Ever heard of cryptocurrency? You must have heard about it in the news, as it is currently created a lot of buzz in financial markets. Cryptocurrencies have gained a lot of popularity in recent years. People are taking a special interest as they are finding it profitable and exciting. It is getting more and more mainstream attention making it more exciting for new traders. People are still new with it, as the technology is quite new. If you’re one of those enthusiasts interested in investing in these cryptocurrencies, then have a plan and strategy.

Here are a few tips that can help you in cryptocurrency trading.

Don’t put all your eggs in one basket

The best advice any trader can get is don’t invest all your money on one single cryptocurrency. You can’t predict the market conditions, it is highly volatile and cryptocurrencies are highly unpredictable. Investments that offered positive returns are coming down due to economic conditions. Anything can happen, you can win thousands in a day or lose them.  But, if you invest your money on different cryptocurrencies you can mitigate the risk. The value of all other crypto coins is affected by the Bitcoin.

If Bitcoin loses its value against USD, there are high chances of other coins get affected. You must be wondering what is the point of investing in multiple crypto? Keeping Bitcoin as your base asset has its pro and cons. It must diversify from the same type of assets as there are many investments available in the market such as real estate, stocks, mutual funds etc. Balance your portfolio with different viable investments to balance the risk. At topiacoin.io which blog about cryptocurrencies in general you can know more.

Calculate your risk

Trading always comes with risk, even if you’re well-versed with it. Before making a trade, calculate your risk. It is important to know the odds of winning and losing, to see whether you want to make the trade or not. Wise traders never run in behind big bucks, they would rather invest in small regular trades that would bring small but sure profits. Remember this simple logic, high trades require a high tolerance. If you’re not ready for the risk, then invest consistently but on small trades. What is the point of trading, without understanding the economic conditions. You must calculate your risks before investing as these markets are highly unpredictable.

Bitcoin CFD

There are different options available in the cryptocurrencies, you don’t only have to invest in cryptocurrencies such as Bitcoin, Altcoins, Etherum etc. You can also invest in Bitcoin CFD, it is a bet you’re placing on bitcoin’s price. You can bet that either bitcoin price will increase or decrease. CFD means the contract for differences. These contracts are regulated in some countries if the broker defaults, you will get the compensation too. CFDs are risky, cryptocurrency trading itself is risky, so you but if you’re up for the risk you can invest in them. First things first, you need a CFD broker, who provides cryptos to start trading. Many brokers are listed on an exchange. You can open an account, go through digital ID verification and add money to your account.

Profit targets & stop loss

Traders get too much involved in trading that they don’t know when and where to stop. If you don’t understand your investments better, it is like quicksand that would pull deeper and deeper. So before making a trade understand your market and how your desired coin is performing today in the market. Set the stop-loss level that can help you in cutting down your losses. Traders easily get carried away by their emotions and setting stop loss will help you in restricting yourself. It is the maximum amount that you would like to lose on a particular trade. The most ideal point to set your stop loss is at the cost of the coin you invested in.

Don’t buy because the price is low

If you’re buying a coin because its price is low, then stop right now. This is the most common mistake that new traders commit. They buy a coin because it is affordable. When you decide to invest in a coin, your concern should be how well it will perform in the market, not its affordability. Next time you decide to invest a coin consider its market cap to make the decision, because the higher it’s the market cap, the better it is to invest. Purchasing a coin because its price is low, may not bring you the desired results.

Crypto news

To make the right trading decisions you must know and understand the market and cryptocurrencies better. If you’re willing to learn, the world is open for you. Internet and social media platforms have made it easy to learn, many self-taught traders are making good profits. This is not a one-time study, you must constantly learn and update yourself. The best way to do that is to follow crypto news and leaders who can advise you. It is important to know about all the happenings in the crypto world as it may have a huge impact on cryptocurrencies. So follow the latest news and important people on social media platforms for more insights on the market.

Conclusion

There are so many things to be considered before trading. You must analyse the market and coins to yield profits. Beware of FOMO (Fear of Missing Out), don’t invest in a coin because the price is low or someone else is making huge profits. What works for them may not work for you. So, research about the coin, do your homework, be prepared before entering a trade or making a decision. Internet is the best teacher in modern times, spend more time in learning all the topics that would make your trading success.