If you are a new trader, then there is a good chance that the world of cryptocurrency seems confusing. You are definitely not alone as every new trader feels the same way. In fact, even experienced cryptocurrency traders have been known to make mistakes from time to time. The key to successful crypto trading is to be prepared and know what to do and when. As long as you do that, there is a good chance you will be able to achieve the goals you have set, provided they are realistic.
In case you are wondering how to get started, here are some things that you need to do to prepare yourself:
- Learn to overcome Fear, Uncertainty and Doubt (FUD)
Learning how to overcome FUD is one of the most crucial things that every trader must know before they enter the world of crypto. Fear, uncertainty and doubt are all emotions and they can play a vital role in determining your success in crypto trading. However, it is important to remember that there is no magic formula that you can use to overcome FUD. The key is to learn to listen to your knowledge and gut, rather than listening to others. You should not follow the trends blindly and always do your own research before you make decisions.
- Diversify your portfolio
‘Don’t put all your eggs in one basket’. It is an old saying and it is very much applicable in cryptocurrency trading. When you are getting started, you need to research more than one cryptocurrency that you want to trade. This doesn’t mean that you spread yourself too thin, but the fact is that you are highly likely to have more success when you are trading more than one cryptocurrency. Leading cryptocurrencies like Bitcoin, Ethereum and Ripple are all good choices, but consider other altcoins that might also be profitable. Brokers like Solid Invest enable their clients to invest in a lot of other altcoins.
99% of the traders and investors who succeed in the cryptocurrency market do because of HODLing. HODL means to hold onto your coins, which means that you hold onto them even when the market dips. You shouldn’t sell up because with HODLing, you can achieve a much more profitable result in the long run. Instead of selling off, it is better to wait out bear markets by HODLing and then make informed decisions later on instead of just getting rid of your cryptocurrency.
- Invest what you are ready to lose
This point is of the utmost importance. You should never invest more money in cryptocurrency trading than an amount you are willing to lose. Maxing out your credit cards, taking out a loan or putting yourself in any other form of financial problem is a bad idea. It is just a recipe for disaster and you should never trade with more money than you are comfortable with. Cryptocurrency trading comes with its risks and you should always be ready for a negative outcome.
- Don’t get caught up in scams or schemes
The cryptocurrency market is mostly an unregulated one, which means there is plenty of room for scammers to find marks. You should avoid brokerages and schemes that promise you instant riches in the market. You have to learn trading skills in order to earn the kind of profits they are promising. Reputable brokers, such as Solid Invest, do provide trading tools, signals and other indicators, but they never give any guarantees about 100% returns through every trade. You should learn how to perform analysis in order to make better trading decisions.
- Do your own research (DYOR)
One of the common terms that you will come across in the crypto community is Do Your Own Research (DYOR). It is quite self-explanatory, but is also a strong reminder that traders should always do an investigation into a cryptocurrency before they buy it or start trading it. The good news is that the internet provides you access to a horde of resources that you can use for this purpose. You can find various websites, blogs and forums where you will come across the latest crypto news and you can use it for expanding your knowledge.