For some time now, I have been closely watching the performance of cryptocurrencies to understand where the market is headed. The routine my elementary school teacher taught me – wake up, pray, brush my teeth and eat breakfast – has changed a bit to wake up, pray, then go online (starting with coinmarketcap) to find out what crypto assets are red.
2018 has had a rough start for altcoins and related assets. Their performance has been paralyzed by frequent bankers’ opinions that the crypto bubble is about to burst. However, cryptocurrency die-hards are still HODLing, and to be fair, they are reaping the big bucks.
Bitcoin has recently rebounded to nearly $5,000; Bitcoin Cash approached $500, while Ethereum found peace at $300. Virtually every coin was struck except for the newbies who were still in a state of excitement. As of this writing, Bitcoin is back on track and trading at $8,900. Since the start of the uptrend, many other cryptos have doubled, and the market capitalization is at $400 billion from a recent peak of $250 billion.
If you are gradually getting used to cryptocurrencies and want to become a successful trader, the tips below will help you in this.
Practical tips for trading cryptocurrencies
• Start modestly
You’ve heard that cryptocurrency prices are skyrocketing. You also probably got the news that this upward trend may not last long. Some skeptics, mostly respected bankers and economists, usually call them get-rich-quick schemes with no solid foundation.
News like this can make you invest in a rush and not apply moderation. A little analysis of market trends and currencies worth investing in can guarantee you good returns. Whatever you do, don’t put all your hard-earned money into these assets.
• Understand how stock markets work
I recently saw a friend of mine post a feed on Facebook about one of his friends who kept trading the stock market without having any idea how it worked. This is a dangerous step. Always review the site you intend to use before you sign up or at least before you start trading. If they offer a dummy account, take this opportunity to see what the dashboard looks like.
• Don’t insist on trading everything
There are over 1,400 cryptocurrencies to trade, but it is impossible to deal with all of them. Placing your portfolio on a huge amount of crypto than you can effectively manage will minimize your profits. Just pick a few of them, read more about them and how to get their trading signals.
• Stay sober
Cryptocurrencies are volatile. This is their bat and benefit. As a trader, you must understand that sharp price fluctuations are inevitable. Uncertainty about when to make a move makes one an ineffective trader. Use hard data and other research methods to be confident when making a trade.
Successful traders participate in various online forums where cryptocurrency trends and signals are discussed. Of course, your knowledge may be sufficient, but you need to rely on other traders for more relevant data.
• meaningfully diversify
Almost everyone will tell you to expand your portfolio, but no one will remind you to deal with currencies for real use. There are some bad coins you can deal with for some quick cash, but the best cryptos are the ones that solve existing problems. Real-world coins tend to be less volatile.
Don’t diversify too early or too late. And before you make the move to buy any crypto asset, make sure you know its market cap, price changes, and daily trading volumes. Maintaining a healthy portfolio is the way to get the most out of these digital assets.