For some time now, I have been closely watching the performance of cryptocurrencies to see where the market is headed. The routine my primary school teacher taught me – where you wake up, pray, brush your teeth and eat breakfast has changed a bit to wake up, pray and then go online (starting with coinmarketcap) to find out what crypto assets are. Red.
The start of 2018 was not pretty for altcoins and related assets. Their performance was hampered by frequent bankers’ opinions that the crypto bubble was about to burst. However, ardent cryptocurrency followers are still “HODLing” and are actually reaping the big bucks.
Recently, Bitcoin returned to almost $5000; Bitcoin Cash approached $500, while Ethereum found peace at $300. They got almost all the coins from newcomers who were still in the excitement phase. At the time of writing, Bitcoin is back on track and trading at $8900. Many other cryptos have doubled since the start of the uptrend and the market cap is resting at $400 trillion from a recent peak of $250 billion.
If you are slowly warming up to cryptocurrencies and want to become a successful trader, the tips below will help you.
Practical tips for trading cryptocurrencies
• Start small
You’ve already heard that cryptocurrency prices are on the rise. You’ve probably also heard the news that this uptrend won’t last much longer. Some naysayers, mostly esteemed bankers and economists, usually call it a get-rich-quick scheme with no stable foundation.
Such news makes you invest in haste and if you don’t apply moderation. A little analysis of market trends and currencies worth investing in can guarantee you a good return. Whatever you do, don’t invest all of your hard earned money in these assets.
• Understand how exchanges work
I recently saw a friend of mine post a Facebook feed about a friend of his going into trading in an exchange, and he had no idea how it worked. This is a dangerous move. Always review the site you want to use before you register, or at least before you start trading. If they offer a fixed account to play with, take that opportunity to get a feel for what the dashboard looks like.
• Do not insist on negotiating everything
There are more than 1400 cryptocurrencies to trade, but it is impossible to deal with them all. Extending your portfolio to a larger number of cryptos than you can effectively manage will decrease your profits. Select some of them, read more about them and how to get trading signals.
• Stay sober
Cryptocurrencies are volatile. This is both their misfortune and their benefit. As a retailer, you must understand that wild prices are inevitable. The uncertainty of when to make a move makes him an ineffective trader. Leverage hard data and other research methods to ensure when a trade should be executed.
Successful traders belong to various online forums where cryptocurrency discussions about market trends and signals are discussed. Sure, your own knowledge may be enough, but you have to rely on other traders for more relevant data.
• Diversify wisely
Almost everyone will tell you to expand your wallet, but no one will remind you to deal with currencies that have real-world uses. There are some crappy coins you can deal with for quick cash, but the best cryptos to deal with are the ones that solve existing problems. Coins with real-world uses have been less volatile.
Don’t diversify too early or too late. And before you make the move to buy any crypto asset, make sure you know its market cap, price swings, and daily trading volumes. Maintaining a healthy portfolio is the way to get big from these digital assets.