Cryptocurrency trading gives hundreds of thousands of opportunities to grow and reach new heights for new players in the market. However, more than 90% of beginners lose their assets because of the unforeseen risks they weren’t ready for. It happens mainly due to the blind trust in influencers’ ads, promises of quick profits, aggressive ads and simple human interest in everything new without thinking deeply and thoroughly. People want to achieve great results in a short time, but trading, especially on the cryptocurrency market, doesn’t work that way.
Wisebitcoin has prepared a list of tips and tricks for our traders to avoid losses and risks while trading on the cryptocurrency market.
It is a general recommendation from our editorial for you to start cryptocurrency trading smartly; however, we want to warn you that trading is a risky activity. It is only your choice whether to take part in it or not.
Traders use fluctuations in cryptocurrency quotes to make a profit. Crypto trading is becoming less and less different from trading other assets, so let's get down to business! Here are the 5 steps that will help you to begin trading on the cryptocurrency market smartly:
This is the first thing to think about. You need to decide what style of trading suits you best. You may probably imagine traders from Hollywood movies who earn hundreds of thousands of dollars in just one day. This is a prime example of day trading that, frankly, comes with a high level of stress. You can quickly lose money if you do not take responsibility for your actions and simply don’t know what to do in a particular market reversal.
But, back to the first step. Here are three types of trading:
Short-term (day traders that work within the day);
Medium-term (swing traders that take a position for more than a couple of days and close it after one or two weeks, sometimes longer if the trend requires it);
Long-term (investors that buy on drawdowns and hold the position for a long time).
All of these traders get profit from cryptocurrency trading; however, they do that using completely different strategies. Moreover, they can mix some of the strategies while still trying to stick to their initial direction so as not to make simple mistakes.
It is unnecessary to trade every day because calm and measured trading will bring more results and help avoid the mistakes beginners usually make. An overabundance of strategies and the number of transactions can lead to loss of funds, unexpected risks, and eventually to depression and stress that you do not need at all. Also, beginners first should consider trading as a hobby, calculate their chances of success, do market research, and only then move on to more frequent and larger transactions.
New cryptocurrency market players can spend all the funds for a potential profit, even for one transaction! This is, of course, fundamentally wrong.
The negative experience leaves a sharp residue from trading activity, which leads to perceiving the market in general as a scam. That is why we recommend using the "trader's golden rule": do not exceed the volume of one transaction by more than 3% of the amount in your personal trading account.
Many exchanges and trading platforms offer their users to try trading on a demo account – a special tool for practicing your market activity. With the help of a demo-trading, you can upgrade your skills and try several strategies if you are still not completely sure about the type of strategies you plan to follow. One thing to know – during demo-trading, you will not fully experience the psychological aspect of the real market activity - this a note for you to keep in mind.
In the opinion of many experienced players, it is okay to start crypto trading from small amounts of $50-100.
Technical analysis is a great source of information for your trading. However, you should remember that it is not a crystal clear ball. Your fear, doubt and greed are powerful emotions, so even the most reliable strategy or plan can fail. It means it is necessary to manage risks and stop losses.
Psychology means a lot when speaking about trading because controlling your emotions can save your amount of money on your personal account and keep your mind calm. Or opposite.
Often, beginners don’t understand that emotions can lead to constantly making mistakes and losing money. The experts unanimously say that giving in to emotions is a mistake that can cost you a fortune. That is why you should stick to trading with a sober and cold mind without the desire to take everything you can at once. Follow your strategy, stick to your plan, deal with the stress and fear of loss, and don’t try to "win back" what was lost. Try to use a demo account, trading robots, or personal manager help whether you want to be careful.
To sum up, you should always work with your condition. Your profit depends on your state as much as on your skills.
There are a few common rules for traders to follow to keep trading wisely; let us look through a couple of them!
It is a two-factor authentication that keeps your assets safe. However, turn this on with the support of a special application or device, not SMS. For example, you can use Google Authenticator. It will be the best way to protect your account from hackers and scammers.
Save your frequently used exchanges in bookmarks
Try to keep them in one place. Googling them whenever needed could lead to phishing or scam websites that will own your accounts and steal money. Putting these websites in bookmarks also will help you to avoid fake ads.
If you miss an opportunity, don’t panic, because another one will surely follow. Relax, take it easy and do another research to understand what’s next. If the price of your cryptocurrency becomes lower, re-watch your analysis. If the project is promising, just wait. It will rise sooner or later because it is a rule of investing.
And here we come to the most important step. This is the key recommendation you should take away from today’s blog. It is a responsibility to find a trading platform, company, exchange, or broker that will fit your needs and give you protection and safety from frauds and scammers.
It would be great to find a trading platform that combines reliability, security, quality, suitable conditions and great opportunities for scale or development. With a good company, you will leave aside the issues related to technical and organizational work. It will help you focus on trading, upgrade your skills, improve your knowledge and not worry about the safety of your assets.
What are the most important factors when choosing a company to trade with?
Experience in trading;
Availability of trading materials;
The cost of fees and payments;
The number of instruments for trading.
To begin trading on the cryptocurrency market, you need to look again through the above 5 steps. These are the recommendations that will surely be useful if you are afraid of the unknown world of cryptocurrency. We hope these 5 steps will help you avoid troubles and losses and not be disappointed in the trading.
By the way, our exchange platform Wisebitcoin offers its clients all of the features in the fifth step. We give our traders the best conditions to enjoy trading and keep their assets safe. Wisebitcoin provides deep liquidity, cloud services with over 200 other cryptocurrency exchanges anchored worldwide. We create a community where you develop and upgrade your experience, trading and knowledge. In addition, we give our best to the users because our main goal is to develop their trading to obtain global trust for market players worldwide.
To learn about our company and to read more helpful articles about cryptocurrency trading, follow the links in this article. It would be great to see you in our community!