Dos And Don'ts of Crypto Trading and Investing
It has been more than a decade since Bitcoin’s first big leap. You’d think that at this point, many people would be cryptocurrency trading savants. However, a lot of traders still lose huge sums of money or don't make a profit because they don't know when, why, or how to sell (or hold) their crypto. Or, in the language of r/WallStreetBets degenerates, when to have diamond hands or go paper hands.
But it’s probably unwise to turn to gambling wastelands like WSB or other investing subreddits and forums as trading cryptocurrencies is a lot more complex than trading physical commodities. Like traditional investing, however, crypto trading also often requires a huge financial risk that could leave you bankrupt. Or, if you play your cards right, make you a crazy large profit! Here are some dos and don'ts of crypto trading and investing:
DOs
Monitor Your Trading Activity
To maintain a constant crypto winning streak, traders must monitor their progress and make continual improvements to their trading methods. The key to continuously making money while trading the bitcoin market is to study your trading behavior and adjust your strategy to eliminate any discrepancies. By monitoring your progress, you may also assist yourself to avoid any significant trading traps that you might miss during trading sessions.
Keep An Eye Out For Dips
It’s basic knowledge that the crypto market is volatile. But volatility that’s not always a negative thing. When trading is volatile, the price swings widely. There is no way to forecast when the price of cryptocurrencies will decrease because they are unregulated by businesses, brands, or anything else, and their value is solely determined by supply and demand. Noob investors will just purchase cryptocurrencies at the present price while experienced ones will watch for a price down following a protracted increase in order to make more money.
Do Your Own Research
DYOR! Educate yourself about the basics of investing, the cryptocurrency market, and the many aspects that lead to secure and productive trading conditions. You can never study enough about the market to avoid a loss, but the key is to prepare yourself so that you can identify the key trends with more precision than the ordinary trader. In short, you ought to be more accurately capable of linking market changes than the ordinary trader.
DON’Ts
Never Trust Advice You Read Or Hear On Social Media
Social media can have both favorable and unfavorable consequences when it comes to crypto trading. Numerous trade gurus, financial advisers, crypto evangelists, blockchain experts, and other similar figures may be seen gracing various platforms at forums online. Stay away from them! You should avoid using social media information in your trading techniques since the abundance of information might be counter-intuitive, especially for noob traders. Of course, you can always use them as a guide, but never let them be your only consideration when making transactions.
Avoid Acting On Impulses, FOMO
When the market shifts, it's simple to become panicked and make bad cryptocurrency judgments. It's enticing to invest right away when prices begin to fluctuate in order to limit prospective losses. Alternatively, you could wish to properly utilize a tip. In either case, it's crucial to exercise restraint and refrain from acting on impulsive emotions while making investments. Even the most knowledgeable investors make this error, but with experience, it can be avoided. Your best course of action is to entirely avoid impulse trading.
Dispel the FOMO within you. I know, hearing from a buddy or coworker about the meteoric ascent of a crypto asset while also being aware that you missed out may be difficult. But think about using the “dollar-cost averaging” technique rather than blindly attempting to predict the market. This approach involves making regular, little investments. The market will fluctuate between high and low points at various periods, and average out over time, relieving the burden of attempting to “buy the dip.”
Investing On New Or Unknown Cryptocurrencies
You will stumble upon a coin that guarantees astronomical earnings in a short period of time. Or, at some of the other instances, you will be “lucky” to have the chance to invest in an emerging cryptocurrency project that is certain to go to the moon and rise in value over the next few days at the ground level. These are rarely true. And you should never trade any unproven crypto projects without conducting adequate study until they have been demonstrated to be reliable, safe, and secure.