For some time now, I have been closely monitoring the performance of cryptocurrencies in order to gain a sense of where the market is going. The routine my primary school teacher taught me – where you wake up, pray, brush your teeth and have breakfast, moved a little on waking up, praying and then on the web (starting with coinmarketcap) just to find out what crypto assets are in red.
The start of 2018 was not nice for altcoins and related funds. Their performance was crippled by the frequent opinions of bankers that the crypto bubble would burst. Nonetheless, fiery followers of cryptocurrencies are still “guarded” and truth for the will, reaping the big ones.
Recently, Bitcoin returned to nearly $ 5,000; Bitcoin Cash came close to $ 500, while Ethereum found peace at $ 300. Almost every coin was hit, except for the newcomers who were still in the excitement phase. At the time of writing, Bitcoin is back on track and is selling for $ 8,900. Many other cryptocurrencies have doubled since the uptrend began, with a market capitalization of $ 400 billion compared to the recent $ 250 billion.
If you are slowly warming up to cryptocurrencies and want to become a successful trader, the tips below will help you.
Practical tips on how to trade cryptocurrencies
• Start modestly
You have already heard that cryptocurrency prices are skyrocketing. You’ve probably also received the news that this uptrend may not last long. Some proponents, mostly esteemed bankers and economists, usually call them plans to get rich quick without a solid foundation.
Such news can make you invest in a hurry and fail to apply moderation. A small analysis of market trends and currencies of valuable reasons to invest can guarantee you a good return. Whatever you do, do not invest all your hard earned money in this property.
• Understand how stock exchanges work
I recently saw a friend of mine post a Facebook post about one of his friends who continued to trade the stock market, and he had no idea how it worked. This is a dangerous move. Always review the page you intend to use before registering or at least before you start trading. If they give you a fake gaming bill, take this opportunity to learn 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. Expanding your portfolio to more cryptocurrencies 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 unstable. This is their ruin and grace. As a trader, you need to understand that wild price fluctuations are inevitable. Uncertainty about when to make a move makes someone an inefficient trader. Use solid data and other research methods to be sure when to trade.
Successful traders belong to various online forums where cryptocurrencies are discussed in connection with market trends and signals. Of course, your knowledge may be enough, but you need to rely on other traders for more relevant data.
• Diversify meaningfully
Almost everyone will tell you to expand your portfolio, but no one will remind you to deal with currencies used in the real world. There are a few bad coins you can deal with for quick money, but the best cryptos you can deal with are the ones that solve existing problems. Coins used in the real world are usually less volatile.
Don’t diversify too soon or too late. And before you decide to buy any crypto asset, make sure you know its market capitalization, price changes and daily trading volumes. Maintaining a healthy portfolio is a way to get great benefits from this digital asset.