Making Your First Cryptocurrency Move
The cryptocurrency marketplace is burgeoning with trade and investment prospects.
However, on this exciting new frontier, it can be difficult for would-be cryptocurrency traders and investors to discern tried and true trading and investment principles.
Here, we invite you to take a step back and consider this simple guide for a disciplined approach to cryptocurrency trading and investment.
1. Research your options
Not all coins are created equal, and the crypto history annals are littered with instances of failed coins and fraudulent schemes.
Those hopeful of a positive experience in the cryptocurrency marketplace must thoroughly research their trading and investment options.
- Does the cryptocurrency have a real world application and purpose?
- What are the coin’s development and price histories?
- What do industry experts have to say about the coin?
Hype and excitement do not guarantee financial reward in the cryptocurrency marketplace. A smart cryptocurrency investment is a researched one.
2. Get to know the market
It pays to take the time to get acquainted with cryptocurrency markets and their trends.
Due to their infancy, cryptocurrency markets are volatile and coin prices can fluctuate. Rather than being swayed by the latest market moves, take your shortlist of potential investment and trade options and look at their price trends over time.
- Ups and downs aside, does a coin’s value trend upwards over time?
- Are market price moves tied to real world events?
- Is now a good time to invest or trade, or is the market predicted to turn?
3. Develop a plan
It’s easy to get caught up in emotion when trading and investing. After all, the prospect of a good return is undeniably exciting. However, trading and investment sages all agree that strategy and discipline yield the best results long-term.
When developing your plan, consider:
- What can I realistically afford to invest? Don’t invest to the point that you can’t meet your everyday expenses, and don’t invest more than you could afford to lose.
- Do I intend to trade or to invest? Generally speaking, trading involves buying and selling cryptocurrencies in the hope of making short-term gains. Investing, on the other hand, is a longer-term financial strategy.
- Start small. If you’re new to the cryptocurrency marketplace, consider investing or trading a small amount and limiting the number of your investments as you find your feet.
- Don’t let ‘FOMO’ (Fear Of Missing Out) guide your decisions. Follow the time-tested adage: ‘buy low; sell high’.
- If you’re trading cryptocurrencies in the hope of short-term gains, set price limits and stick to them. Crypto markets fluctuate and what looks like a handsome profit one day may look less so the next. Don’t be greedy; stick to your strategy.
4. Implement and evaluate your plan
Having done your research and developed your strategy, it’s time to make your move. Set your plan in action and step out in the marketplace with confidence knowing that you’re well prepared.
That said, trading and investing is an exercise in continual improvement. Don’t be afraid to tweak or re-evaluate your plan as your circumstances and/or markets change.
And finally, remember that exchanges are best used for just that: to perform exchanges. Medium-long term storage of your cryptocurrency investments is ideally the domain of your private wallet(s). In a decentralised marketplace, users are responsible for the safekeeping of their coins.
Get set, go!
Cryptocurrency markets hold exciting prospects for discerning traders and investors. Do your due diligence, develop a trading and/or investment plan and stick to it.
Combined with an appetite to learn more about cryptocurrencies and their markets, these simple principles will set you out into the cryptocurrency marketplace to invest and trade with confidence.