With skyrocketing prices and greater acceptability of Cryptocurrencies globally, today the digital currencies have become an entity that everyone wants to be a part of. Bitcoin, the first Pattern Trader app, introduced in 2009 received a lukewarm welcome onto the global platform and its performance continued to be insipid in its initial years. However, it continued to have its supporters who believed in the concept of the virtual asset as an alternative to fiat currency. Several other cryptocurrencies inspired by Bitcoin were introduced in the years ahead.
The turnabout in the fortune of Bitcoin and the kind of growth that the crypto coins have witnessed in the last few years has been unprecedented. This has led to a surge in the number of investors willing to invest their money in the crypto market. Besides established investors, there has been tremendous interest among first-time investors in crypto trading. However, the rush among beginners is more a result of the hype of cryptocurrency on social media and the success stories of crypto investors. Crypto trading may be speculative but it needs proper management especially considering the risk factors and adopting the right trading techniques.
Thus, a beginner must keep in mind certain important aspects of crypto trading that will ensure that their foray into the crypto arena is a gainful one.
Important Aspects Of Crypto Trading For First-Time Investors
Select The Right Platform
One of the important factors that has contributed to the immense popularity of cryptocurrency in recent times has been the easy access to a large variety of coins. Several online platforms such as crypto trading exchanges and trading apps have made the process of buying, trading, and storing coins extremely user-friendly. You may find innumerable such websites but you must select one that has credibility and is reliable. One such Bitcoin trading software is Immediate Profit. Similar websites have helped crypto traders, especially beginners to create the right strategy that guarantees success in an otherwise highly volatile market.
You must also take into consideration other important factors like the fee charged for each transaction, the number of coins it offers for trading purposes, and its liquidity.
Storage Of Your Assets
Once the trading process in Bitcoins start, you need to be the responsible one to take care of the safety factors of your assets. If you end up losing your virtual assets someday, then you would not have anybody else to blame, except for yourself if you do not take proper initiatives to safeguard them now.
One of the easiest ways to protect your digital currencies is to go for digital wallets. The hot wallets or web wallets might not turn out to be a suitable one because they are generally quite vulnerable to the online threats like hackers or cyber thefts, etc.
However, you can always settle for cold or hardware wallets which store the digital currencies offline. All you need to do is to register yourself in a trading platform and get your hands on your digital wallets at once. Though, these wallets do not store the virtual currencies directly as they remain attached to the blockchain nodes; but they instead keep the node keys safe for you to access them later.
Trading Strategy
Before starting trading, you must decide whether you want to invest for the long term or a short term. Many long-term investors opt for HODL (Hold on for dear life) which means to keep the coins through their lows and highs without investing, for an extended period of time. You may also opt for short-term investment and adopt a strategy that best suits your needs. Some strategies are day trading, range trading, scalping, HFTs, and dollar cost averaging.
You must adhere strictly to the adopted strategy and not allow emotions to overrule your decisions. Impulsive decisions to gain more profits may be a disastrous move.
Risk Management Plan
Crypto trading is fraught with risks. While you may have heard about how Bitcoin investment has turned people into millionaires overnight, what people tend to overlook is the numerous instances when the entire invested amount is lost in a single trading session. The market is highly volatile and speculative. So, you must be equipped with a plan to ensure that even after a bad day at the market, you may be down but definitely not out.
- Decide on an amount to invest that you can afford to lose
- Invest in several cryptocurrencies
- Beware of scams
- Do not be swayed by social media hype
- Stay wary of FOMO
Conclusion
Entering the crypto market equipped with proper knowledge and plan enables you to have a higher percentage of success rather than going ahead swayed by the hype and media frenzy just to earn the big buck.
