5 things newcomers to the cryptocurrency market should know
“If only I knew…” We all want to avoid unnecessary risks and losses. A well-known trader Potato McGruff has a great experience, and he decided to share it with the newcomers, so that they would not do the same mistakes. It's important to raise your own bumps, but you will eventually have it, it's better to learn about all the sensitive issues in advance.
- Define your style
There are three types of traders:
- Day trader: works one day.
- Swing traders: work every 2 – 7 days, sometimes longer.
- Investors: buy the dips, hold the position for a long time.
Each has its own strategy, you can combine it as you like. You don’t have to make deals every day: sometimes you can skip it, waiting for the right moment to come. Your actions should be well reasoned, otherwise the trade turns into a kind of roulette.
- Calculate the real cost of the cryptocurrency
You should know how to calculate the cost of virtual currencies, so that you do not lose money, blindly investing at the peak of value. Negligent attitude is extremely expensive. To understand the potential of cryptocurrency and set realistic expectations, divide the capitalization by the number of coins in circulation. You will get an accurate number: are you sure the capitalization will grow to such a degree?
- Doubt: Twitter is the best friend and... the worst enemy
This is a good source of information, but it is a little preconceived. The vast majority of people who publish their charts in Twitter have already bought cryptocurrency, and are trying to move the market in the direction they need.
Doubt. Check the indicators. Find technical analysis classes, conduct a study, and explore Twitter: if a person has many subscribers, it does not mean he is right.
- Follow the general advice
Do not fuss. Everyone can miss great opportunities, there will be others, perhaps even better. Relax. Does your cryptocurrency become cheaper? Review your analysis. Is the development team reliable? Is the currency being used in real payments? Were your expectations realistic? If yes, just wait – this currency will grow. And if you faced an exception, it’s ok, it all happens.
A common mistake for newcomers is to follow the market leader, you can lose eventually. If your goal is to get a position on bitcoin, do not check other currencies at all.
Use a hardware purse and two-factor authentication via a special device or application (for example, Google Authenticator). Use a unique password for each exchange. Let them be in your bookmarks: phishing sites will monitor your Google search results, and start pushing their position in the top search results or place fake advertisement.
- Do not trade alone
Together is more effective: you have no opportunity to exchange ideas, analysis and new knowledge if you are alone, so you lose an important advantage. There are paid associations of traders, if you decide to join such a group, it is better to choose an educational community. If the paid community is not for you, sign up for a free trader forum with a good rating, there are many such services.
Be patient: the market is unpredictable and extremely unstable. It's pretty easy to get money, it is difficult to save it: do not let your greed drive you. There will always be another promising cryptocurrency, you will have your chance!