Getting your head around trading cryptocurrencies is no easy feat, from learning how to read charts to deciphering the worthy projects from the scams, it’s no walk in the park. To assist you in your trading endeavours we’ve put together 7 important notes for anyone trading crypto packed full with cryptocurrency trading tips.
#7 Choose Your Altcoins Wisely
With the top 10 cryptocurrencies by market cap changing on a yearly basis, ensure that the altcoins you invest in are well vetted. Particularly if you are holding for the medium to long term, as altcoins are known to fluctuate in value, with some not rising back up. Look out for altcoins with a strong community backing and higher daily trading volumes as these are more likely to make the long haul.
#6 Altcoins Are (Mostly) Traded Against Bitcoin
When looking at trading pairs, typically altcoins will be traded against Bitcoin rather than fiat currencies. As Bitcoin is still subject to waves of volatility, during these times it’s important to take note and manage targets accordingly. This can be done by having close targets and stop-losses in order, or to avoid trade entirely.
Bitcoins and altcoins used to display trading patterns where if BTC rose then altcoins would drop, however since 2018 this has become clouded and is no longer relevant.
#5 Have A Clear Strategy Behind Every Trade
Always go into a trade knowing why you’re doing it with clear reasoning. As the markets flow through stable and low periods, ensure that you understand the implications and act accordingly. Sometimes no action is better than a reaction when avoiding significant losses. A great cryptocurrency trading tip is knowing your short term and long term goals will help in implementing this.
#4 Don’t Fall Victim To FOMO
There will be times where every forum and trading group is pushing an unlikely rise in an altcoin’s price and pushing others to follow suit, but hold onto your guns and don’t fall prey. These pump and dumps happen all the time, and only a select few are profiting from it (mostly whales if we’re honest). Rest assured that just as quickly as that green candle lit up, the red will be following suit in no time. Never chase the FOMO.
#3 Each Position Needs A Target And Stop-Loss
Due to the nature of the cryptocurrency market, it is imperative as a crypto trader to go in with a clear plan: a target at which to pull profits, and a stop-loss in order to minimize potential losses. While the stock markets are considered “extremely volatile” when the markets dip 2-3%, crypto markets have known to spiral into downtrends much more extreme.
#2 DYOR When Investing In ICOs and IEOs
ICOs (Initial coin offerings) and IEOs (Initial Exchange Offerings) are token sales that new projects use to create capital, and offer investors an early piece of the pie. In 2017 there was an exorbitant boom in ICOs, with many turning out to be scams where projects ran off with investor’s money. This gave ICOs a bad name, so over the years it has evolved into now being called IEOs. While these can yield excellent returns (10x returns are not unheard of), there is also a high risk involved. Ensure that you do meticulous research before investing in an IEO, and never invest more that you’re willing to lose.
#1 Keep Reading, Keep Learning, Keep Consuming
Make sure that you stay on top of what’s happening by consuming crypto centred content from reputable sources. Learn about new trading techniques, different chart patterns, and implement them in low risk markets. Read about a new project and devour everything it has to offer. Make informed decisions by staying informed. Trading provides an invaluable opportunity to both make profits and to keep that brain young by learning everything there is to know about successes in trading.
7 Important Notes For Anyone Trading Crypto
With over 8,400 cryptocurrencies the crypto markets present a vast opportunity to become the trader of your dreams. Chase the profits but be humbled by risk management, don’t get hung up on the losses, and never put all your eggs in one basket. Live by these cryptocurrency trading tips and you’re likely to see many successes in your crypto trading ventures. Best of all - tap into 60 crypto markets by simply buying crypto through Oobit with your credit or debit card. Straightforward and convenient so that you can spend more time analyzing charts.