Years of experience in trading cryptocurrencies give you the most effective trading tips. Thanks to this straightforward guide, beginners can avoid the most common mistakes and make the most out of their money. Follow These Tips When Investing in Cryptocurrency. Try these ideas and see if they can help you.
In this article, we will share some pointers with you that are going to help you a lot with your new investments. Whether you are new to crypto trading/investments, or you have experience already we will look to help you today.
Our goal before we bring this article to a close shall be to help you understand some of the best tactics to use when holding any kind of cryptocurrency. So, be sure to bookmark this page and make any notes where you feel necessary.
Maybe we will not cover everything but what we do you can be sure will definitely be useful. With this in mind let’s get this ball rolling. For perhaps some of the most exciting times ahead… because let’s face it this is an opportunity that you certainly DO NOT want to miss out on.
Tips When Investing in Cryptocurrency
1. Avoid Crypto Scammers
There are a huge number of scammers out there waiting for your money. Since even before I began investing in Crypto I was coming across these people. Through emails, Facebook etc. I am fortunate really that I never got sucked in by any of these scams. Although, when I think about it if only I had acted back then on just generally investing in BTC or ETH.
However, I do understand why I was so weary of these people. it can be hard to tell the difference between genuine cryptocurrency recommendations and scams.
Action Fraud, the UK’s fraud-alert service, reports 557 crypto investment scams were reported in 2020 alone. Of these reported cases victims of these crimes lost an estimated £113 million (GBP). And this is just ONE COUNTRY! [R]
Therefore, whenever you’re confronted with a lot of information on a cryptocurrency, it’s important to step back from the hype. Analyze the project critically. What is its user base? For what purpose is it being developed?
What is its connection to the industry?
Stay away from coins offering the moon but not anything else with any real-world use. I mean OK DOGECOIN we all know what happened there but seriously don’t always believe in the hype. A lot of coins are really not worth peoples time.
2. Take Risk Management Seriously
It is possible that some people providing crypto trading tips aren’t looking out for your best interests. Do not make the same mistake others have made in the past. Be careful. It is possible to find legitimate opportunities. Some might contact you as they are affiliates looking to gain a commission. Others could be brand influencers. Be sure to do your research.
Do not allow yourself to invest more than you can afford to lose in any digital currency.
Set limits on how much you want to invest. Traders in a lot of cases lose more often than they win. Crypto Staking and Cloud Mining are perhaps 2 of the more risky types of investment when it comes to cryptocurrency trading. However, many Crypto Training Courses and Paid Newsletters may also burn a very big hole in your pocket.
3. Diversify Your Crypto Portfolio
An excess of investment in just one cryptocurrency will not always pay off. Sure it might. I can think of many good examples here. Bitcoin, Ethereum, Litecoin and Monero even. If you invested in them at the right time and sold at the right time you could have made a lot of money depending on your overall assets.
However, yes if you are making investments on more short term gains then it is probably better to not put all your eggs in one basket. This way your bases are covered if you need to hold on to one of your Crypto Investments for longer.
Distribute your money across different digital currencies as you would with stocks and shares.
Maybe don’t spread yourself too thin but cover your bases. It might be that one of your investments crash in price. It could be that this will go back up high in the future but you may need to wait it out.
If you have another investment in something else you might be able to profit from this in the meantime. It is also good practice for the future as you become more experienced in Crypto Trading.
Just know that the market prices of these investments are so volatile. In this respect you don’t risk becoming overexposed should one of them plummet in value. Choose wisely among the thousands of different options available.
4. Put Your Money Where Your Mouth Is
Traders who are not experienced are often led into panic selling. When prices are low the markets can change dramatically on a day to day basis. This can be a good thing sometimes. Of course, it can mean that you can profit quickly. At other times you might not be so lucky.
Things can always go the other way. Although, It isn’t always bad news as much as it might seem at the time. If your Crypto Investment goes south it could just mean you need more time. Many that sell too early will see this. If only they had given it longer they would have seen their investment flourish.
