For some time now, I have been closely monitoring the performance of cryptocurrencies to get a sense of where the market is going. The routine that my primary school teacher taught me – where you wake up, pray, brush your teeth and have breakfast, has shifted a bit to waking up, praying and then logging in (starting with coinmarketcap), just to know which crypto assets are in the red one.
The start of 2018 was not great for altcoin and related assets. Their performance was crippled by the common opinion of bankers that the crypto bubble is about to burst. Nevertheless, ardent followers of the cryptocurrency are still “walking” and, frankly, they are reaping a lot.
Bitcoin recently returned to almost $ 5,000; Bitcoin Cash approached $ 500, while Ethereum found peace of mind at $ 300. Virtually every coin was struck except for the newcomers, who were still in a state of excitement. At the time of writing, bitcoin is back on track and selling for $ 8,900. Many other cryptocurrencies have doubled since the beginning of the uptrend and the market capitalization is $ 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 the prices of cryptocurrencies are skyrocketing. You’ve probably also received the news that this upward trend may not last long. Some skeptics, mostly respected bankers and economists, usually call them get-rich-quick schemes without a solid foundation.
Such news can make you invest quickly and not use moderation. A small analysis of market trends and suitable currencies in which to invest can guarantee you a good return. Whatever you do, do not invest all your hard earned money in these assets.
• Understand how exchanges work
I recently saw a friend of mine post a Facebook show about one of his friends who continued to trade on the stock exchange, he had no idea how it worked. This is a dangerous move. Always review the site you intend to use before you register or at least before you start trading. If they provide a fictitious account to play with, use this opportunity to learn what the board looks like.
• Don’t insist on trading everything
There are over 1,400 cryptocurrencies to trade, but it is impossible to handle all of them. Spreading your portfolio to a huge number of 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 alerts.
• Stay sober
Cryptocurrencies are unstable. This is their curse and grace. As a trader, you need to understand that wild price fluctuations are inevitable. Uncertainty about when to make a move makes a person an inefficient trader. Use hard data and other research methods to be sure when to complete a transaction.
Successful traders belong to various online forums where discussions of cryptocurrencies about market trends and signals are discussed. Of course, your knowledge may be enough, but you should rely on other traders for more relevant data.
• Diversify meaningfully
Virtually everyone will tell you to expand your portfolio, but no one will remind you to work with currencies with real use. There are some bad coins you can handle for quick money, but the best cryptocurrencies to deal with are the ones that solve existing problems. Coins with real use are usually less unstable.
Don’t diversify too early or too late. And before you make a move to buy any crypto-asset, make sure you know its market capitalization, price changes and daily trading volumes. Maintaining a strong portfolio is the way to reap much of these digital assets.