Are you looking for a new investment opportunity? Are you interestedin the hype with Bitcoin and want to get a piece of the action? If that is the case, it’s understandable why you have landed on this particular guide.
While Bitcoin gets all of the attention and rightfully so, it’s important to remember there are many, many different cryptocurrencies available. This is what makes cryptocurrency trading such an exciting – and potentially lucrative – activity.
However, a lot of people put off investing in cryptocurrencies because they deem it to be overly complicated. Yet the process isn’t as difficult as it may seem – especially if you use the following guide. Below are a number of helpful tips to get you started in the world of cryptocurrency.
Trading cryptocurrencies: getting set up
If you want to start trading cryptocurrencies, there are a few steps you need to take so you can get going. These steps include:
- Setting up an exchange account
- Creating a digital wallet
- A valid bank account
- Personal identification documents
- Payment method
When selecting an exchange platform, always do your research. The last thing you want to do is go with a dubious platform, as this could end up with you losing your money – and not because your investment was a bad one. Stick with established and reputable exchanges, the type you can entrust with your holdings.
Understanding risk and reward
When striking success as a crypto trader, you have to gain a strong understanding of the relationship that exists between risk and reward.
Risk management is important, yes, as it measures volatility and the chances of a trade resulting in a negative outcome. Yet if you want to be a success in your trading adventure, you cannot be scared of risk. The reason: risk and potential financial rewards are tied together. The bigger the risk, the greater the reward if it pays off.
Keep track of news and discussions
As any successful trader will tell you, it’s essential that you keep up with the latest news. This is certainly applicable when it comes to trading cryptocurrency.
News stories and rumours can have a powerful impact on the market, and it can go in one of two directions. If it’s a negative story, the value of a particular cryptocurrency could plummet. If the story is positive, however, it may result in a rather lucrative trading opportunity if you jump on it fast.
It’s recommended you join the Blockchain Community, as being active on this platform can help reveal the power of information from discussions.
Stick with what you know
Did you know that, according to CoinMarketCap, there’s well over 7,500 different cryptocurrencies on the market today – and that number is only going to grow? While the amount of choice is good in one sense, it can also cause confusion if you try and follow too many of these cryptocurrency variations.
With this in mind, it’s advised that you only stick with a certain number of cryptocurrencies. Plus, while you don’t necessarily have to stick with the big hitters like Bitcoin, it’s always good to go with a crypto that has some media traction. This way, you can utilize the previous point about staying up-to-date with news and community discussions.
Have a trial run first
Once you have read all of the aforementioned tips, you’re likely raring to go with splashing the cash on your cryptocurrency of choice. However, it’s important to just take a step back and not rush into anything. If you do, this could be a quick way of depleting your bank account without any reward.
Fortunately, you can actually conduct a trial run before you even spend a penny. Traders of Crypto is a free platform where you can complete virtual cryptocurrency trading. You can learn all about the markets and practice advanced trading strategies. Plus, this is a competition where you compete against players across the world. If you get particularly good and top the rankings each month, you can even win real cryptocurrency!
A need for self-control
It’s easy to let a little success go to your head. Yet,there’s something that separates those who are successful in trading cryptocurrency and everyone else: self-control.
Simply put, you cannot let emotion overtake your decision making. Both greed and fear are powerful emotional forces that can cause you to make irrational trading choices. Control these, and you have a greater shot at making a profit from your cryptocurrency trading efforts.