Too many people often make this mistake. Selling too early. The fact of the matter that must be considered is there’s no indication that cryptocurrencies generally speaking are going away anytime soon.
Some will for sure but for others there is definitely a long term future. The trick is knowing what to buy, when to get in and when to get out. Once you can understand these core principles you can be a lot more successful.
What you should understand is that this might be a fairly quick process that takes a matter of months. Or it could take several years. How Crypto will fare in the decades to comes is very hard to tell. Due to its volatility, making gains on your Crypto Investments can always happen a lot sooner.
Just be ready when the time comes and make sure you know how to react when these gains happen
5. Set Up Automatic Buy and Sell Prices
In the same way as with regular stocks and shares, automating your crypto purchases can enable you to take advantage of dollar-cost averaging (DCA). Coinbase and Gemini both allow recurring purchases on their cryptocurrency exchanges.
Crypto investors use this service to tell the platform to automatically buy a fixed amount of their favourite cryptocurrency every month – e.g., $100 worth of bitcoin. When prices are high, they receive less currency, and when prices are low, they receive more. This can definitely be a good idea if you want to accumulate your assets.
Buying or selling currencies at the lowest possible price or at the highest possible price alleviates the stress of trying to time the market. A difficult thing to do even with the very best of market professionals.
You can also set up algorithms to buy and sell Crypto when they reach your predicted prices. This can be good practice if you are not able to closely monitor your investments. Unfortunately, though not all exchanges offer this service.
6. Identify Assets Based On Research
The final one of my Tips When Investing in Cryptocurrency I think I’ve mentioned THIS already. Anyhow, I just want to elaborate on this further. If you are new to the Crypto Markets you likely will not know what assets to buy in the beginning. Many out of the loop will have heard of Bitcoin. Some will have heard of Ethereum but everything else…?
I mean the average joe if I asked them I doubt they would be able to name 5 or even 10 different Cryptos.
Even though there are over 6000 different Crypto Assets available to buy. When my parents ask about my Crypto Investments they always say “How Is Your Bitcoin doing?” lol. Even though I don’t really invest in Bitcoin. I mean I do a bit but this just goes to show much the general public know about Cryptocurrencies.
It is for this reason (if you don’t know) that you should do your research. You might see a coin and think wow that is cheap but why is it cheap? Ask yourself that question. Just like with anything that is cheap.
I actually love a bargain and very often they are out there but like a cheap toy that breaks within 5 minutes, there are good reasons why some things are so cheap. It is not just cheap coins though any investment you should always research.
Tips On How To Conduct Research Into Crypto
If you have found a coin that looks good that you are thinking about investing in ask yourself these questions first.
1.) What Does This Cryptocurrency Do?
2.) How Is It Different From The Others?
3.) What Are Its Features?
4.) Does the Website Give Much Information?
5.) What Updates Are Planned?
6.) How Much Is The Circulating Supply and Coin Market Cap?
Also, I would say in 2021 and beyond maybe look for as well what Privacy Features this coin has.
In Conclusion – 6 Tips When Investing in Cryptocurrency – Final Thoughts
Of course, you should be able to spot when someone is trying to scam you this is my first tip. Try and look into what this person’s game is. Ask them the right questions to try and determine their legitimacy.
Manage your risks. Before you make your investments take into account the risks. Is it a legit opportunity and can you afford to pay the amount you plan to spend? Also, what are you letting yourself in for with your Crypto Pick?
Then diversify your assets. This is a good idea and put your money where your mouth is. If you think you could be onto a winner then do something about it. Take action.
Finally, use whatever tools and resources you have at your disposal. if you have ‘buy and sell prices’ and you can automate the process then do so. This will certainly help as will doing your research before you spend any money.
Thank you for reading my 6 Tips When Investing in Cryptocurrency. If you would like to leave any feedback or if you have any questions please let us know in the comments section.
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Alex B Chivers