You may be thinking of jumping onto the crypto trading bandwagon because almost everyone round you is, but trading is harder than you think. The crypto market may be open 24×7 offering you endless opportunities to make profits, but it is driven by market sentiment. When you trade in any market, whether it is the stock market or cryptocurrency market, you are likely to fail if you are not careful, and most traders find themselves in deep waters within only a few months. They end up losing a huge amount of funds or perform much worse than they would have had they invested that money in a safe option and left it to grow.
Top Tips For Every Beginner In Bitcoin Trading:
- Start small: You must always start out with small investments till you can get an idea of how the crypto market works. Bitcoin trades are risky and you should refrain from putting in a lot of money on a single trade. Get used to small-stake trades before moving onto higher ones.
- Get a wallet: Your Bitcoin wallet will store your assets securely; so, you must research the different types of wallets based on their ease-of-use, reliability, security, and privacy features. Make sure to check the broker’s reputation and keep bulk of your money in offline storage.
- Research: You must do your homework; learn fundamental and technical analysis to make good Bitcoin trades when you are starting off. Regular financial theories will not work for Bitcoins because prices are driven by public speculation.
- Leave emotions aside: The crypto market never shuts down but that does not mean you have to keep trading 24×7. This can lead to fatigue and a fear of missing out that leads you to make faulty and hasty decisions and consequently, bad trades.
- Choose a strategy: As a beginner you must take time out to evaluate the different trading strategies to see which fits best. Not everyone can devote the same amount of time to market analysis and trades. You can choose from tried-and-tested strategies like HODLing, scalping, swing trading, or day trading.
- Implement stop-loss and take-profit orders: Before entering any trade you must identify a profit level that you are open to accepting should the trade go south. Without this, you will unnecessarily expose your money to potentially huge losses. Greed can make you hold onto your assets to make higher profits only to find the prices nose-diving later on.
- Use leverage carefully: This is an exciting option that can guarantee you profits provided you know how to do it. It requires ample expertise and experience in balancing risks and rewards which a beginner may not have mastered.
- Diversify: If you are new to Bitcoin trading it is best to invest in coins other than the Bitcoin to ensure that whatever losses you face in Bitcoins can be compensated with gains made through others. Getting obsessed with Bitcoin can cause you to lose money.
- Hold Bitcoins: A beginner should ideally buy and hold onto his Bitcoins for long-term gains. This passive approach is safer because you can bypass short-term volatility and overtrading.
- Beware of scams: Since the crypto market is largely unregulated it is exposed to cyber thefts and scams. Fake wallets and exchanges may cheat you of your hard-earned money, and Ponzi schemes claim to offer returns that should not be trusted.