Beginners Guide: Trading Cryptocurrency
Cryptocurrency is a topic in everybody’s mouth for quite some time now. A lot of people are getting involved in Trading Cryptocurrency, and you don’t want to be left out. It seems like an easy and fast way to make money, and it is not entirely true. Sure, you can make a lot of money, if you know how the cryptocurrency market works, but it won’t happen overnight. Because the cryptocurrency market is open 24/7, you have to do a lot of research to be prepared for successful trading. Here are all the necessary tricks and tips to help you upgrade from a beginner to a cryptocurrency pro.
Find a Trust-Worthy Broker
Searching for the perfect broker, that you can trust might be a challenging task. Many crypto agencies offer their help and expertise, so naturally, it is easy to get lost in the crowd of different offers. There are four main aspects you should take into account while choosing the right broker. They are trust, fees, the inclusion of the cryptocurrencies you want, and leverage.
Start with looking up online sites that help with the choice, like Engine Forex. Then, once you have your options in front of you, compare fees and see if your broker is insured and has a proper license. Don’t forget about checking if the broker you like is trading the currency of your choosing. Choose the one that suits you best, and with whom you feel like you have excellent communication.
The Right Cryptocurrency for You
When you have your broker ready to double or triple your money, it is time to choose the currency you want to invest in. Selecting a digital coin with a high possibility of a massive return is what you should look for, but how to do it? The answer is simple, and it is proper research. The things you need to check are the infrastructure of the currency, the technology behind it, and the development team. You can also check out if the popularity of the cryptocurrency you are looking for is growing. The cryptocurrency you choose should be ticking at least three from all four boxes.
An important thing to remember is to determine where the price is at the moment. Is it high, or is it low? The old saying is, buy low, sell high, and it stands its ground when it comes to cryptocurrency. One of the hardest things to do in trading is the prediction of when the growth will stop and turn into a decline. To be able to analyse the situation on the market properly, you need experience and strong research. Focus, and become an expert in the crypto market analysis.
Short-term vs Long-term Trading Strategy
There are two major strategies when it comes to buying cryptocurrency, short-term and long-term trading.
First, let’s talk about the short-term strategy. The advantage here is that you can make high percentage gains on your trades. The cryptocurrency market, unlike traditional trading, is very flexible with the prices. They can even double overnight. There are also over fifteen hundred different cryptocurrencies out there, so plenty of options to choose from to go for a short-term investment. The disadvantage of short-term investments is that a lot of prices or growths are unpredictable. The rule that one day you are in, the next one you are out, applies here perfectly.
When it comes to long-term investments, you need to start by understanding the term “HODL”. It means hold on for dear life and gives a perspective on how long-term trading looks like in the world of cryptocurrency. The idea here is that you should hold on to your currency for a long time, years because even though it is very flexible, it will increase in the end. The obvious disadvantage here is the waiting process.
The best strategy you can have is to have both short-term and long-term investments in the range of your trades.
Create an Exit Strategy
If you desire to enter the crypto market, begin with an exit plan in your pocket. Buy at a low price, and be ready to get rid of all of your coins, once the price is right. The best time for leaving is when the prices are going high, and other investors start to sell. If you believe there is no more space for a particular cryptocurrency to grow, sell it immediately.
Cryptocurrency is yet another attractive way to invest your money. Hand your funds to a broker you can trust and make trades that will ensure you quick and solid returns on your investment. Do not worry if you lose some money from time to time. It is a part of the game. Stay focused and analyse the market like a pro, and you will become a crypto trading specialist in no time.