Introduction
The top trending topic nowadays is cryptocurrency trading. It is being discussed and posted on nearly every platform. It is the topic of discussion amongst many people as the awareness of the profits and benefits that cryptocurrency provides is rising dramatically. Recently, a lot of platforms have published reports in which the fluctuation of market prices was discussed. Many platforms are very quick to point out the problems in the cryptocurrency markets, whereas they do not bother to investigate nor help in finding solutions.
Those who do provide help and show support to the users of the market ask for money in return, and this happens in the form of seminars or even courses. So we thought, why not compile a list of tips that would help users go a long way in the world of crypto trading. This would be an appropriate medium for any type of trader, and there is no sort of limitation. In this article, we have discussed the tips that would help any trader deal with the market even when the prices seem to be too low. It will also shed light on the cryptocurrencies you should avoid due to the volatile nature and the ones you should trade during the day.
Some people may think that tips are not useful and that this will just be another article that only provides general information. But you are wrong. These tips will save you from losing coins. And why is that important? Because losing coins is one of the biggest disappointments one can experience in this field. And it is the best to be avoided. So you have to keep in mind that if you want to earn a lot of profits through trading, then you have to pay a lot of attention. Staying committed is extremely important as it will only benefit you.
When you have certain goals in mind, and you stay committed, then you will be eager to learn and trade in the most profitable and beneficial way. Those who are driven by their goals manage to equip themselves with so much knowledge and skills that help them perform better in the market. You will know down below how important certain skills are during trading. So read these tips carefully and implement them within your trading field so that you see better results even when the market does not seem so promising.
Some Tips You Should Remember While Trading
First Tip: Clear Motive
This may come off as such basic and common advice, but it is crucial if you want to succeed in the trading market. So the first thing you have to do is keep a very clear goal in mind. This should include your reasons for choosing to trade cryptocurrencies, why you want to start and what you plan on getting from it. These goals and clear objectives will help you to stay committed to your decisions. Your goal can be anything, but you need one so that you remember it when trading. Another thing to keep in mind is that loss is inevitable in cryptocurrency trading as one person always loses and one always wins.
Whale is the name given to the people who operate and control the cryptocurrency market. There is not a lot of difference between ‘whales’ and those who keep lots of Bitcoin in the order books of the market. But these whales are extremely patient, and that is the quality that pays off well because by being patient, they come across many people to mess up during trades. This can be me, or you as whales seek out innocent traders. But the minute someone messes up all of the money is then theirs.
This teaches traders that it does not matter what sort of trader you are, be it scalper or day trader, you have to make sure you do not rush the process because even if you do not gain anything from the trade, it is much better than losing everything. And the history of market analysis has clearly shown that sometimes it is best if you do not get involved in certain trades. And that would count as profiting.
Second Tip: Set Targets for Profits and Use Stop Losses
Many might be confused by the term stop loss, but this term basically refers to an order that is placed when the price of security becomes a specific amount, and you can either buy or sell it with the help of a broker. And this is the way every trade is made. You have to be aware of when you have to get out of the trade. No matter if there is a profit or a loss. When you set a clear level for stop less, it helps in making sure that your losses are minimized, and this skill is not so common amongst traders.
Do not think of this as an insignificant point because a stop loss skill is very important, and it is always best when the emotions are kept at bay and not relied on a lot. The level for the stop loss should be set according to your coin’s price, and this proves to be beneficial. So let’s use an example so that you can understand better. If you have a coin that is worth $1,000 when you bought it, then set this amount as the least amount you would sell it or trade it for. This way, if anything goes wrong, you will still manage to acquire the amount you had invested in the coin and that way, you do not lose anything. It is the same with profit levels. If you choose the minimum level of profit you want to achieve before you leave the market, then keep that in mind.
Third Tip: Introducing FOMO
FOMO is another way of saying fear of missing out. This abbreviation basically describes the troubles of all trailers in just one word. It is also the phrase that explains why a lot of traders end up not succeeding in trading and leaving the field. This is also such a common thing that everyone experiences. Whenever someone else makes a profit so easily, one cannot accept it. Especially if you are working really hard and putting your all in, but then someone else makes a load of profit that too in such a short time. So I am with you on this. It is not easy to be motivated after getting really disappointed.
But you should remember one thing. There are many times when new traders can get really lucky, for instance, when the market prices go down. You can easily buy coins at really low prices. When this happens, even the whales, which we spoke about earlier, will realize that you bought the same coins they had but at a lower price. But what happens next is that due to oversupply, the number of losses increases, so beware of this.
Fourth Tip: Review Your Risks
You always have to be conscious of what is at stake. This means making sure that you analyze every trade before you make any move or decision. A lot of successful traders are those who prefer making small profits, which are very consistent because these are not as risky as other ones. When people get greedy and let their emotions cloud their judgement, it poses a huge problem because this often leads to overlooking the risk and going ahead with the trade. And wise traders are known to not partake in a trade that has a huge risk factor but also provides a lot of profits. So you should never be blinded by the profits that trade is providing.
