As the Bitcoin price gets higher and higher, many more people are interested in trading cryptocurrencies.
So here are some short tips to help you out in the world of crypto!
1. Start Small
First of all, when you just started trading, it is important to not put too much money into it. You should invest little money into crypto and start trading for fun playing around and learning what to do and what not to do.
A good trader reached success with experience so it is important to start small. Even if you’ve been an investor in traditional markets, you shouldn’t be too confident getting into crypto.
The cryptocurrency market differs in that the assets are much more volatile and the liquidity is generally lower. So traditional investors may also run into certain problems trying to adapt to the crypto market.
2. Establish profit targets and stop loss level
Investing in crypto coins is riskier than any other investment, so it is wise to plan when to get out during trading. Knowing when to leave to help you minimize your losses is one of the best skills for a trader.
On the other hand, you should also plan when to leave the market after reaching specific gains. Greed can lead you to great losses afterwards.
3. Learn About Crypto Volatility
As we’ve already established, crypto coins are the most volatile assets. Knowing why crypto-assets are so unstable and what causes this will be a great advantage for a crypto trader.
Knowledge about crypto volatility can help investors make more accurate short-term predictions and also distinguish reasonable forecasts from optimistic opinions. Being aware of the market is always an advantage for traders.
4. Don’t trade on emotion or rumors
This mistake is mostly done by newcomers, who don’t do their research and buy assets only because of hype.
When you buy a certain crypto coin, you should have a motive and an understanding of the coin. Making rash decisions or following another trader’s words blindly will either make you a victim of a pump-and-dump scheme or
5. Use The Right Wallets
This is a very important point since it focuses on the security of your digital assets. Crypto wallet hacks are nothing new and they aren’t very rare either, so you need to keep the safety of your coins a priority.
One of the golden rules for crypto is that most of your funds should be stored safely in a hardware wallet. These are the safest way to keep your coins, however, day trading with hardware wallets is very challenging.
This is why online wallets, better known as hot wallets, are used by day traders. These storage spaces provide you with easier access, but it is highly discouraged to keep long-term crypto holdings in hot wallets.
6. Risk Management Is Your Best Friend
Cryptocurrencies, compared to traditional markets, are the fastest way to make profits. However, the higher the returns, the riskier the assets and the risky assets usually have lower market caps.
If you want to become a successful crypto investor, you shouldn’t chase extreme profits in the crypto world. Instead of putting fewer resources into coins with low liquidity is much more advisable. Just invest in a couple of coins like Bytom, Qtum, Cardano and enjoy your crypto trades.
7. Track Your Portfolio
When trading crypto assets you most certainly use several exchanges, wallets and coins. This can become very confusing as your portfolio expands. Tracking your crypto portfolio will help you in improving your trading strategy, managing your coins and making better decisions in the future.
It is for this reason that many crypto investors turn to crypto portfolio trackers in order to manage their funds more efficiently. If you aren’t sure how to use these tools or which one to use for that matter, check out this comprehensive guide on crypto portfolio management.