Crypto Trading is not all about knowing how to set an order, choose a currency, and yearning for sweet profits. It requires some knowledge, a well-sought plan on what to do, and how to react if the volatility hits. All of these are crucial when the odds are against you. One thing is to subscribe to one of the best crypto signals providers who do the job for you by managing risks and sharing the best crypto coins to trade.
Here are some dos and don’ts of crypto trading:
Treat crypto trading as a business
You ought to know that every business has both returns and expenses. The foremost challenge is to minimize losses and preserve the returns over time. Think like a CEO! To run a business, you would require to keep track of all the profits and expenses. So, you should apply the same while crypto trading.
Never follow “Self Declared Experts” or celebs blindly
There are a lot of so-called ‘Crypto Gurus’ bragging about their expertise in the field. You can easily find them on every nook and cranny of the Internet. Well, the reality is far different than what meets the eye.
You must do your research before investing since cryptocurrencies are too volatile for anyone to predict the happenings of the next hour.
Do not hop into crypto with low liquidity
Liquidity in its simpler terms- the ease with which these decentralized curries can be bought and sold. You may not be able to sell crypto at the right time if it has low liquidity. It might lead you to stick with the currency instead of making a profit.
Don’t chase the price
Often, newbies tend to buy a coin if they see a rising price on a chart. It is not something you must do. Most newcomers fear they will miss out when there appears an ascending price. But it is not always the case.
Don’t Use Leverage
Trading with leverages is what you must avoid strictly. If you are a newbie, you will only make things worse. The reason is you have to pay it back no matter what. It is a risky move even for the pros.
It should only be utilized by veterans who have a thorough knowledge of crypto trading. Margin Trading is equivalent to gambling for people with little to no experience in the field.
Don’t try to time a market.
If you look back, everything makes perfect sense now. You may regret not buying crypto when it was undervalued or not selling at its peak.
Reality check, this regret won’t lead to any conclusion. Do your much-needed research first. Post that, if you think the crypto your holding is overvalued, go for the sell. Do the reverse in the exact opposite scenario, and that’s all!
Learn to use Crypto wallets
If you accidentally delete your crypto wallet, you will lose all your Crypto if it is not backed up! It is better to learn how to use different crypto wallets- Hardware, software, and the paper kind. Read more about the best crypto wallets.
Don’t fiddle with derivatives if you are new to this game
Derivatives are financial tools that attain their value from some assets. It could be like crypto prices or interest rates to name a few. Derivatives can be extremely risky- consider them as a gateway to your financial disaster!
If you are unsure about it, stay away from derivatives, and you’ll be good.
Don’t buy Non-Fungible Tokens (NFTs) if they have no exclusive rights to offer you
Non-Fungible Tokens (NFTs) popularity is through the roof lately. We hear pixelated images (like animated artworks) sold for millions. Please stay away from this rattrap.
To put it simply, if an NFT does not bestow you with some exclusive privileges, the wise thing would be to avoid it!