Crypto trading can be daunting, especially for the one just getting started since they are most likely to be unaware of the “rules”.
In the same way as other investments, it is best to start small and gain experience as you go deeper. Cryptocurrencies have emerged as one of the most sought-after asset classes today, but with limited historical data for fundamental analysis. Moreover, it is not about getting fortunate a few times in crypto trading. If you want to succeed in cryptocurrency trading, you need to focus on the fundamentals, solid habits, and knowledge.
But there is nothing that you need to worry about here. In this blog, let us introduce you to five golden rules that will help you trade cryptocurrencies more effectively:
- Defend yourself against fraudsters
Before you even consider buying cryptocurrencies, keep in mind that this is the Wild West. Cryptocurrencies are unregulated and uninsured. There are no regulations on digital assets, and newbies risk losing their entire investment.
This could be a whole post, but the easiest way to avoid scammers is to reason. Learn how to buy, manage, and secure your cryptocurrencies. When you trade cryptocurrencies, be careful and double-check everything.
Use strong passwords, enable two-factor identification, and store your seed phrase in a safe place. Visit odd websites and Telegram groups at your own risk. Every day, new frauds emerge, so be vigilant to protect your money.
- Conduct independent research
The field of cryptography is incredibly complicated and forward-looking. These ideas are so complex that they cannot be described in a single comment or article. If you want to be a part of the crypto world, you need to make an effort and DYOR.
Don’t take everything someone says on the Internet at face value, but make sure they can back it up with plenty of sources. Most people have preconceived notions about the cryptocurrencies they own. Therefore, it is only logical that they praise the coins in their portfolio while condemning others they do not own. Make an effort to understand the benefits and make an unbiased judgment about cryptocurrencies.
- Don’t get too caught up with the price
Many people couldn’t fall asleep at times because the values were swiftly increasing or plummeting. They were hooked to their phones, seeing Bitcoin fluctuate by hundreds of dollars.
The crypto markets remain open 24 hours a day, seven days a week, and have been for almost a decade. We are no longer tied to a five-day stock market from 9 a.m. to 5 p.m. We now have the option of buying and selling anytime we choose.
The difficulty is that cryptocurrencies might easily climb or plummet by 10% while we are sleeping. It doesn’t matter what happens daily. It’s futile to worry about the price frequently if you’re in crypto for the foreseeable future.
- Put in only as much as you can lose
This is a common guideline for investing. As a newbie to crypto trading, you’re bound to make mistakes and lose money during the learning process. To avoid a big financial disaster, you shouldn’t bet large sums of money initially.
If you’re confident about the cryptocurrencies you invest in and understand their value and potential, you can put more money into this asset class. Experts recommend that Cryptocurrencies shouldn’t make up more than 5% of an investor’s portfolio.
- Avoid being an extremist
Remember what initially attracted you to cryptocurrencies: an open mind.
Of course, you want your digital assets to work well. Many people extol the virtues of their cryptocurrency and claim that it’s the only one that will survive. They also spread disinformation and hate about cryptocurrencies they don’t own.
In truth, cryptocurrencies can solve a wide range of problems. Although many of them will lose, there’s still room for many of them to succeed and thrive.
If you follow these 5 guidelines, you’ll have an enjoyable and fulfilling crypto adventure. There aren’t many ways to get involved with a creative concept like crypto, but it’s essential to have a positive attitude when exploring its potential. It’s our responsibility as representatives of the crypto community to foster a safe and welcoming environment.