Cryptocurrencies have been around for a while now. Even so, the average trader is still groping in the dark as far as the concept behind cryptocurrency is concerned. Cryptocurrencies are insanely volatile; trading them may sound like a reserve for the financial elites. However, the proliferation of trading platforms and online exchanges has enabled anyone to take part and make a fortune from market speculation.
Whether you trade Bitcoin, Ethereum or any other currency, it is imperative to note that you can make a fortune or lose your investment in a moment’s notice, yet there is no insurance coverage for possible losses. For this reason, Jose Merino, the Chairman of SID Limited, cautions traders against investing what they can’t afford to lose. “Invest what you’re ready to lose; never sink your life savings into cryptocurrency investments.”
When starting off, it is advisable to use an exchange with a good reputation. Jose says personal trading experiences are invaluable for novice traders. “When looking back, it’s always easy to explain why a specific time was better than others to buy cryptocurrencies. However, there is no substitute for experience. Try it out with a small amount of money or other crypto you’re prepared to lose in order to learn. In general, when companies announce good news or a big deal there is a short-term rise to be expected but then again, the opposite is also true.” Jose’s pointers for a good investment currency include those whose company mission is clear, those that have a strong experienced team and cryptocurrencies with a growth strategy.
Continuous learning is also imperative because you need to understand how to read and interpret charts. As with every other skill, the more time and effort invested in learning and improving trading skills, the better you become. Guesswork has no place in cryptocurrency, and knee-jerk decisions can wipe out your capital within no time. “One of the things that everyone must consider prior to venturing into buying any asset class, be it cryptocurrency or stocks is to educate themselves on important aspects of the asset. They must become acquainted with the primary aspects of what they are putting their money into, similar to buying a house for themselves; and comprehend that publicly traded instruments have both ups and downs.” asserts Jameel Shariff, the CEO and Council Member, P2PS.
Researching cryptocurrencies can be overwhelming and intimidating. However, it isn’t necessarily complex as it seems at the first glance. Conducting your own research can potentially reveal better entry points. According to Jay Singh–ClearCoin’s CEO-a coin’s true value is among the biggest considerations when launching a trade. Jay claims he draws this strategy from seasoned traders such as Warren Buffet and Benjamin Graham. ‘For entry and exit points, I intend to examine the intrinsic value of the cryptocurrency.”
Throughout the last few years, economists and industry experts have attempted to predict the values of various cryptocurrencies. Despite some being significantly on point, most predictions have fallen way off-target. Bitcoin-like other cryptos-has seen a wild ride in the past few years and no one can fully explain. Eugene Liebermann, CEO CAR Token Company cautions that investors (experienced or not) should never take it upon themselves to anticipate the next market moves. Eugene believes that trends and news can help traders respond accordingly. Nonetheless, he discourages acting upon sudden rapid moves. “Real use of the coin and off-chain good news is always a sign to enter the market, but NOT right after the sharp rapid and obvious raise, as there will be a correction for sure.” Traders are strongly discouraged from splurging on coins that rise 10-15 times a day. This is a risky affair and could be a get rich quick scheme by someone at your cost. The old saying goes; plan for the worst, but hope for the best. You can be out of the trade within minutes with a profit, but in case things turn out the other way, be prepared to bear the brunt. Risk management is thus crucial for survival with cryptocurrency trading. You can mitigate investment risks by trading top coins by market capitalization.
Cryptocurrency trading may prove tumultuous for the beginner, but it does get bearable with time and experience. Once you’ve mastered the art of buying and selling major cryptocurrencies for USD, EUR or other major fiat currencies, you can begin trading Bitcoins and Ether for other virtual currencies. Of course, this comes with more risks than buying a single digital currency, but it can be quite rewarding. In the event that you regret a decision, learn from it and get back on track. Evaluate your mistakes objectively and take each flaw as an opportunity to learn and get stronger.
