Cryptocurrencies are growing and getting more recognition lately. 2020 has been an exciting year regarding cryptocurrencies. Coronavirus pandemic and bitcoin halving have impacted cryptocurrencies.
Banks and financial institutions have started to join cryptocurrencies in various forms. What’s even more interesting Bitcoin has started gaining support from politicians and senators in the US. Some of them actually own cryptocurrencies and believe on the mission they carry.
Anyhow, whether you trade manually or use automated trading software to trade, tips are always handy. Since you are here, obviously you want to start trading or you are trading and not making enough profits. So, here are five tips for trading cryptocurrencies and making money.
- Understand technical analysis
Many people pretend to make money by speculating the price of Bitcoin. Although there is nothing wrong with speculating.
However, a necessary skill to master is technical analysis. As e beginner, it might look a little intimidating, but once you get the hang of it, you will see the difference. Technical analysis includes understanding charts and candlesticks.
- Stay updated with the latest news and events
It is crucial to stay updated with everything that happens around the cryptocurrency world and more. Various events affect cryptocurrency prices so you must always know when is the right time to invest your money. The coronavirus pandemic is an example. Crypto prices crashed down in March 2020 due to the pandemic. So, people that were following what was happening had a great chance to invest while prices were low and then sell their coins later when prices increased.
This applies mostly to beginners. You can learn a lot by reading cryptocurrency-related content and especially price prediction articles where experience writers and traders share their knowledge. Except for news on the latest events, reading evergreen content and how-to guides is beneficial to gain more knowledge. Sites like Cryptopencil, Cryptopolitan, Cointelegraph, Coindesk, should be bookmarked on your web browser.
- Invest as much as you can afford to lose
“Never test the depth of the river with both the feet”. This is one of the best quotes Warren Buffet has regarding tp investing. Well, the same thing goes for Bitcoin. Never invest more than you can afford to lose. Cryptocurrencies are volatile and risky. There’s always a chance that you will lose money, so don’t invest every buck you have into cryptocurrency. Keep some in your pocket. You never know!
- Have patience
Patience is vital for a cryptocurrency trader. Many traders rush and sell their coins believing that the right time to sell them has arrived, but many times it turns that they were wrong. Rushing to sell your coin at the wrong time instead of hodling it can lead to loss of money. Although it is not easy to know what the right time to sell the coin is you should have patience and wait for the right moment to sell your coin. Trading experts are always out there like sharks waiting for beginners mistakes to take advantage of.
Cryptocurrencies are evolving and getting more recognition in the financial world. Learning to trade cryptocurrencies properly is a determining factor in your success in trading. Investing rightly in cryptocurrencies requires technical analysis and staying up to date with the latest events that might affect cryptocurrency prices. Researching and reading cryptocurrency content is key to gaining knowledge related to cryptocurrencies. One also must have patience when investing in cryptocurrencies.