10 Essential Tips For Newbies Entering the Cryptocurrency Game
0
0
Price is certainly one of the main ways we think about the process of investing in cryptocurrencies, but it’s far from the only factor that determines how we approach its value: consider its other dimensions, such as:
Investigate it for yourself, and learn how the technology, the various coin teams and roadmaps work, and learn about cryptocurrency regulation and taxes in your country.
Do Your Research
You should take your time and do research. Research an individual coin, do your due diligence on the blockchain tech – make sure to look into every aspect. First RUN (stands for: Recon on Unknown Network)to https://coinmarketcap.com or https://coingecko.com before buying any. That gives you a quick idea of where the coin is at now and if the coin price is something of merit to invest in. Next, visit the different social media per coin/project (Telegram, Reddit, etc.) to read the community talk of its/project coin/project.
Start Small
You should always make your opening investment small, and in the case of cryptocurrency in particular, erratic, so – err on the side of caution. Dollar-cost averaging (DCA), which means making regular purchases of cryptocurrency regardless of price levels, has long helped to protect investors from poor investment judgment due to emotional reactions, as well as from short-term market volatility. DCA can also help you benefit from long-term crypto increases.
Don’t Be Afraid to Lose
The cryptocurrency market is volatile, and placing your savings in it could result in you folly but, for the sake of argument, if you are going to buy it, go ahead and risk what you can afford to lose, perhaps a mix of established cryptocurrencies and promising up-and-coming ones. Another mitigating strategy is dollar cost averaging (DCA); that is, if one invests a constant amount over time, the effects of price fluctuations decline considerably.
Don’t Be Afraid to Learn
But before investing, it is of utmost importance to always conduct extensive research and gather as much information about cryptocurrencies possible in order to create a trading plan that fits your risk tolerance as well as your investment goals. For instance, do not buy a cryptocurrency without being confident that the development team has a clear vision of its future application (eg, how the technology can be developed further to alleviate users’ pain points). Worst case scenario: you shouldn’t buy into a project that has nothing to offer in the long term.
Don’t Be Afraid to Be Flexible
Cryptocurrency is a challenging place, but with a little knowledge of investing fundamentals and common sense it can be easier to navigate. DCA takes some of the emotions out of the market by reducing the likelihood of making unnecessary sales, or buying in at overvalued prices, thus allowing your portfolio to profit as much as possible while also helping to protect your capital.
Don’t Be Afraid to Make Mistakes
Cryptocurrency trading could also be an attractive pastime for gamblers who have the stomach for risk and the trading chops to make snap decisions in the blink of an eye – just remember, the price of crypto assets can be a rollercoaster; start slow and risk only what you can afford to lose. Diversify your portfolio in order to reduce volatility. Monitor the markets and the news.
Don’t Be Afraid to Take Action
Sure, a crypto portfolio can easily be bursting with volatility if you invest in a plethora of currencies but, if your aim is long-term investing, your mind should always be in the long-game. Investing in projects with a large market cap is far more sustainable in the long-run than being sucked into a new project riding high on a frenzied newswave – we call this ‘hype’. Beware that investing is a zero-sum game, and you will win only when someone else loses – that’s true regardless of whether you’re into traditional investing or cryptocurrencies, where the space is still rather hollow and unpredictable.
Don’t Be Afraid to Be Flexible
Crypto trading is an uncharted territory, which is full of opportunities and risks at the same time. Here is an important piece of advice: newbie should modify your trading strategy to suit your risk tolerance and goals. Novices can hedge volatility with dollar-cost averaging – small additions put in over time – and diversify their largesse across established coins and plucky young upstarts that might betray us as they rise in equal measure to any single crash.
Don’t Be Afraid to Make Mistakes
The cryptocurrency market is a complex beast and it’s very easy to slip up. Nevertheless, there are many mistakes that you can try and avoid to become a more savvy crypto trader or investor. Make sure that you only invest funds that you can miss out on, trade via a reputable exchange, and be looking out for ‘get-rich-quick’ crypto scams on social media.
Don’t Be Afraid to Take Action
Cryptocurrency investments are not subject to protections offered to investors in securities (such as market regulation) and one should invest only what they could afford to lose. The same goes for making sure that your funds aren’t compromised through insecure storage: don’t leave them lying around on a shaky exchange; use strong passwords and two-factor authentication; safeguard against phishing scams.
