Taking your baby steps with crypto trading can be scary. It’s a complex market with a lot of risks and uncertainty involved, so the smart move is to do lots of research before getting started.
We’ve put together an overview of what you can do to start trading crypto assets, so that it’s less of a mountain to climb.
The best-known crypto asset is of course Bitcoin, and it’s only been around since 2009. It’s based on tech known as the blockchain, which is essentially a way of recording data across a distributed, decentralised network of computers.
The ethos of crypto is that it takes control of currency away from central institutions, whether that’s governments, banks or regulators, and puts it in the hands of holders. There are hundreds of different assets in this class today, giving you lots of investment and trading options.
Some of the perks of buying and selling crypto should be obvious already; it’s secure, accessible to anyone worldwide, and provides the potential for significant returns due to the volatile nature of the market.
It’s also something to consider if you’re starting a business. Even if you choose not to trade crypto assets, you might consider accepting them as payment from customers in order to catalyse sales growth.
There are a few things you need to do to kick off your first foray into crypto trading, including:
Finding a respected and properly regulated app to invest in crypto is a must. There are so many different exchanges out there that support trading, but not all are as reliable as the marketing hype would suggest.
Further down the line you might want to experiment with altcoins, but those new to crypto trading should stick to well-known and less volatile assets, such as Bitcoin and Ethereum.
You can’t make a good assessment of an asset’s likely future value if you don’t take its history into account. Buying in when a currency is at an all time high is unlikely to net you good returns, for example, so you need to delve into the price history over the long term to get a sense of where it’s at today.
Most importantly, new traders have to realise that the crypto market is very volatile, as mentioned. There’s every chance that any money you put in will be wiped out by price movements, so only invest what you can afford to lose, as the old saying goes.
There are several strategies you can adopt to improve your chances when trading crypto, such as:
Making your first trades with small sums will help you get a feel for trading, and let you determine whether it’s wise to keep going or to duck out.
You have to start soaking up as much cryptocurrency media coverage as you can to ensure you are up to speed with current events that might impact asset prices.
Another good way to adapt your trading tactics is to delve into crypto communities on social media sites like Reddit, Twitter and Discord.
You have to integrate an exit strategy into your plan, and take profits when you can, rather than holding assets indefinitely.
Relying on the success of a single crypto asset, or only investing in crypto and ignoring other opportunities, is unwise.
If you’ve wondered what all the fuss is about regarding crypto trading, the only way to truly understand it is to try it for yourself, and as you can see it’s a straightforward process that does involve risk.