Tips For Beginner Day Trader In Cryptocurrencies
Cryptocurrencies are a result of the Bitcoin whitepaper published by Satoshi Nakamoto on October 31, 2008. Nakamoto wanted a currency that is independent of the government or a central controlling authority. There were a lot of digital currencies that were launched before Bitcoin, but none of them ever got traction like Bitcoin.
The financial crisis of 2008 made it more evident that there was a need for an alternative form of currency and hence cryptocurrencies came into existence with the whitepaper of Bitcoin. There certainly are a lot of exchanges that allow you to buy cryptocurrencies, to name a few, Coinbase, the poster child to all exchanges in the US, Kraken etc. Binance is the world’s largest exchange in the world.
Trading in cryptos is both profitings if done right, or one can lose their capital easily. The best and most helpful mantra for investing is, “Only invest what you can afford to lose.”
10 Tips For Beginner Trader
Below are the 10 important rules one has to follow to become a successful trader.
1. Do your own research
This is the most important thing, as there are a ton of people with a ton of opinions about a ton of coins. Never blindly follow a person and their words when it comes to trading. Every project has a whitepaper, a team of people working on it to reach the goals.
Read the whitepaper to get the gist of the project. Some projects may sound interesting but might be far-fetched and disconnected from reality, investing it would only cause you loss. Before you start investing in a certain coin, do thorough research on it.
2. Plan before you invest
It is very important to plan your steps in advance and not head first, blindly. Decide the capital you want to invest and prepare your portfolio accordingly. Portfolio, in general, must contain low-risk coins if you have don’t want to lose your capital.
3. Select your coin
There are 1000s of tokens available in the crypto world, so be careful, do your own research about the coin and the team. Stalk their GitHub, look at their tweets, make sure the project is legit before you invest in it.
4. Check the price
This is very important, as most people get into FOMO’d into buying tokens at the top and then complain when the price of the coin starts correcting itself. It is important to make sure the price hasn’t topped before you buy into a coin.
5. Use indicators
There are a ton of indicators present on the internet and most are free to be used. Using these indicators will allow users to give us an idea of how the market might possibly move.
6. Set up price levels
Buying low and selling high is a mantra that most of the people tend to follow, while it might not be wrong, we need a more strategic plan than that. Hence it is important to set price levels to sell if there is an uptrend, or a price level to sell if there is a downtrend, hence avoiding losses
7. Be happy with smaller profits and don’t get greedy
As a trader in crypto space, it is better to make sure to use the volatility of the market and aim for short-term profits and compound them over the days to get a massive pay-day in the end. Aiming for a home run on a single coin is foolish and will end up causing you to lose money.
8. Stay in the game
Most people give up and sell their coins and then lose out when the payday comes. So be patient and believe.
9. Be disciplined
90 percent of traders lose their money just because they are not disciplined and are greedy. So it is always advised to have discipline and strategy before you start trading.
10. Always store your funds in Cold wallets
This cannot be stressed enough. This is probably the most important rule you need to follow as a trader. More than $40 million in cryptocurrencies have been stolen by hackers. It is always recommended to get a cold storage wallet to store all your coins or funds.
There is a complete guide about trading, be it, the use of indicators, or analysis patterns and charts. A comprehensive guide on trading in cryptos, coming soon.
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