The cryptocurrency world isn’t slowing down despite the many changes happening on the market in recent months. The rapid rise of Bitcoin (and other cryptocurrencies), and the volatility that followed suit attracted millions of new traders and many of them stayed after the Bitcoin boom settled.
Joining the cryptocurrency market is exciting and challenging at the same time; it is never too late to dip your toes into the pond of digital currency.
Before you get started, however, here are some more things you need to know and understand about cryptocurrency trading.
Study the Basics
Just like entering forex trading or the stock exchange, the first thing you need to do when you want to start trading cryptocurrencies is learn the basics. You may have read so much about cryptocurrencies and how the market works, but covering the basics is still an important step.
There are plenty of great resources to help you. This how-to guide on buying Ripple, for example, is a great guide to read if you want to invest in the cryptocurrency and take advantage of its strong valuation. You can also find specific guides on other coins.
Learn about the trading platform you will be using before you start buying and selling coins. Understand the tools and the menus so that you can act quickly when you have to. You can now do test runs using demo accounts or simulations.
While many cryptocurrencies are still exciting in terms of volatility, the majority of the market offers a calmer, more predictable environment for new traders. Instead of pursuing short-term gains immediately, try investing in coins that offer great long-term growth in value instead.
There are as many ICOs as there were when the market spiked, so options aren’t a problem. Pick correctly and you can double or triple your capital in just a few months.
The recent success of SQT (Storiqa) is a good example of how 2018 is becoming a great year to try cryptocurrency trading.
Know How to Protect Yourself
There are two types of security you need to trade safely. The first one is account (information) security. You need to learn how to properly secure your crypto wallets and trading accounts. Cryptocurrencies are completely decentralised, so theft and unauthorised access can be catastrophic.
The second protection is for your investment. There are strategies that help you manage your risks while trading coins. Instead of holding on for an unknown period, you have the option to develop a risk management plan that works.
Only trade with the money you can afford to lose. The risk-return trade-off principle still applies to cryptocurrency trading. The more you can potentially gain, the more you can potentially lose.
Trading with the money you can afford to lose gives you a psychological advantage. You are less likely to make erratic and uncalculated decisions when you are in control of your emotions, both after a loss and after a substantial gain.
Remember these tips and your journey into the cryptocurrency world will be a pleasant one.