Do's And Don'ts
So, are you excited to invest in cryptocurrencies? Then let’s discuss some dos and don’ts that will be helpful for you.
1. Know the risk before you invest: As we mentioned earlier, cryptocurrencies are risky. Hence, ensure that you know the risks before you get into the market. A good idea is to keep in mind a percentage of your investment that you can risk and always keep it in mind.
2. Control your emotions: Fear and greed are two emotions that lead to impulsive decisions while trading. If you want to avoid bad trades, you should control your emotions, especially fear and greed. These are also the reasons why people fall prey to scams. Even the most professional traders feel greedy and fearful. Make a proper trading plan and stick to it, no matter what the situation in the market is.
3. Have a trading plan: Since we have been talking about plans, let us elaborate a little more. A trading plan always works in the long run. Make a meticulous plan and stick to it to avoid making bad trades. Revisit the plan from time to time and re-align the plan to suit the changing market conditions.
4. Follow time-tested strategies: If you are not sure where to start, you can follow established trading strategies. You will find many on the internet. Read trading tips and learn about common mistakes committed by other traders. Then slowly as you get experience in the cryptocurrency market, you will be able to make your own trading strategy.
5. Choose a reliable crypto trading platform: These days, many platforms are available for crypto trading, among which a lot of them are scams. Hence, you need to choose a reliable crypto trading platform before you start trading. When you hear a crypto offering, go online and learn about its legitimacy. You will find discussions on online forums such as Reddit or Quora. Be very sure that the trading platform is reliable before you transfer any funds for trading.
6. Have realistic expectations: Just because Bitcoins have performed extremely well in the past, doesn’t mean it will do so in the future or all other cryptocurrencies will perform in the same way. Don’t expect huge profits overnight and be prepared that the valuation may go down as well.
7. Don’t fall prey to fake news: The crypto market is still evolving. Lots of news arises which make traders act irrationally. This leads to bad decisions and losses. Don’t follow the herd. When you hear a news, check its authenticity first and act only if it is authentic.