For some time now, I have been closely watching the performance of cryptocurrencies to get an idea of where the market is headed. The routine my elementary school teacher taught me, where you wake up, pray, brush your teeth, and eat breakfast, has been modified a bit to wake up, pray, and then go to the web (starting with coinmarketcap) just to find out what crypto assets are in the red.
The start of 2018 was not a pleasant one for altcoins and related assets. His performance was affected by the frequent opinions of bankers that the crypto bubble was about to burst. However, avid cryptocurrency fans are still “HODLing” and, truth be told, are reaping huge profits.
Recently, Bitcoin fell back to almost $5,000; Bitcoin Cash approached $500 while Ethereum found peace at $300. Pretty much every corner was hit apart from the newcomers who were still in the excitement stage. At the time of writing, Bitcoin is back on track and is trading at $8,900. Many other cryptocurrencies have doubled since the uptrend began and the market cap is at $400 billion since the recent high of $ 250 billion.
If you are slowly getting used to cryptocurrencies and want to become a successful trader, the following tips will help you.
Practical tips on how to trade cryptocurrencies
• Start small
You have already heard that cryptocurrency prices are skyrocketing. You’ve probably also gotten the news that this uptrend may not last long. Some detractors, mostly esteemed bankers and economists, often call them get-rich-quick schemes without a stable base.
This type of news can make you invest in a hurry and do not apply moderation. A little analysis of market trends and cause-worthy currencies to invest in can guarantee you good returns. Whatever you do, don’t invest all your hard-earned money in these assets.
• Understand how exchanges work
I recently saw a friend of mine post a Facebook feed about one of his friends who happened to trade on an exchange that he had no idea how it works. This is a dangerous move. Always check out the site you intend to use before signing up, or at least before you start trading. If they provide a dummy account to play with, take that opportunity to learn what the board looks like.
• Do not insist on changing everything
There are more than 1400 cryptocurrencies to trade, but it is impossible to deal with all of them. Spreading your portfolio to a large number of cryptos that you can effectively manage will minimize your profits. Just select some of them, read more about them and how to get their trading signals.
• Stay sober
Cryptocurrencies are volatile. This is both his downfall and his blessing. As a trader, you need to understand that wild price swings are inevitable. The uncertainty of when to make a move makes you an ineffective trader. Take advantage of hard data and other research methods to be sure when to execute a trade.
Successful traders belong to various online forums where cryptocurrency discussions regarding market trends and signals are discussed. Sure, your knowledge may be enough, but you need to trust other traders for more relevant data.
• Significantly diversify
Virtually everyone will tell you to expand your portfolio, but no one will remind you to deal in currencies with real-world uses. There are some bad coins that you can deal with for quick money, but the best cryptocurrencies to deal with are the ones that solve the existing problems. Currencies with real-world uses tend to be less volatile.
Don’t diversify too early or too late. And before you make a move to buy any crypto asset, make sure you know its market capitalization, price changes, and daily trading volumes. Maintaining a healthy portfolio is the way to make huge profits from these digital assets.