Dan Parker, Negosentro | Bitcoin and other alternative cryptocurrencies are some of the most popular assets that are traded on several markets and exchanges today. Perhaps the three main reasons these cryptocurrencies are gaining huge support from investors, traders, and finance experts, are the various innovative technologies behind them, the high volatility of the price against fiat currencies, and the feasibility of these assets to be traded even with a small capital and absence of a broker.
Although cryptocurrencies are profitable to trade alongside less volatile assets such as foreign currencies, commodities, and stocks, trading them involves several risks which may cause huge losses to beginners. Fortunately, there are ways to mitigate these risks and maximize your profits in short-term trades. Read more about these four tips about cryptocurrency trading for beginners and see great results in no time.
- Find a trusted cryptocurrency exchange in your country.
The first step to get involved in cryptocurrency trading is to register in a local cryptocurrency exchange where you can buy, sell, and trade your coins for fiat currency or alternative coins (more commonly referred to as altcoins). Some of the most popular cryptocurrency exchanges which you can use include Coinbase, Bitfinex, Bitstamp, Kraken, and Gemini. A few things that you must consider before signing up in an exchange include the availability of different cryptocurrency assets, trading fees, withdraw and deposit limits, and your anonymity and security as a trader.
- Make your own research.
As a cryptocurrency trader, it is your responsibility to research about the particular exchange that you are using as well as the coins that you are trading. As much as possible, invest only in cryptocurrencies that are relatively stable and have the potential for the product and the technology behind it to reach mass adoption. Observing market trends and analyzing the charts can be of good help, but keep in mind that the movement of the prices is largely influenced by the news on cryptocurrencies. Make sure to research a lot and stay updated on the latest events.
- Avoid the common beginner mistakes.
Most of the common mistakes committed by beginners are caused by the expectations of getting quick huge gains instead of setting up a strategy to profit in a systematic way. Take caution when riding a pump wave and stay away from groups that promote coins for their own benefits. Don’t let your emotions get the best of you and affect your reasoning when making trade orders. Avoid buying coins at a high price in ‘fear of missing out’ (FOMO) and don’t sell them in the middle of a panic. To put it in simple words, buy low and sell high only.
- Manage your risks.
In terms of cryptocurrency trading, only one strategy has been proven to work consistently so far. And that is long-term holding. Although very risky, short-term trading can still be more profitable than long-term investing. One tip to minimize your risks is to diversify your portfolio and avoid ‘putting all the eggs in one basket’. Start with buying undervalued coins and be contented with small profits that will eventually accumulate into a bigger one. If you can afford it, refrain from putting profit targets and stop-sell orders too close from the price that you bought the coins.
You may also start using Crypto Code robot, a tried and tested automated trading program that can let you create buy and sell orders and maximize your profits from intraday trading. The program is specifically developed for cryptocurrencies under five long years of research, backtesting, and improvement to effectively adapt to the highly volatile market and deliver the best results for both beginner and experienced traders.