Trading Cryptocurrency Tips for Beginners
- Written by News Company
The idea of digital money is trending, especially among millennials, given that 4.68% of them had already invested in cryptocurrencies of some kind, as softwarefindr.com report points out. Despite this massive inflow of new people, the cryptocurrency market proves to be a real challenge, especially for those with little or no experience in the field of trading. Some cryptocurrency trading tips are required for those who to start with the right foot, so let’s jump into this subject.
#1 Trading cryptocurrencies is like a business
Although most of the people are being drawn into the cryptocurrency market seduced by off-the-charts returns, they fail to understand that the huge amount of volatility comes with great challenges. Just like stocks, ETFs, or commodities trading, you should treat cryptocurrency trading as a business. That means you have to study, fail, test, learn, and develop your own trading methods.#2 Focus on large-cap tokens
Even though you might have some experience in dealing with other markets, you won’t be able to post the same results in dealing with cryptocurrencies. Each market has its own personality and behavior, being influenced by completely different factors. Still, starting by trading large-cap tokes like Bitcoin, Ether, Litecoin, etc., you’ll be involved in liquid markets and avoid some of the downsides of dealing with small-cap tokens.
#3 Be aware of the price manipulation techniques
Thirdly, the cryptocurrency market is still in its early stages, and the lack of regulation makes it vulnerable to price manipulation techniques. In order to not fall into traps, you must be aware of these methods. Short squeeze, spoofing, wash trading, and pump-and-dump, are the most popular price manipulation occurrences. If you do not want to get caught by surprise, make sure you’ve already understood each of them.
#4 Different ways to trade cryptocurrencies
What we can easily notice in the past year is the tendency of some companies to launch alternatives for the traditional cryptocurrency exchanges that had thus far proved to be unreliable. Now that you can trade the price of BTC on easyMarkets, or trade futures contracts on the CME, there’s no reason why you should deal with unregulated and unsecured exchanges. Solely in 2018, there had been $856 million stolen from exchanges, according to research from Ledger, a figure more than double to what we saw in 2017. Although exchanges are beginning to realize actions should be taken, trading crypto in safer places would be more suitable.
