You must have heard that people make crazy amounts of money with crypto. And it’s true. But this doesn’t mean you should jump in with both legs, as chances are high that you will make mistakes that might see you lose a lot of your hard-earned money.
To help you out, here are tricks you should know about the trade that will help you make not only money but also protect your initial investment:
Choose a reliable trading platform
You want to start on the right foot, which calls for you to research and choose a reliable trading platform. An ideal platform should be secure, easy to use, have reliable customer support, and plenty of coins to trade.
Once you have settled on a Bitcoineer site to trade with, create an account. You must provide your name, email address, mailing address, and contact details. The platform will then send you an email that you should use to verify your account.
Upon verification, your next move should be loading your account and trading.
Choose the right currency
When you ask many people about cryptocurrency, their mind always goes to bitcoin. While bitcoin is the most popular coin, you should know that there are over 7,000 coins in the crypto market that you can invest in.
Does this mean that you should invest in all coins? Well, no. In fact, you can easily lose your money if you do this.
The right thing to do is to take your time to research and find a reputable coin that you can get a return on.
One of the things you should look out for in a coin is its history. Are there many people trading it? Does it have solid backing? What unique value does it have in the market?
After considering these, make your buying decision. Obviously, buy a coin that is being traded by many people and provides something unique to the market.
Some people will tell you that you should buy new coins, as you will have the advantage of getting into the market early. As a beginner without a lot of money, avoid initial coin offerings (ICOs). This is because you don’t know such coins’ legitimacy and success rate.
You don’t want to lose your money, do you? So avoid coins without a known record.
Don’t put all of your money into crypto
As much as people make money with crypto, you shouldn’t pour all your resources into it. Remember that the same way you stand to make money from crypto is the same way you can lose it should things fail to go your way.
Crypto is highly volatile and has numerous risks, such as hacks and malware attempts.
To stay safe, don’t pump your life savings and retirement into it. You also should avoid investing the money you are looking to spend soon. Doing this eliminates the need to sell your crypto at a loss, and you lose your money.
You should only invest money that you can afford to lose. It also should be money you can comfortably have away for months or even years—not money you are planning to buy lunch the next day.
Have a trading plan
Like in any other market, you make money by buying and selling crypto. Unfortunately, you can’t make much progress without a trading plan—you need to make one. The ideal plan should include the following:
- Your investment objectives.
- The cryptocurrencies you will trade.
- The market conditions you will consider making a trade.
- Any other details.
Through the plan, you will be able to manage the risk and have a more prepared approach to the market. The plan you develop will guide your entry and exit price, time, trading volume, etc.
As a beginner, it’s wise to have a mentor who will guide you in developing a winning trading plan matching your budget, character, and risk appetite.
Don’t fear missing out
Due to the volatile nature of the market, you are bound to find some coins gaining during certain times of the day, and you are tempted to get into the market so that you don’t miss on the profits.
Sometimes, some people will start talking about how they are making money on certain coins, and you are tempted to get in. After all, it’s human nature to want to join what other people are doing.
While you can make some money when you hop onto the wagon, avoid doing so simply because other people are doing it.
Stay on the right side and stick to your trading plan. If a coin doesn’t fit your plan, don’t trade it regardless of how much money others make. Always stick to your plan and never trade under pressure.
Diversify your portfolio
Diversifying means putting your money in more than one coin, which is an excellent risk management strategy as it allows you to spread your risk across many coins.
This way, you don’t incur heavy losses even if one coin goes down.
A good rule of thumb is to invest no more than 5% of your money in one coin. Of course, research the coins thoroughly and only invest in those that make the most sense. As mentioned above, don’t invest in a coin simply because it’s making money for other people—it needs to make sense to you.
Accept mistakes when they happen
Even with the best plan and research, things are bound to go wrong. This means you might be sure that a coin will make you money, but its value decreases when you invest.
This is a normal occurrence in the market, and you shouldn’t beat yourself too much about it. All you have to do is accept the outcome and not be in a hurry to cash out. Be patient, and hopefully, things will look up in the future.
You should also invest in knowledge and learn from your mistakes to increase your chances of making the right moves.
