Cryptocurrency trading is a term that is so popular these days. Lots of people are trading fiat against crypto or crypto to crypto. Reports regarding the status of the market keep floating around, and traders are looking out for buy or sell signals. Most often, fees are charged to explain basic cryptocurrency trading terms.
Cryptocurrency trading has grown so vast that fees are charged for the information. You will have to pay to attend a seminar or for courses that may help you understand how crypto trading works. While most of this information is essential and could help in the spread of crypto knowledge, it isn’t free. However, if you are new to the trading game, we have compiled some of the best cryptocurrency trading tips for you.
Before we launch into trading tips that will help you make the best of the market as a crypto trader, there is some necessary information you need to know. First, you have to determine the kind of cryptocurrency trader you want to be. There are options for trading crypto-to-crypto, fiat-to-crypto, day trading, Scalping, Intra-Day Trading, Swing Trading, Position Trading, and Investing.
You should take into consideration your level of risk and your availability to monitor your trades when choosing a trading style. Once you have picked your trading style, you are set for more tips to take you on your crypto trading journey.
Invest What You Can Afford to Lose
One of the lessons would-be investors should take home from the bear market of 2018 is to invest what you are willing to lose. Seeing the crypto boom of 2017, a lot of investors went into the market rashly. Most people took high investment risks and were burnt when prices came crashing. This is why it is important that you learn how to minimize risks in crypto trading.
Diversify Your Portfolio
Altcoin traders understand the importance of having a diversified portfolio. Buying coins with potential and holding them until they increase is a way of diversifying your portfolio. For instance, the growth rate of some crypto coins is higher than that of bitcoin. So you can expand your portfolio to accommodate other currencies.
Avoid the Greed Trap
One of the problems a lot of traders face is the belief that a coin can still go higher. Let’s say you invest in a cryptocoin and it grows 50%. There is always the greed that you can get more out of that coin. The truth is that you have already made a 50% profit which is higher than your initial investment. You should cultivate the habit of taking profit and then reinvesting in the coin if you still want to get potential profits.
Do Your Research on a Coin Before Investing
Avoid jumping blinding into a trade. A lot of people are throwing out cryptocurrency signals blindly, and you might invest in a coin and make a loss because of the lack of due diligence. Therefore, before investing, check the historical data of the coin, the team behind the coin, and the community. Never go into a trade blindly. Also, ensure that you follow the cryptocurrency trends and news as this might influence market prices.
Note: While monitoring the news in the cryptosphere beware of FOMO and FUD as most news is just set to trigger these emotions in you.
Protect Your Investment with Stop-Loss, price ticker, and Trading Bots
Setting a stop-loss is one way to safeguard against loss as a cryptocurrency trader. After buying a coin, setting a stop loss will help you not to lose your initial investment. Also, if you are trading on an exchange such as Binance, you can only set your stop-loss, you cannot fix your Take-Profit. This is why you will need a price ticker that will alert you when the price of the coin fluctuates. You can also invest in a trading bot that will automate the trading process for you.
Furthermore, as a cryptocurrency trader, you have to be quick on your feet. Learn from any possible mistakes you make and be ready to forgive yourself. These tips are not stative, and they can easily change, and that is why you must have information at your fingertips. So, are you ready to launch your career as a cryptocurrency trader, you can try your hands out at our USD-to-BTC Trading at Bitmama. Now, you are prepared to start trading with these best cryptocurrency trading tips.