Cryptocurrency is taking the world by storm. Unfortunately, most people don’t have a clue about trading let alone what Ethereum is, and how to get in on the action. Just like any other investment or tech startup, you need to do your research if you want to get involved in the world of trading Cryptocurrencies in the UK or anywhere else for that matter. Here are 10 tips that will help you get started on your journey and help you become successful along the way.
10 – Educate yourself before you get started
It is not a good idea to get into the cryptocurrency trading world without much knowledge of how it all works. So, before you get started, it’s important to educate yourself with regard to the industry. Google is your best friend for that purpose.
09 – Have a reason before entering a trade
If you aim at trading on a daily basis, it is sometimes better to avoid gaining without doing anything instead of entering a trade without any trading plan. Thereby exposing all your coins to potential losses.
08 – Beware of biased sources
There are countless online sources for information with regard to different types of cryptocurrencies and how to work with them. Unfortunately, many of these sources are biased. Some of them may be trying to sell you a specific type of cryptocurrency or some may be working to pump up the value of a type of cryptocurrency.
07 – Find the average price
Choose a cryptocurrency you want to start trading. Then divide its position in several equal lots, and enter in trade with this lot once in two weeks. Don’t forget, it is important that each lot has the same amount; otherwise you won’t be able to find the average price.
06 – Set a limit and stop when beginning a new trade
For each trade conducted, it is important to set a target for profit taking. The point is, it is necessary to set a stop-loss to cut any losses made during the trade. The stop-loss setting is substantial because it will set the level of loss where your trading will be closed.
05 – Don’t overextend yourself when trading
When trading cryptocurrencies, it may be easy to overextend yourself by putting more money into a trade than you really should. As a result, the value of these types of currency may fluctuate wildly, and the potential for loss is high.
04 – Hedge Your Bets
Diverse exchanges allow short orders. This allows one to place bets on either side of Bitcoin’s price changes. For example, a simple strategy would be to have 90% long and 10% short. This strategy assumes you are more confident in a long term. This strategy may cater any level of risk.
03 – Learn about altcoins
It is substantial not to neglect the power of Altcoins. Altcoins are less prone to public speculation. Their smaller market caps are more prone to larger swings in pricing. Each altcoin has a purpose and an intent, catering to different niches. There are bigger risks associated with investing in altcoins, but also bigger rewards.
02 – Follow cryptocurrency trading charts
When trading cryptocurrency, one of the best ways to go is to take advantage of technical trading. It is important that you understand not only how to read charts, but how to interpret them and use them to your advantage when trading.
01 – Use A Trading Plan
Like anything else in life, planning is key to trading cryptocurrencies. A reliable trading plan will give you entry and exit ways, taking emotions out of the process. Your plan should also include money management tips to ensure that you are never exposed to too much loss.