already mentioned Bitcoin and the fact that it is the cryptocurrency most people know best. This can mean many crypto traders only trade in Bitcoin and do not go any further than that. This can be a real shame as there are many, many other alternative coins (also known as alt-coins) to dabble in. From Litecoin to Ethereum, it is worth looking around the market to sniff out trading opportunities and other coins to make money with. If the Bitcoin market or price is not doing it for you, this can give you other ways to make money.
06 – Don’t Buy Coins Based Only On A Low Price
When you open up your trading software to take a look at the markets, you may see coins that are available to invest in at a low price. This can seem a no-brainer as it fits into the holy grail of crypto trading – buy low and sell high. However, there is actually no guarantee that a coin which is currently available to buy into at a low price will rise automatically. It may never climb or, even worse, it could drop further! The decision you make to invest in a coin should not be based on it only having a low entry price – you should carefully study the market first to ensure it is likely to rise in value. By the same token, you should not buy coins based on how affordable they are to you. A cheap coin is no good if it loses you money and does not provide a return on your investment. It is much better to buy less of a more expensive one that you expect to perform.
05 – Be Prepared For Volatility
If there is one thing that all crypto traders need to be aware of, it is market volatility. While different coins have different volatility levels, all could turn pretty quickly and leave you wondering what just happened, if you were not ready for it. The major coins like Bitcoin are particularly known for being pretty volatile at times. This is where taking measures like setting stop losses come in handy. By preparing for market volatility, you can ensure it does affect you too much and not let it wipe out your account.
04 – Be Careful With ICO Investment
There is no doubt that investing in ICO’s can seem attractive to many crypto traders. Also known as Initial Coin Offerings, it basically gives you chance to invest financially in the startup of a new digital currency. The payoff for helping get it going is that you get a certain amount of coins at a low price, before they go to market. The general idea is that when the coin hits the general market its price will go up and you will make serious money. It is possible to do this but you must do your research into any ICO and the team behind it first. There have been ICO scams in the past so be careful before parting with any cash.
03 – Keep Your Emotions In Check
Trading digital currency is at its heart an emotional activity as you will be investing real money into it. While this cannot be avoided, it really is wise to keep control of your emotions when trading. Doing this will help you to make calm, rational decisions and not rush into trades which lose you money. All successful traders are able to master their emotions and it will serve you well to do the same over time.
02 – Make a Plan
Another great crypto trading tip to help master the markets is making a trading plan to work from. Once you have typed it up on your computer, print it off and have it next to you when you trade each day. This will mean you constantly have it in your eyeline and are reminded to follow it as you go. Your plan should include things like how much you will risk per trade, how much profit you plan to make on each trade, what coins you are interested in and how you will find trading opportunities. By writing out and sticking to your plan, you will be setting yourself up for more winning trades.
01 – Manage Your Money
When it comes to trading digital currency, many people think it is all about reading charts and putting trades on. While this is definitely a major part, there is also a lot more to it as the above shows. One really key thing to focus on is managing your money well so a few bad trades does not wipe out your trading account. Be careful of how much you risk on each trade and always make sure that you protect the money in your account.
So, there it is! An awesome set of tips to help with your journey to becoming a top crypto trader. They can really help you learn more about what it takes to trade digital currencies and also help you grow as an investor in this market. Whether it is purely Bitcoin or you decide to diversify into alt-coins, our tips can help you do it all that little bit easier.