A beginners guide to trading crypto safely.
Because Cryptocurrencies are volatile assets, many investors prefer to trade them. Trading Crypto can provide substantially larger returns than traditional investments if you can time the market correctly.
As a beginner, things can easily get very tricky; this is why we’ve put together this guide.
We’re aware of the knowledge gap in Crypto and have made it our responsibility to educate our users about it. We put together a beginners course that can help you understand Crypto trading as a newbie. You can get access to that here. We also started a monthly session on Twitter where we have enlightening discussions about Crypto.
If you’d like to learn important tips that will definitely help you trade safer and better, here are some helpful ones:
6 tips to help you trade Crypto safely
Secure your wallet: Since crypto allows you to ‘be your own bank’, it’s important to keep your account safe. Here are two ways you can ensure that your account is safe:
Never share your password: Make sure all your transactions are carried out by you. Sharing your password means you’re giving third party access to move your assets. It goes without saying that doing this is risky.
2FA: Two-factor authenticator is an extra layer of security that helps keep your account safe. On Buycoins, 2FA is required when carrying out certain transactions. Setting up your 2FA helps you further protect your account.
Do your research: You must dedicate a significant amount of time to research before investing. It’s not enough to just do your research before you start investing; it’s important to also keep up with the news that affects the market. Even the smallest political or social unrest can devastate the value of any asset. As a result, being up to date on industry news can help you prepare for any potential upward or downward trends. You will know what to expect when you come to trade by learning how your chosen market operates, how it has performed in the past and keeping up with projections for the future.
Various risks are associated with investments, but you can ensure a more successful and seamless experience by regularly conducting thorough research.
Don’t trade with money you can’t do without. As a rule, always be sceptical. Even after doing your research, nothing is absolutely guaranteed. Don't be so confident in an asset that you’re willing to invest your entire savings, rent, school fees or any money you need for the day-to-day running of your life.
One of the most important things you need when trading is the ability to make very objective decisions. You lose that ability to make a very objective decision when you’re overly emotionally connected to the money you’re investing.
Have a trading plan: Allowing your emotions to dictate your trading activities is a sure way to lose money. To avoid/minimize this, it’s important to have a trading plan that you ensure you stick to.
A trading plan lays out how a trader will find and execute trades, including the conditions under which they will make buying/selling decisions, the size of the position they will take, how they will manage them, what securities can be traded, and other rules for when to trade and when not to trade. A trading plan is basically your rule book for trading.
Some of the things that should be in your trading plan are:
Your motivation for trading
Your trading goals
Your risk appetite
Personal risk management rules
The markets you want to trade
How much you want to spend trading per week/month
Avoid FOMO: FOMO is the acronym for ‘Fear of missing out’. It's the fear of losing out on a potential profit if you don't buy a cryptocurrency as soon as possible, regardless of its current price. The fear of missing out can cause you to abandon your better judgement of sticking to your trading plan.
Source: DailyFX
Once you start to feel like you’ll miss out if you don’t immediately take a trade that goes against your trading plan, sit back and do some more research before making a final decision. You’re better off missing the trade than getting stuck in this cycle.
Always learn from your mistakes: Sometimes, your trade may not go as planned. When this happens, always assess the problem and try to determine why it happened. Take advantage of that experience for your next trade, which could be better because you know more now than you did before.
If you enjoyed reading this and have some other tips that work for you, please share them with us.