As a trader, your goal should be to look for trades that have a minimum level of risk, and this way, you can participate in a lot of trades and make lots of profits. Another thing you should think of is to invest a minimum amount of your own portfolio in any market which consists of less liquid. High trades need more tolerance.
Fifth Tip: Conditions Of A Market Are Made More Volatile By Basic Assets
As bitcoin is the leading cryptocurrency, it has a lot of stakes in the rest of the altcoins’ market. The market value for Bitcoin is really high, and this also affects the prices and worth of the rest of the altcoins. That is why you should be aware of whichever altcoin you choose, as it is quite possible the price of it will be relative to that of Bitcoin in the market. You also have to understand that bitcoin’s nature is also very volatile as nothing is stable or consistent.
An easier way to understand this is that when the price of Bitcoin is really high in the market, the price for the altcoins will be very low in the market. And when the price of Bitcoin is low in the market, then the price for the altcoins will go up in the market. Sometimes Bitcoin’s bullish behaviour drives the altcoin market up, and the bearish behaviour of the leading digital currency drives the altcoin market down. This also shows how Bitcoin affects the market conditions, as it gets really down and confusing when the prices start fluctuating. Fluctuation of bitcoin prices also causes confusion amongst traders, especially the new ones, as they fail to grasp how the market works. This is why it is constantly advised to have clear goals and targets that are close as they can be achieved. But if you cannot, then it is best to not trade.
Sixth Tip: Do not Buy A Coin Only Because Its Price Is Dropping
This is something that newbies struggle a lot with or even traders that do not have a lot of experience or knowledge about the market trends. A lot of times, what they do is that they purchase coins due to their price being very low, and they consider it to be a good trade. Let’s look at an example, so you understand what is being stated. Let’s say that there is a trader who chooses to purchase Ripple rather than Ethereum, and the reason behind this is that Ripple is cheaper.
What traders should do is that rather than looking at the price of a coin and making that the main point to consider, you should look at the market cap of the coin. This way, your purchase would benefit you in the long run. Just remember that if there is a coin with a really high market cap, then it is the best choice for investment. So be sure to look at the market cap and not just the price.
Seventh Tip: Advice On Crowd-Sales/ ICOs
ICO stands for initial coin offering, and when this begins, startups present the people with a chance that allows them to invest in an idea by a crowded sale. Investors get tokens for a much lower price in return, and they also get promised that when these are presented on the exchange, then they can sell for a higher price.
ICOs have been going on for quite a while, and their history shows that it is a successful choice because a lot of tokens end up being worth much more than they were at the time of purchase. This and many other reasons have appealed to loads of investors because they are aware of the high returns that ICOs provide. But there is always a catch, and the one with ICOs is that a lot of them ended up being a scam which has resulted in many people losing millions of their investments.
Therefore, traders need to be a bit more cautious and aware when they invest in ICOs, and the more attention you pay to its details, the better it will be for you, as you will understand when to invest and when to avoid them. This way, you can receive high returns. It is also best if you were to carry out a background check on whoever organises the event so you can analyse whether they would stick to their promise or no.
Eighth Tip: Advice For Those Who Invest In Altcoin
The problem with altcoins is that they always lose their value really quickly. A lot of times, this has happened in such a short time, and this is why you should be aware of how long you should hold onto an altcoin. And if you do hold onto an altcoin, then you are aware of when to let go. If you are looking for an option that is best for long term investment, then you should take a look at the daily/24-hour trading volumes. And if your volume for daily trading is high, then that is how you will know if an asset is suitable for long term investment.
So if you are a trader that is on the search for assets to invest in the long term, then here are some good options: Dash, Ethereum and Monero. These are good choices as their trading volumes are good, and it is the same on lots of exchanges globally. To be extra safe, you should also analyse the charts and take note of the patterns of these coins.
Ninth Tip: Diversification
By now, you must be aware of the lack of predictability of investments. Sometimes there might be investments that seem really profitable, but in the future, they might not deliver those high returns due to economic downfall. But if you think this is bad, then just know that cryptocurrencies are more unpredictable.
You can do both, just like you can gain lots of profit in a day you can also lose a lot in a day. And this is why diversification is really important. A lot of traders do this so that they are not dependent on just one investment. You always have to be prepared to deal with the volatility of these assets. Bitcoin has set an example as there have been many times the market has crippled due to its value increasing. In 2018, it had made so many people rich in such a short amount of time that people were in shock.
So you can keep Bitcoin as the base of your investment, but it is best if you diversify and try to invest in as many different assets because this would help to minimise the risk and ensure that your profits are increasing.
Tenth Tip: The Best One!
This is the last tip, and it will help you to implement certain factors into your trading ways so you can be good at what you do.
Once you have set a goal, do good on it by placing orders, and these should be set in the order books so that when you get lucky, you can earn according to your goal. Sell orders are also beneficial because they have such low market fees. And start trading when you are sure that you can manage it and not let your emotions rule you.
Conclusion
These ten tips for cryptocurrency trading should help you to know how to start trading and understand the importance of certain skills and how they play an important role in the progression of your trades. You should also think of getting a wallet, as this is the best way to store your assets. And the best option is a hardware wallet as they are more secure.