One of the most promising financial assets today are cryptocurrency, which are digital coins that can be used for various transactions. To start, traders should purchase some coins in various places you can buy cryptocurrency. This enables them to start their career, as well as expand their portfolio. Most crypto coins are derived from blockchain technology, which acts a digital ledger in recording various transactions.
Here are some tips to trade like a professional in cryptocurrency:
1. Name your objectives
Like most major financial decisions, investors should
reflect on the big picture, which talks about the major goals they wish to
achieve in the future. Name your specific goals for engaging in cryptocurrency
trade.
For example, you want to trade for short-term or long-term gain; you are
looking for the next best blockchain technology; or you are looking for the
next Bitcoin.
Be specific and set milestones so you know when you’ve accomplished something. Regardless of whether you are a beginner or not, it helps to define these goals often to help keep your focus in place.
2. Do the right amount of research
Everything about crypto coins can be found online, so it’s important that you use the best online tools in knowing more about a blockchain technology before putting money into it.
Certain decisions require careful consideration. Whether it’s deciding on which crypto coin you intend to invest in next, which ICO is worth investing in, or which is the best exit strategy for your next trade, there is no doubt that proper research play a great role in helping you decide.
Here are some of the things you should research on:
- The general standing of the cryptocurrency in the financial technology or Fintech community
To get the information you need, remember to extract bits and pieces of data from reliable sources like legitimate cryptocurrency sites, news reports from viable channels, and input from revered experts in the industry. - Reputation of crypto companies
While reviews are generally subjective, it does help give you an idea on how the company itself manages from its shortcomings and whether or not they share the same values as you do. - Team members
Before putting money into a certain coin, make sure that the team members are capable of pulling off the blockchain technology they promise to deliver. Check for financial industry experiences and Github profiles for blockchain technology knowhow. - Cryptocurrency trends
You should include a study of at least top 5 cryptocurrencies that you want to put money into. Make sure that you include the recent and previous trends of the coins you’re interested in so you can predict the right time to buy or sell them.
3. Decide how much money you plan to trade
You should map out your financial details. This tip is highly useful in both your daily and long-term strategy. Whether it’s deciding on your budget for the day or making the most out of long-term position trading, there is no doubt that deciding on a fix budget can help narrow your options, while also giving you a chance to reduce some risks.
Here are some considerations:
- Where to get your funds
Plan where you will be getting funds for your cryptocurrency trade endeavor, whether you’ll be loaning, borrowing, using your savings or looking for investors to give you starting capital. - Profit targets
Map out your earnings’ target for the upcoming days, weeks or months. With your targets, you can project when you’ll be able to gain back your capital and how much you need to profit. - Start small
Even if you’re already a master at foreign exchange trade or some other form, you have to test the waters before you go for a plunge. - Invest what you can afford to lose
It is important to avoid financially draining decisions like selling your house or using your life savings just to invest in Bitcoin
4. Platforms and Wallets
When you’ve established that your goals are what you plan to invest in and how much you want to invest, you should then decide on the kind of platforms to put money in and the wallets to hold your cryptocurrencies.
Make sure that the platform you’ll choose have the following characteristics:
- Legal to operate in your country
- Convenient payment options
- High liquidity
- Wide variety of cryptocurrencies
- Mobile application, if you want to monitor your investment at any time
In choosing wallets, you should also consider its compatibility with the platform, and the activity of your digital coins. If you’re planning to constantly trade and use your coins, a hot wallet would be advantageous because it’s directly connected to the internet; if you’re planning to keep your coins for a long time, a cold wallet would be good because it’s not connected to the internet and harder to hack.
5. Use volatile events to your advantage
With so many variables that could make or break the value of a coin, it is almost inevitable that an unstable crypto market could lead to price drops. While these events are usually seen as a low point, traders can actually use this event as an opportunity to look for other assets in the market.
For instance, if the market experiences a significant drop of price within the last two months, users can use this time to either hold on to their current coin or make arrangements to sell them at an attractive price.
6. Diversify your portfolio
With over 2,000 coins in circulation, there is no doubt that investors have various options to choose from. However, to get a proper grip on the market, experts suggest that one should start purchasing some well-known coins like Bitcoin, Ethereum, and Ripple.
For altcoins, this requires digging into some very reliable sources, like reading up on which altcoins have the most potential. Considering that the market is very competitive, traders should constantly update themselves to avoid falling behind on important data.
For private company funding, experts believe that Security Token Offerings or STOs will emerge as the dominant medium for crowdfunding in 2019 as they are more secure and reliable compared to Initial Coin Offerings or ICOs.
Conclusion
With the ongoing development of technological innovation, it’s safe to say that blockchain technology is considered the forefront of modern solutions. One branch of which is cryptocurrency, that although it is considered volatile, can still be a great source of profit provided that traders learn to enhance their trading skills.
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