Cryptocurrency investment has been pretty famous over the last few years. You must have heard some stories where people invested a few dollars and earned thousands of dollars, and on the other hand, some have lost their lifelong savings in it. The crypto market is highly volatile. If you are looking to invest in the crypto market but safely, this guide is for you. The purpose of this guide is to educate investors and minimize the risk of loss by educating them.
A Basic Guide to Cryptocurrency TradingFirst of all, to start investing in cryptocurrency, you would require a legitimate and trustworthy platform or exchange where you can buy and sell crypto. The most important thing is to identify an exchange that delivers you your requirements.
Fund Your AccountAfter making an account with a trustworthy exchange is the first step when you enter the cryptocurrency market. Here as an investor, you need to deposit money in your account in order to buy different types of cryptocurrencies. You can deposit the funds in your account by credit/debit card or bank transfer.
However, it charges higher caps and fees on fund transfer.
Types of Cryptocurrency Exchange The cryptocurrency exchange works as a portal between the crypto world and fiat world. In the crypto ecosystem, it serves the most vital function. It is divided into two parts:- Crypto to Crypto These exchanges help you to exchange your cryptocurrency such as BTC, BCH, ETH with other cryptocurrencies.
- Fiat to Crypto In fiat to crypto exchange, you can buy crypto in exchange of your fiat money or paper money.
The next step in crypto investment is to select a fair wallet. It is vital to have a cryptocurrency wallet before you buy any cryptocurrency. These wallets will help you to keep your crypto safe from hackers and theft. While exchanging your crypto coins stays in these wallets, but we recommend you withdraw your cryptos from there and keep that in your private wallet.
Some Do's and Don'ts- The best thing about cryptocurrency is that you can even purchase fractions of the coin with minimum investment. So, you need to invest hundreds or thousands of dollars to get in the game.
- Do not try to buy a big chunk of any cryptocurrency, especially if there is a risk that the country may outlaw cryptocurrency trading.
- Always risk as much money as you can afford otherwise you will be left with nothing.
- Try to avoid investing in such ICOs which don't have any whitepaper because a whitepaper is a detailed guide and has everything that potential investors need to know. If the ICO doesn't have a whitepaper, it needs to be looked over.
- Always choose an exchange which is in the same jurisdiction as you; it will help you to recover your hard-earned money when something wrong happens. And if there is no exchange in your jurisdiction then choose an exchange which is based in a stable country with an excellent legal system.
- Never take a loan to invest.
- Do your own research, and don't be dependent on others' opinions and analysis.
- Don't be greedy, set realistic expectations and know when to accept the loss.
While above-mentioned points are necessary to keep in mind but a solid trading strategy is must and undoubtedly the most critical pre-investment step for everyone who is looking to invest in the crypto market.
- Cryptocurrency Selection A combination of large, medium and small-cap crypto is best and always recommended. Always select the right crypto combo by keeping the blend in mind, and don't put all the money on a single coin. Divide your money into small chunks and reduce the risk. The idea behind this strategy is to alleviate the risk of losing all money.
- Trader Duration It is vital to know for what duration you need to trade. For traders who have sufficient time, all short, medium and longer trading strategies will work.
- Know Your Risk strength Before starting investing in cryptocurrency, one should be aware of its risk-taking strength. If you are one of those who feel nervous while investing, and due to this nervousness, you directly jump on potential opportunities. So, let me clear you that the crypto world is not for you.
Once you have opened your trading accounts, set up your wallets, built your trading strategy, and selected the cryptos, now it's time to trade. Just be disciplined while trading and invest according to your risk-taking strength. It means to invest only that much money which you can afford to lose and don't be greedy. One more thing to remember is that not every trade will give you a return, so don't panic because of these ups and downs.
