Investing in cryptocurrencies is a risky business and there’s no doubt about that. Just take for example how the crypto market unexpectedly crashed when 2018 started. Nonetheless, today we are going to present the three essential crypto trading guidelines that are going to help every new investor get a better understanding of what they should and shouldn’t do. With that being said, let’s get into it!
Even though new investors might not want to invest in Bitcoin because the buy-in is quite expensive, this doesn’t mean that Bitcoin should be discarded. Closely following Bitcoin is the best thing that new investors can do because its price usually dictates how the market goes.
For example, if Bitcoin price is pumping then altcoins price is highly likely to go down because investors are going to sell their altcoins and start purchasing Bitcoin instead. In addition, history shows that whenever Bitcoin goes up, the entire crypto market starts moving.
Don’t Invest All Your Money
The most important tip that we can give new investors is to never invest more than they can afford to lose. As previously mentioned, the crypto market crashed in January 2018 and this caused many investors to go bankrupt, especially since the prices were higher than usual at the end of 2017. Also, investing a smaller sum makes it easier to not get FUD (Fear, uncertainty and doubt) whenever an altcoin dips.
The Long Run
While there might be tens of stories about people who invested a couple hundred dollars at the right time and became millionaires overnight, this is highly unlikely to happen nowadays. Prices go up and down every day because the crypto market is highly volatile and predicting when that happens is nearly impossible. Therefore, we advised new investors to look at the long run and only invest in cryptocurrencies that they believe in.
Nicole Hicks a graduate of UFT. She’s based in Toronto but travels much of the year. Nicole has written for NPR, Motherboard, MSN Money, and the Huffington Post. Nicole is a financial reporter, focusing on technology, national security, and policing.