By William Benetton
Long gone are the days when cryptocurrencies and trading them were a novelty. Nowadays, Bitcoin and Ethereum alongside other less-popular tokens such as Dogecoin or Litecoin are trending. And when something is so popular, people usually rush to be part of it. Add the FOMO (Fear Of Missing Out) phenomenon to the mix, and you get millions of people that want to invest in crypto and boost their profit through trading.
Just like with any other popular movement, there are lots of ill-intentioned individuals that try to steer people in the right direction. Therefore, you’ll find tons of cryptocurrency tips that are spread with the sole purpose of taking advantage of the ones taking their first steps in this domain. That’s why we decided to write this article with valuable information and valid cryptocurrency tips and tricks on how to improve your chances as a crypto trader.
Most Important Out of All Cryptocurrency Tips – Disregard the “Noise”
You’ve just started trading, and it’s natural to try and find people with authority in the crypto field to follow and learn a thing or two. While this is a very good approach, you should be very careful selecting your trusted sources. And, most importantly, make sure to ignore all the noise coming from various media outlets and financial institutions (in some cases even National Banks and entire governments) doing everything in their power to downsize this phenomenon.
You’ve probably heard it already: “crypto is a bubble”, “the digital currency is just a fad”, or even “it’s a pyramid scheme”. If you’re reading this, then you already know all these voices shouldn’t be listened to even for one second. However, we’re here to remind you not to let yourself be influenced by any of it. Do your best to cancel out the noise around cryptocurrency as a whole, or various developments. Stay true to what you believe in and don’t let anything or anyone influence you.
Be Prepared for Unexpected Events
This one could easily go under “Cryptocurrency trading tips for beginners” but it must be said. While ignoring the noise surrounding the crypto topic, you should be aware that the market comes with significant volatility. More often than in traditional markets, the prices can swing massively, and it can be scary for someone taking their first steps. However, if you mentally prepare for these unfortunate events and follow a strategy, you should be able to act rationally and leave emotions behind when the price drops.
Learn How to Identify an Unhealthy Investment Strategy
People out there that are trying to teach you how to trade cryptocurrency daily through various podcasts, YouTube streams, and other channels, will tell you just about anything to get you hooked. These “pump and dump” communities, as often referred to, will promise a secret recipe for profit on certain coins with a fail-proof strategy. That’s like someone would come and tell you they have the secret of always winning on Book of Ra online slots. A quick Google search and you’ll find out these slots are controlled by a Random Number Generator and there’s no such thing.
And while you’ll be needing a strategy to get closer to success, until you figure out your own, it’s vital to know how to identify these scams that only try to take advantage of you. After all, if someone actually had a bulletproof cryptocurrency buying strategy, why would they share it with you?
Instead, take your time to do proper research and determine which cryptocurrency to invest in, and try to learn from previous events when developing a strategy. Just like they say in Book of Ra, don’t spend money you can’t afford to lose.
Don’t Put All Your Eggs in One Basket
This one doesn’t even have anything to do with cryptocurrency strategies, actually. It’s straightforward, sound advice for anyone investing in anything. No matter how appealing a certain coin may seem, try to diversify your investment portfolio as much as possible.
Going back to the second tip in this article, this type of thinking will help you work your way around sudden price drops. Sure, cryptocurrencies are often influenced by one another, and we could witness a clear domino effect a couple of times already. However, the chances of several coins to drop massively are still relatively low.
Make Sure You Fully Comprehend the Notion of Hot and Cold Wallets
This advice falls under “cryptocurrency security tips” and while it won’t give you ideas on how to succeed in crypto trading, it helps you stay away from fraud, theft, and anything in between. If you’re still new to the terms in the crypto industry, a cold wallet is a physical cryptocurrency storage device that enables you to keep the coins offline.
On the opposite hand, a hot wallet is its online counterpart. And it’s easy to see why hot wallets are more desirable since you have easy access, there’s no extra expense with buying the physical wallet, and the list can go on. However, the online wallets are also susceptible to hacking and cybercrime.
The best way to approach this would be to keep the cryptocurrency you plan to hold for a long time in a cold wallet and only use hot ones for amounts that you trade more often.
And since we’re on the topic of wallet types, if you want to know how to trade cryptocurrency successfully, you should never mistake a crypto exchange for a wallet. There’s a common saying that goes like “if you don’t own the keys, you don’t actually own the cryptocurrency” and that’s exactly what happens when you keep your coins at exchanges. We’re not going into details on how to make a cryptocurrency exchange or what are the other downsides of sticking exclusively to these entities. But if you want to call yourself a crypto trader, you need to set up a wallet.
Final Thoughts on Cryptocurrency Tips
We mentioned a couple of times that there’s no secret recipe or fail-safe advice you can get to succeed in crypto trading. While these tips should help you get off to a good start, they’re not enough to make you a good trader. Just like riding a horse, you’ll need to get in the saddle and experience the real thing to actually learn and improve. And that’s why we invite all readers with crypto trading experience to use the comments section and share their stories. Let’s all give a helping hand to those that want to join and need guidance.
About the Author
William Benetton is a famous writer, professional photographer and web-designer. Last few months he has been creating interesting, informative blogs and websites. If you want to contact William, please check his Facebook. He can’t imagine his life without sport, travel and morning coffee.