The attractiveness of cryptocurrency trading continues to grow every day. And it is not surprising, because who would not want to receive instant profit on the races of cryptocurrency. There is an opinion that trading without losses at the beginning of the journey is inevitable, but this is not so - with the right approach and a minimal understanding of the market, success can be achieved even for beginners.
Theory
Before embarking on cryptocurrency assets trading, you should get a basic knowledge of the asset being traded. Look at the charts, the book of orders - this will help you understand the framework within which the coin is traded and determine its volatility.
Also pay attention to the news background of the coin selected for trading. Usually it is taken as the basis for determining the appropriate trading strategy.
A novice trader is better off choosing digital assets with medium volatility. In this case, the price movement is more or less predictable, and the chances of losing investment are minimal.
A large share of the investment portfolio should be popular cryptocurrencies. They are easier to analyze and predict due to the presence of large amounts of information. For example, hundreds of media resources write about Bitcoin every day, while AION is much harder to find information, most likely it will be news only from project developers.
Understanding the features of cryptocurrency will help the trader to understand the trade on the crypto market as a whole. And this is a direct path to success!
Choosing a strategy
After the trader has decided on cryptocurrency, you should devote time to choosing a strategy.
Although it is possible and vice versa: first a strategy, and after - a cryptocurrency. But it would be more correct to adhere to the first approach. Since today the number of existing cryptocurrency reaches more than 1800, and the number of basic strategies can be counted on the fingers.
The choice of strategy depends on:
- Market conditions. With the growth of the market, some strategies are used, with the fall - others, and with uncertainty - the third.
- The level of volatility of the coin. Usually low volatility coins are bought for long term, while high volatility coins are used for trading short and medium terms.
- Time of employment. If it is convenient for a trader to spend on trading only a few hours a day, he should turn to strategies that make money in short periods of time. If the trader is unable to constantly monitor the trade, then perhaps position trading or swing trading will be the most appropriate option.
- The size of the investment. If a trader manages insignificant amounts, then it is better not to risk not to lose everything, but to use more conservative strategies.
- Goals The choice of strategy depends on the goals and the expected result. If a novice came to the market to get quick profit, he should choose less risky strategies in order not to incur losses. In the case when funds are used to study the market, you can use more risky methods.
- Efficiency. With the ability to assess the state of the market and quickly draw conclusions, you can use trading in a short time frame. If the trader needs time for a detailed assessment of the situation, then it is obvious that he should look for another strategy.
Choosing a cryptocurrency exchange
Different trading platforms charge different fees. While on some users pay a commission on each transaction, others may offer more favorable terms of trade. Therefore, before making a deposit on a cryptocurrency exchange account, familiarize yourself with its policies and service charges.
Many exchanges oblige to go through the verification procedure, if you ignore which withdrawal of funds from the trading platform will be impossible. Such conditions are mainly put forward by exchanges supporting fiat currencies. Therefore, immediately decide on the pairs you intend to trade and if you prefer to remain anonymous, then the best solution will be platforms offering steablcoins (digital analogue of Fiat) to trade.
If verification of personal data is not a problem, then we advise you to choose from a list of the largest exchanges that require an identification procedure but are highly reliable.
In any case, before making a deposit, read the reviews on the cryptocurrency exchange - this is the easiest option to immediately identify the pitfalls that can be encountered in the course of trading on a particular exchange. If everything suits you, go ahead.
The mistakes of new traders
But even well-trained novice traders, for various reasons, manage to make serious mistakes:
- Loss of vigilance. In the cryptocurrency market, the prices of some coins change so quickly that even an experienced investor cannot always control the situation. It is panic, fear or greed that leads to great losses. A common mistake among novice traders is to buy cryptocurrencies at the peak of their value, since with the rapid price growth it seems that there is an opportunity to miss profits. But more often, sharp price movements are accompanied by a deep correction, therefore, instead of profit, the buyer will receive losses.
- The desire to return the loss. Every experienced trader is very difficult to lose, and for beginners, as a rule, even harder. Therefore, when receiving losses, they want to return their funds as quickly as possible. But usually due to careless actions they suffer even greater losses.
- Use a single strategy. Having mastered one of the strategies, beginners prefer to use it only, at least until it brings systematic losses. In this case, the losses will not take long to wait. Therefore, in different market situations, different types of strategies will be more beneficial (after all, it was not for nothing that they were invented). Therefore, you should not dwell on one thing, continue to learn all the basics of trading.
- Not serious attitude. At first glance, it seems that cryptocurrency trading is fun, and there is no need to understand its intricacies. But as a result, due to a lack of understanding of the theoretical aspects of the cryptocurrency market, investments are lost. Trading on the stock exchange should pay maximum attention. Remember, you are just starting your way as a trader!
Hack and predictor Aviator
Each novice trader chooses his own tactics and strategy, and therefore the mistakes are different for everyone. Therefore, we recommend that you learn from the mistakes of others, and not from your own. After all, your future in this area depends on your attitude to cryptocurrency trading. If you want to become a successful trader, then be smart about each of your actions, but if cryptocurrency trading is just entertainment, then losses will not be long in coming.