As of July 2022, over 400 million people have acquired hold of cryptocurrencies, and hotspots like the United States account for nearly half of cryptocurrency investment. On the other hand, if you are interested in bitcoin investing, you may use a secure platform like Bit Alpha AI. Lack of regulation in the cryptocurrency ecosystem is why you should always be careful while investing in digital coins such as bitcoin.
People who straight dive into the cryptocurrency market end up making many mistakes. Buying a cryptocurrency is easy – the hard part is making a profitable trade. Here are essential do’s and don’ts of crypto trading to help you handle the same decisions.
1. Do not trade with innapropriate funds
Cryptocurrencies can perform better than any other asset class in this 21st century. But, the cryptocurrency market usually experiences a lot of volatility and price swings. To handle such situations, getting the right amount of funds is essential. Hence, start with small sums and increase them gradually as your trading skills develop along with the digital coin market.
2. Do invest in a variety of coins
Bitcoin is not a mere cryptocurrency as thousands of robust altcoins exist in the market with an excellent roadmap and significant adoption. So, The least you should have 2-3 cryptocurrencies, including bitcoin, Ethereum, Lite coin, Ripple, etc. Besides, it is better to invest in stablecoins to have a good balance of risk and reward.
3. Dont panic trade
The cryptocurrency market is highly volatile, and the coins’ prices can go from $1,000 to $10 in a few weeks. This volatility makes the altcoin market suitable for day trading and long-term investment, where one should wait for at least a year to gain profits. If you are new to cryptocurrency, you will be confused by such instability.
4. Dont limit yourself to one exchange
The crypto market has many reputable and trustworthy trading platforms that offer stable platforms with innumerable means of payment, such as bank transfers, credit cards, etc. In addition to these online exchanges (like Coinbase), numerous cryptocurrency markets exist across the globe, from Kenya to Japan. To execute a profitable cryptocurrency investment, make it a point to register at multiple exchanges and get acquainted with their processes before you start using them for making transactions.
5. Do protect your private keys
Private keys are unique codes that can be accessed only by you and are critical to any cryptocurrency. So, Store your private keys offline in a private place like a paper or hardware wallet
6. Do you prefer a hardwasre wallet
Hardware wallets offer offline storage of private keys, support multiple currencies, and have an encrypted digital screen to ensure that no one can access your coins unless you enter your pin. Your crypto coins are under your control as hardware wallets give you exclusive access to your private keys.
7. Don’t give away your private keys to anyone
As mentioned above, you should never share your private keys with any third party or anyone, including cryptocurrency exchange sites. If that happens, there is no way of recovering the lost cryptocurrency. So, always maintain strict confidentiality about your private keys and related passwords for future transactions.
8. Do follow the trading polocies
You can always trade cryptocurrencies on a free demo account with a fixed deposit amount and get acquainted with the account before you make actual deposits. Also, be sure to check the trading policies of the exchange site and put your deal following that. You can also follow crypto trading forums or social media groups to understand how cryptocurrency markets work.
9. Do follow the technical analaysis
Technical analysis of the cryptocurrency market is precious for investors and can help them find a place to buy and sell orders at the right time, so they don’t have to suffer from a loss. Moreover, follow the cryptocurrency news and relevant reports to promptly know about all the critical updates.
It is always wise to spread your risk across multiple coins. However, the study of technical analysis is more critical when the altcoin market fluctuates a lot in terms of price and volume changes. Cryptocurrency pricing strategies are quite different from traditional assets, with many factors influencing the prices of digital coins, such as network updates, marketing strategies, etc.
The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision. London Loves Business bears no responsibility for any gains or losses.