Are you excited about cryptocurrency and are looking to take advantage of the next bull run and hit millions? In this article, I have dropped 5 tips that will help you with this.
Did you ever imagine that money could cease to exist?
Cryptocurrencies are here to revolutionize the world and with it the way we hold money.
Blockchain ecosystems have given investors a haven in which to store their money outside the traditional system, which has made cryptocurrencies like Bitcoin and Etherium highly popular.
The great returns they have had in the last two years have made it possible for more than one to fulfill their dreams of buying a house or changing their car.
Cryptocurrency trading has become the new playing field among market players, especially day traders.
The high volatility, large movements, and opportunities offered by these conditions have powerfully attracted the attention of the so-called Day Traders, who look for this type of market to obtain profits in a short term and with high yield, being BITCOIN the favorite of the majority due to its great growth in the last years.
These rapid manifestations of volatility in cryptocurrencies are tempting, but it is difficult to overlook the strong trend reversals that make trading a bit difficult. And that’s because the so-called whales put your money at risk.
That’s why it’s always important to have a well-structured investment plan to take care of impulses that can put your capital at risk.
For that reason, I bring you 5 amazing tips to start devising your plan and take care of your money.
Now, yes… Let’s get started!
1. Focus on Liquidity
There are hundreds of cryptocurrencies with different uses and objectives, but the truth is that not all of them have the necessary commercial value to be able to exchange them. This means that the liquidity of the asset does not allow you to trade comfortably, making it more difficult to enter and exit an operation.
In the end, we want to make money, not headaches.
2. Trade, don’t bet
What separates traders from gamblers is a discipline in their risk management. Although uncertainty is a common point between the two, the trader assumes uncertainty as part of the trade and has risk management that allows him to trade high-value assets without putting all his capital at risk.
3. Buy strength, sell weakness
Unlike other financial assets, cryptocurrencies have no intrinsic value attached to them. Therefore, there is virtually no such thing as a high or low price for a cryptocurrency.
In these scenarios, Traders can buy a strong uptrend and sell a downtrend with a proper risk management plan.
4. Research
The creation of new cryptocurrencies has brought with them great investment opportunities because of their price and percentage yield. However, not all low-priced cryptocurrencies guarantee that you will have great returns, as many of them do not have serious research backing to help you determine if the coin is worthwhile or just smoke and mirrors.
5. Control your emotions, not them you
Emotions tend to be a key factor in traders’ profits and losses. Fear and greed are primitive human emotions, which can often be detrimental to our economic development. We are afraid of losing and always want to gain more.
The healthy development of these emotions, combined with discipline and a management strategy adapted to your needs can take you very far in cryptocurrency investments.
BONUS: Diversify
Putting all the capital in a single asset is the most common mistake made by traders looking for a miracle cryptocurrency that will multiply their money in a couple of days. However, this only puts at the market’s discretion the performance of all money, which means that if the chosen cryptocurrency drops 50% you will have lost half of your capital in a matter of days. Expert traders manage portfolios, a set of assets in which they have diversified their capital to reduce the risk of loss and balance the money. With 5 active currencies, you won’t have a problem if one pair goes down while three go up and leave you with a profit.
Final take
While these tips can help cryptocurrency traders avoid some common mistakes and reduce their learning curve, they do not replace an enriching experience.
No advice will give them a guarantee of success in this career, only the time they stay focused on their goals and a strategy can help their improvement as an investor.
Therefore, it is key that traders keep learning throughout their investing years to become professionals in cryptocurrency trading.
Remember, the market is the best teacher when it comes to investing!
What about you, what do you think of these tips, do you have one in particular? I’ll read you in the comments.
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