Cryptocurrencies are still a way to either make money quickly or lose them. Thousands of newbies come to this market every day, and most lose their money. Novice investors do not always understand how to invest in cryptocurrency properly. The reasons for this are high volatility, irregularity, decentralization of this area, and much more. Moreover, many investors are counting on quick earnings or passive income. Even with a lot of experience and knowledge, not every investor is able to quickly make money in the crypto market. Before you start investing in the crypto market, learn about the basic tips that will allow you to make fewer mistakes and not lose all your investments.
Don’t start crypto investing with margin trading
Leveraged trading is the most powerful and dangerous trading tool in general. And the larger the leverage, the higher the risk and potential earnings, which is no coincidence.
- Different exchanges provide investors with different leverage. For example, on the BitMEX cryptocurrency exchange is provided, a leverage of 1: 100. You can double your capital in a couple of minutes if the price moves in one of the directions by only 1% using such leverage to the maximum. You can lose all investments if you do not use stop loss.
- Margin trading requires tremendous experience, self-discipline, and never forgives even the smallest mistakes. Starting with margin, your acquaintance with the crypto market is sure financial suicide.
- Get started with the Binance exchange. Buy multiple altcoins. Track their dynamics. And only then, having gained experience, you can go to marginal platforms.
Trading against the trend
When the trend is steadily moving in one direction, inexperienced crypto investors may decide to bet against the trend. Most often, the investor will lose the money invested. But don’t think that this tactic will work next time. It is very difficult to make money with the tactics of investing against the trend without a lot of experience. Only experienced crypto investors can make money trading against the trend. Their choice is always based on knowledge and crypto news.
Chat with other crypto-traders
For a beginner who is just taking the first steps in crypto investing, it may seem unrealistic to master all the subtleties, terminology, and rules in this market.
- Many experienced traders spent many years before they started to feel comfortable here. Therefore, try to find like-minded people. They don’t have to be offline friends.
- Find people with similar thinking and similar tasks, get to know them, start communication. You will share and gain new experience and control each other in terms of risks, giving advice and warning against rash actions.
- Any training will be much more effective if you have someone to discuss it with. After all, many investors have already made the mistakes that are just ahead of you and help avoid serious consequences.
Don’t neglect safety on the crypto market
Neglecting electronic security can affect the safety of your assets. Hackers do not sleep and are ready to help you get rid of digital assets in the most clever ways. Store your private keys in a safe place, do not send cryptocurrency to unverified people, protect your data, use cold wallets, and do not install unverified software on your computer. Try to make life as difficult for hackers as possible and secure your data to engage in crypto investing safely.
Don’t rely on intuition to invest
Intuition is the fruit of experience, which some investors only mistake as a sixth sense. If you don’t have at least a few books on trading behind you, several months, or better years of real trading, and your trading strategy, then your intuition is more of a passion. Intuitive opening of positions, not supported by iron arguments, can reset your account quickly. Most newcomers, getting into the crypto market, begin to invest, relying only on their intuition. In the beginning, they may even be lucky, but without knowledge, successful investment is impossible. Do not invest relying one hundred percent on intuition not to lose your funds; read crypto news and learn.
Don’t be afraid to invest in a rising asset
It often seems to beginners that taking the lowest rate possible is a good idea. Yes, undoubtedly, sometimes it is; the investor’s task is to buy low and sell high. However, if we count on the medium and long term, then the rise in an asset’s price is evidence of its trend. And a small correction is enough to make money on the currency that is gaining popularity safely. An example is the BNB registered token of the Binance cryptocurrency exchange. Back in early 2019, the crypto price of 1 BNB was $6. When the coin did 100% and climbed to $12, many left it (although they entered even earlier and at higher values). BNB is currently trading above $30 and is not going to renew lows. After all, a trend is a good indicator for an investor.
Rushing is a bad sign for crypto investing
Beginners are especially eager to enter a trade quickly if they see a good opportunity for it. At the same time, the accuracy of risk calculation, the thoughtfulness of the entry, and the quality of execution often suffer. A newcomer to the crypto market thinks that he won’t get rich if he doesn’t enter now. This approach is not correct. Haste is the main enemy of any trader. Any trade you make should result from balanced, calm thinking and never be done in a hurry. Moreover, every trade should be based on an analysis of crypto prices and your knowledge.
Diversify your portfolio
Why is the lack of diversification dangerous in the crypto market? Investing in one coin makes you defenceless against its dump, that is, a sharp and unexpected collapse. Trading a single strategy can rob you of money on its losing streak if it turns out to belong. Keeping digital money in one place makes you an easy target for hackers. Only diversification will solve these problems. Trade a portfolio of strategies. Have a portfolio of cryptocurrencies. Distribute whatever you can so that you do not depend on unforeseen accidents.
Stay up to date with crypto news
It is easy to find services and resources to get professional analytics, trading recommendations, and other valuable information. You can easily find such platforms, where many years of experience of professionals in their field will help avoid the most obvious mistakes. Being in an information vacuum cannot be too dynamic and interesting in the field of crypto investing.
- You always need to follow the news and continuously learn to make a successful investment.
- The biggest mistake novice investors make is trading without stop loss. There is no better way to lose your entire deposit than this one.