Practical Tips to Excel at Crypto Trading

The world of cryptocurrency is exciting to say the least and vastly profitable to say the most. As a crypto trader, you’re giving yourself a real opportunity to change your life for the better financially while participating in a field that can be argued to be at the forefront of the future of humanity.

Despite all the opportunities offered by the cryptocurrency markets, however, it can still feel a little overwhelming to be a crypto trader. The market is very volatile and so, at any given time, you could potentially be one of the richest people in the world, or you could potentially lose your shirt. It does help, therefore, when you get a few tips to help you navigate the murky but rewarding world of cryptocurrencies. Here are a few tips to get you well on your way.

Never Invest More Than You Can Lose

One of the hallmarks of the crash in the cryptocurrency market that happened in January this year is how hobby investors got burned. In fact, there were plenty of cases of traders breaking their desktop monitors and smashing their laptops as they tried to vent out their anger and frustration at the market. Why do you think they did that? The answer is simple: they had lost more than they could afford to lose, and they were angry and frustrated because of that.

To avoid being in that situation yourself, here is a rule you should put first before any other rules in your trading. This rule should be your numero uno: Never risk more than you can afford to lose. You should never forget that rule. You can always lose money when you’re dealing with cryptocurrency. It’s not just about financial losses. It could be losses from theft, software bugs and even government regulation that could make you never see your money again.

The minute you buy cryptocurrencies for the purposes of trading, you should assume you’ve already lost that money. Make sure you only invest what you would not be bothered by losing. Only then will you prevent a disaster in your trading from being converted into more disasters in the rest of your life.

Bitcoin Is King

Every altcoin out there is closely pegged to bitcoin. In fact, the pegging is even closer than the pegging of other currencies to the dollar. If the price of bitcoin suddenly surges up, then you can expect the prices of a majority of altcoins to fall as investors try to put their money into bitcoin. On the other hand, if the price of bitcoin drops too drastically, then altcoins can go down with it as investors across the crypto market panic.

Diversify

Of course, it makes sense that you stand to make more money from a coin if you invest more money initially. That argument is irrefutable. What makes it a poor decision is the other side of the coin: the side that tells you that you also stand to lose more money from a coin if you invest more money in it to begin with.

A fact of the cryptocurrency markets is that the market capitalization of cryptocurrencies as a whole will only go up with time. However, which cryptocurrencies will lead this onslaught and which ones will be laggards is up for debate. It is, therefore, in your best interest to diversify your investments across a wide variety of cryptocurrencies from the start. As an example, while bitcoin has grown 34 times between January 2016 and January 2018, verge has grown a whopping 30,000 times. You would have made money if all of it was invested in bitcoin, of course, but you would have made a lot more money if some of it was invested in verge.

Go for the Most Efficient Trading Methods

For you to be able to make money, you should always shoot for efficiency. That starts with having effective trading strategies that allow you to extract a profit from the markets a lot more frequently and consistently than other strategies. You should also consider using trading bots that will trade for you around the clock and allow you to use your time more efficiently researching new trading strategies and studying the market, rather than watching the screen and waiting to place a trade. Trading robots like Bitcoin Loophole and others are plenty and come in all shapes and sizes. You can pick the best by first reading their reviews online.

Do Not Be Greedy

Many a trader has given in to the temptation to keep holding a coin in the hopes of more profit when they were in the money, only to watch it dip later and wipe out all the progress they had made. When you are making a profit, always take a small profit out little by little as the trade goes your way. That way, you get to take full advantage of the trade and reduce the risk of being caught in it when things start to go south.