Here is some advice for people new to cryptocurrency trading and investing here in 2019. Heed these words and avoid some major pitfalls.
- Limit your risk and learn about risk management. Crypto novices tend to come in during a bull market and then go hard and heavy into a single coin with no exit plan. Don’t do this. Have an exit plan, and take calculated risks! Trying to run before you can walk is a mistake. You are almost always better off averaging into a range of projects as novice (because this strategy avoids going all in on the wrong coin at the wrong time). If you are a trader, learn to effectively use stops. Avoid jumping in and out of coins with all of your funds as a novice… and whatever you do, avoid using leverage as a newcomer.
- Stick with historic winners. It is fine and fun to take some moonshots, but your top coins by market cap like BTC, ETH, XRP, etc are the best starting coins and the major exchanges like Coinbase, Binance, and Bittrex are the best starting exchanges. If you go looking for too-good-to-be-true deals, you’ll may just run across a scam like Bitconnect and lose everything.
- Learn the basics of charting and market cycles. If you don’t know how to read a chart and you don’t know what a market cycle is, you better hope you just show up randomly at the start or in the middle of a long bull cycle. Every trader and investor needs to put aside the hype and learn the basics of charting and market cycles. If when you read this coins are going up and everyone is really bullish, know it isn’t always like this. If you learn about charting and market cycles, you’ll understand this for yourself.
- Avoid FUD and FOMO. Social media is really good at spread fear and mania, and seeing your account balance jump around doesn’t help (crypto can be really volatile). Make sure to focus on strategy and put emotions aside.
- Don’t buy something just because it is cheap, or ignore something just because it is expensive. The safest bet in crypto is probably Bitcoin, the most expensive coin. Some of the riskiest bets are very cheap coins. Supply matters and so does market cap!
- Secure your accounts with strong passwords and 2FA.
Want to keep life simple, average into BTC and ETH on Coinbase, maybe peppering in a few other Coinbase coins.
Want to head toward being a seasoned crypto trader or investor, learn to trade BTC and ETH for alts.
That sums it up. Now for more, read this long list of tips and tricks.