If you’re new to crypto trading, or if your friends have been asking for advice on how to get started with crypto currencies, these five tips are a must-read.
1. Invest in Cryptocurrency Coins: There are many different cryptocurrencies that trade at various levels of value and function differently than others. To invest properly in cryptocurrency coins it’s important to understand what makes them work the best and which coin is most valuable currently.,
2. Start Trading Crypto Currencies Safely And Securely: Take care when making transactions; never send money directly from an exchange account as this may be risky because exchanges can lose access temporarily due to technical issues or security breaches.,
3. Be Patient With Crypto Currency Investments: It takes time before investments will pay off but they’ll grow stronger over time.,
4.. Stay Away From Pump & Dump Schemes (the Basics): These schemes encourage investors through promises of significant profits within short periods by encouraging growth via high-volume buying during downswings and selling immediately after peaks, only for their investment later fail spectacularly without any profit made.,
5.: Don’t Panic When All Seems Lost! If a person panics about losing funds then he/she runs the risk of not realizing potential benefits from hearing out bad news
The “most profitable crypto trading strategy” is a guide that will help you start your journey in the world of cryptocurrency. It has 5 tips on how to get started and be successful.
It doesn’t matter how skilled a trader you are; there is nothing that can shield you from the volatility of cryptocurrency prices. Bitcoin’s (BTC) volatility, which is a common measure of daily changes, is now at 64% annualized. In contrast, the S&P 500 has a volatility statistic of 17 percent, while WTI crude oil has a volatility spec of 54 percent.
However, by following five simple guidelines, you may prevent the psychological effects of an unexpected 25% intraday price movement. Fortunately, holding these strategies during times of extreme volatility does not need specialized technologies or big quantities of money.
Make a plan to not withdraw money for at least two years.
Let’s say you have $5,000 to invest, but you’ll almost certainly need at least $2,000 of it during the next 12 months for vacation, automobile repair, or some other purpose.
The worst thing you can do is make a 100 percent crypto allocation since you could need to sell your investment at the worst possible moment, such as at the bottom of a cycle. Even if the revenues are intended for use in decentralized finance (DeFi) pools, the danger of impairment losses or hacks that threaten access to the money exists.
In a nutshell, any assets dedicated to cryptocurrencies should have a vesting time of two years.
The dollar cost average is always used.
Fear of missing out (FOMO) may engulf even skilled traders, leading to a rush to create a position as rapidly as feasible. But how can you just sit back and watch when everyone is making 50 percent or more returns on a continuous basis, even meme coins?
The DCA approach is purchasing the same dollar amount every week or month, regardless of market fluctuations; for example, buying $200 every Monday afternoon for a year eliminates the stress and worry associated with deciding whether or not to increase a stake.
At all costs, avoid purchasing all of the positions in less than three or four weeks. Keep in mind that cryptocurrency use is still in its infancy.
When performing analysis, don’t utilize too many indicators.
The moving average, Fibonacci retracement levels, Bollinger Bands, the directional movement index, the Ichimoku Cloud, the parabolic SAR, the relative strength index, and other technical indicators are only a few examples. There are countless ways for monitoring these indicators when you realize that each one has different settings.
The finest traders are aware that accurately reading the market is more essential than selecting the best signal. Some people like to look at correlations with conventional markets, while others just look at cryptocurrency price charts. Except for attempting to follow five separate indications at the same time, there is no right or wrong here.
Markets are dynamic, and this is particularly true in crypto because of how quickly things change.
Recognize when to take a break.
You will eventually misread the market while looking for bottoms or cryptocurrency seasons. Every trader makes mistakes from time to time, and there’s no need to compensate by raising the bet amount quickly to make up for the losses. This is the polar opposite of what one should be doing.
When you have a “bad break,” take a break for a few days. The psychological toll of losses is significant, and it will impair your ability to think properly. Allow that one to pass even if a clear chance presents itself. Aside from trading, go for a stroll or attempt to manage your life.
The most successful merchants aren’t always the most talented, but rather the ones who have survived the longest.
Continue to put money into winners.
This may be the most difficult lesson to learn since investors have a natural desire to benefit from our successful positions. As previously said, crypto market volatility is highly high, thus aiming for a 30% return will not be enough to compensate for your prior (or future) losses.
Traders should purchase more wins instead of selling losers. Of course, market data and general mood should not be ignored, but if your expectations remain strong, try adding to your position until the entire market shows signs of weakness.
By being bold and hanging on to the most lucrative positions, one may finally make a 300 percent or 500 percent profit. Don’t be alarmed if you see these returns since you anticipated them when you entered such a hazardous market.
Every rule is intended to be disobeyed.
If there was a path to bitcoin trading success, many individuals would have discovered it after many years, and the profits would have faded rapidly. That is why, every now and again, you should be willing to violate your own rules.
Do not blindly trust investing advice from influential people or skilled money managers. Everyone’s risk appetite and ability to increase positions following a setback are different. But, more importantly, remember to look for yourself while you’re out there!
The author’s thoughts and opinions are purely his or her own and do not necessarily represent those of Cointelegraph. Every investing and trading decision has some level of risk. When making a choice, you should do your own research.
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The “how to trade cryptocurrency and make profit” is a guide that offers 5 tips on how to start trading cryptocurrencies in 2022.
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