Currency plays an important role in the trade and economy of a country. The higher the value of the currency the better it is for a country. For example, most of the currencies of different countries in the world are compared
with American dollars to determine their value. This is because the American dollar is one of the most valuable currencies in the world. But all of the currencies in the world are centralized currencies. That is each currency is distinct to its country and has a centralized banking system that is controlled by the government. The government is in charge of making the currency and bringing it into the market. In recent years there is another type of currency that has become popular among traders in the world. That is cryptocurrency.
Cryptocurrency is the digital currency that doesn’t have a physical form but a digital value depending on which currency you are using. Some cryptocurrencies are centralized and some of them are decentralized currencies. The currency which is created before in order to issue later and has a central banking system is centralized cryptocurrency. Cryptocurrencies that are decentralized use distributed ledger technology like Blockchain.
First cryptocurrency that was ever created is Bitcoin. It was created in the year 2009 by Satoshi Nakamoto. After that, a number of cryptocurrencies were created but none of them are as popular and valuable as Bitcoin. All the cryptocurrencies other than Bitcoins are referred to as altcoins. Which means they are alternatives to Bitcoin. Trading cryptocurrency has become one of the most profitable things in recent times. But there is still no effective strategy to gain profits every time. This is because the value of cryptocurrencies keeps fluctuating.
So if you are new to cryptocurrency trading then here are 10 tips that will surely help you.
Learn about cryptocurrency
This is the most important thing a beginner has to understand. Learn completely about something that you have never done before. This makes you prepared for what you might encounter. That is because you know more or less what you are getting into. This is more important in the case of cryptocurrency trading because this is a fairly new market. You cannot expect to be a good bitcoin trader if you know nothing about it. The value of any cryptocurrency is not constant. They keep on changing depending on other digital currencies. Learn about the cryptocurrency you want to invest in. Study its history and its current market value.
Select a good cryptocurrency trading website
You might have full knowledge of cryptocurrency but what good is it if you lose it to a scamster. While the rise of cryptocurrency has provided a lot of trading options for businessmen, it also provided a new way for hackers and scamsters to loot these people. Most of the victims of these scams are new people who are trying to enter the business. So it is essential to choose a reliable website through which you can trade. Because these trading websites are the ones that take care of your transactions. Most of the scams occur through the websites because the cryptocurrency itself is encrypted and hard to steal. So they try to steal them through fake trading deals. Create a demo account on websites and see if they are legitimate and reliable.
Know how crypto trading works
Just like how the stock market requires you to have immense knowledge about stocks. Crypto trading also requires you to understand how it actually works. The value of the cryptocurrency keeps on changing on a regular basis. So one cannot expect to have profitable trades all the time. This also does not mean that you will always be in loss. You must know when to buy and when to sell. One can learn this by keenly observing the market.
Always play safe
Since the market is quite volatile it is best if you play safe. Which means do not buy too much or sell too much of what you have. Because you never know how the market is going to change. Having 10% of the profit on each trade is better than waiting for a 100% spike. Do not trade more than 2% of what you have at a time.
Only trade when you have something to gain
Do not trade just for the sake of it or do not trade based on assumptions. Always trade when you are certain about earning a profit. It does not matter how small or big the profit is but it has to be a profit. Otherwise what even is the point of trading. Many of the experienced traders are trying to sell or buy from small investors. This is because they know they can easily trick the new ones in making them believe they are getting a good deal. So always be aware of what you are getting in exchange.
Have fixed targets
If you just invest and do some trading deals it is not going to take you anywhere. You cannot buy Bitcoins and expect them to increase in value so you could sell them for more profits. Keep trading and gain consistent profit. Increase the balance in your wallet by reaching targets set by yourself.
Don’t be afraid of missing out on
Like mentioned earlier the value of the cryptocurrency keeps changing depending on the market. The value of each cryptocurrency is dependent on others. The value for one specific cryptocurrency may increase in record time. But do not trust the hype as it is not going to stay there forever. As soon as the value of one cryptocurrency starts increasing everybody starts buying it. The next day the value may crash to an all-time low. So never feel like you are missing out.
Choose your altcoins wisely
After the release of Bitcoin in 2009 more than 6000 other cryptocurrencies have been created. So you can just imagine the sheer number of cryptocurrencies that are available in the market. However, not all of them are as valuable as the competitors of Bitcoin. So always invest in altcoins that are traded in huge volumes in the market.
Make trading buddies
One cannot know everything about cryptocurrency trading or anything for that matter. It is better to gain knowledge from other people who are in the stream. Especially if you are new in the business. There will be lots of people who would have been in this business for a long time. Ask them suggestions because their expertise will help in the long run.
Learn from your own track record
There are some things that you have to learn by yourselves. Not everything can be taught by someone. You have to learn some things from your own experience. After you have done a significant amount of trading just look back at your own track record. Not all of them might have resulted in profits but it will give you a perspective on where you stand currently. Examine if you have actually gained more or lost more than you expected. Learn where you have gone wrong on the trade deals and where you have made the right choice. This will help you in making better trade deals in the future.
Cryptocurrency trading is a fairly new market. Bitcoin was the first cryptocurrency that was ever created. After that, a large number of different cryptocurrencies emerged. Cryptocurrency trading has become one of the most profitable things within a decade. But new people who want to enter the market have to be very careful. They must have great knowledge about cryptocurrency and trading them. One has to choose a legitimate website that will offer reliable service. Invest in altcoins that are backed by the cryptocurrency community and traded in huge volumes. Make friends in the community and use their expertise. Never think about losing out good deals. Don’t trade more than 2% percent of what you have as the market is very volatile. Make sure you learn from your own mistakes to avoid them in the future.