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cryptocurrency trading tips

Learning from Experts: Top Cryptocurrency Trading Tips for Beginners

Trading in cryptocurrencies is a relatively new concept. The crypto market is more than a decade old and has shown great potential in the past. Although the crypto market shies away from traditional economic rules, it retains the demand-supply law.

In recent years, several cryptocurrencies have cropped up, and there is a strong desire amongst several crypto developers to create a cryptocurrency equivalent to the undisputed king of cryptos, “Bitcoin.”

Each crypto developer is in a race to create a perfect and well-balanced cryptocurrency.

These crypto developers will try to create an innovative way to bring forth a cryptocurrency that would become the next big thing after Bitcoin.

Many crypto traders are still regretting that they missed out on a perfectly good opportunity when Bitcoin was well within their reach when its price was trending from a few cents to a few dollars. Although Bitcoin was created in 2009, the price trend was mere cents. It was after 2017 that Bitcoin started trending in thousands of dollars and reached its all-time high in 2021, trending at more than $65,000.

Today, since several developers are creating cryptocurrencies that are available in the market, many crypto traders, thinking that the crypto they invest in will be trending in the thousands in a few years like Bitcoin, fall prey to crypto scams.

The developers will create a cryptocurrency and boast to their followers about how it would revolutionize current cryptocurrency trading. After creating much hype, many crypto users will start pouring their money into the currency, and as per demand-supply law, the price of that currency will begin surging. A point will come when the developers will sell all their crypto and leave their users with worthless cryptocurrency. These developers will make a substantial amount of money and leave the crypto world without a trace.

A famous example would be a crypto called “Squid.” The crypto was named after a famous South Korean drama called “Squid Games.” Many crypto users fell prey to it. You must use caution when it comes to investing in cryptocurrencies.

For your benefit, we have listed below a couple of trading tips that you can remember before you begin your journey into the crypto world.

Learning the jargon

Several jargons are used in the crypto world, and getting in touch with them will help understand the current market scenario of the crypto world. A few do crop up once in a while. So understanding them is equally important.

How to Read a White Paper

Every cryptocurrency has a white paper or a technical paper that explains why the developers created it and how and why it will have an impact on the world. The paper will also include the technology that would be used; for example, Ethereum is based on proof-of-stake as compared to proof-of-work, on which Bitcoin is based. These technical papers can be confusing, as most of us are not well versed in computer language. But this can also be understood, as you will get answers to it as you keep on reading.

Joining the crypto community

Joining a good and reputed crypto community can be advantageous. Not only will you learn the latest jargon but also the white paper of a cryptocurrency. Since the community is dedicated to cryptos, you will also understand the different trading techniques and how research is being carried out.

Staying cautious

Although you may join a crypto community, this is also not a safe approach to the crypto world. You might be tempted to invest in certain cryptocurrencies; however, you must use caution, as we have already discussed the high rug pull, pump, and dump of certain cryptocurrencies.

There might also be a situation where the strategy of a certain community member has a different approach that clashes with yours.

Setting your own financial goals

Before you even begin your crypto trading journey, ask yourself why you want to enter the crypto world. And you must also be prepared to part with some of your financial assets to achieve those goals.

Every crypto user has a different financial aspiration and lifestyle. They have different goals too. These goals will help you stay focused on the dreams that you would like to manifest into reality.

It would become easier for you to select a trading style that matches your personality once you understand your financial goals and aspirations.

After gaining sufficient experience in interpreting external factors that influence the price trend in the cryptocurrency market. While trading, several graphs and charts can be used, and some external factors also influence the price factors. Once you begin to understand what makes the price sentiment of cryptos fluctuate, half the battle is won when you start trading in the crypto world.

Crypto Exchange

Several online crypto exchanges are available for you to choose from. There are several reasons why you should not settle for any other crypto broker or brokerage firm when selecting an online crypto broker or brokerage firm. Again, several scammers would love to get hold of your hard-earned money.

  • A reputed trusted, and reliable crypto broker or brokerage firm should be chosen. Check if your state or country allows them to run their business.
  • Go through their review page to understand how they treat their clients.
  • If the website contains incorrect English or poor grammar and punctuation, it is best not to stay on the site any longer, even if the services are reasonably priced.
  • Every online crypto broker or brokerage firm has a dedicated client service center. Be sure to check them out before choosing.
  • Brokerage is typically charged on each trade, and this is how a cryptocurrency broker or brokerage firm makes money. Some might also have hidden charges, so it is wise to check with your local CPA or certified public accountant.
  • Several online crypto brokers and brokerage firms offer online crypto trading services and articles that can be used to learn more about cryptocurrency.
  • Some also offer frequent webinars for you to understand the latest developments in the crypto world.

Trying out your skills

Some online crypto brokers and brokerage firms offer a demo account that uses virtual money. So you can try all your skills on it without fear of losing money. These demo accounts have all the charts and graphs you need to create a strategy.

Once you are confident about your skills, you can try the live account, which is exactly similar to the demo account but uses fiat money instead of virtual. 

A hot and cold wallet

With rising scams in the crypto world, you may be interested in investing in a crypto wallet because parking your money in a crypto exchange is risky, as many crypto exchanges are going bankrupt due to poor wealth management.

Having a wallet is tedious, but at least your assets would be safe, and in the event of the bankruptcy of the exchange, you can be assured that your cryptos are safe and sound in your wallet.

Conclusion

Investing in a cryptocurrency is not a bad idea; you have one more financial market besides the traditional ones in the world. It is just that some greedy corporations take undue advantage of crypto traders and commit scams. There is also a risk of choosing a crypto broker or a brokerage firm originating from a third-world country, which mostly runs scams rather than earning an honest living.