Investing in cryptocurrency and learning how to do cryptocurrency trading is a skill and trade worth learning. Cryptocurrencies are the future and it’s a very good idea to get into this new reality early.
But like with any kind of trading – stocks, currencies, commodities – there are things you need to know to ensure that you go in prepared and avoid pitfalls and literal costly mistakes.
Here are some them.
You’re going to be investing in cryptocurrency – which has a lot of value. This means you need to be aware of your online security at all times. A lot of people tend to forget this essential tip when they begin cryptocurrency trading, but it’s the most important thing you should do first.
Ensure that your email address is always secure. Use a very strong password that will be hard to crack – and preferably use a unique password that you won’t use anywhere else. Activate two-factor authentication as an additional layer of security. Don’t ever store your passwords in a place that can be easily opened or stolen.
The popularity of cryptocurrency trading has resulted in many trading platforms entering the market to capture the growing number of cryptocurrency investors. The sheer number of choices can be quite overwhelming especially for someone who is new to investing in cryptocurrency. But there are some things you can use to narrow down your choices.
First, choose a platform that has a good reputation among investors. Usually, the most popular platforms are the more reliable and safest in the market.
Also, read up on the security features being offered by the platforms on your shortlist. Two-factor authentication should be a basic feature. Also, look for additional security features like custodial storage services.
Most novice traders would usually store all of their cryptocurrencies on their chosen trading platform/cryptocurrency exchange. This is a huge no-no. Time and again, the people who have their cryptos stolen by hackers and thieves are those who never remove it from the exchange.
As a general rule, you should only keep what you are going to trade with in the platform. That’s cryptocurrency trading 101. Investing in cryptocurrency doesn’t mean you have to put everything in the exchange. Transfer it to a more secure location if you’re not going to trade it.
Cryptocurrency trading, or any type of trading, does not rely on your feelings or intuition. You need to perform analysis. If you’re going to be serious about investing in cryptocurrency, learn how to do fundamental analysis and technical analysis.
These will help you in making more informed decisions on your trading and ensure that you’re more likely to get more trading wins instead of losses. There are many websites that offer trading analyses reports to traders. Read them and learn.
When learning technical and fundamental analysis and using them for your trades, only use them based on your own abilities. Start with the basics first. Don’t be tempted to use complicated strategies. First, it will be overwhelming for someone new to cryptocurrency. Second, there’s a big chance you’ll make erroneous trading decisions because it’s beyond your capabilities.
One of the most important pieces of advice given to any trader is to just invest and trade what you’re prepared to lose. Investing in cryptocurrency is not a sure-fire way of doubling your money. It is still a risky investment.
Therefore, you shouldn’t put all of your money in it. Always be aware that you’re bound to lose what you’ve put in as investment so only invest what you’d consider to be disposable money. Cryptocurrency trading is highly volatile so always tread carefully.
This advice is related to the advice given above. Let’s say you’ve done well with your first few trades. You’ve seen some returns on your investment. Don’t get tempted to invest more and dip into your life savings just because you’ve become confident.
Also, don’t start making rash trading decisions just because you’re seeing your trades performing well. Remember to always be a cautious trader. This is the only way you can gain more investment wins.