The Secrets of Cryptocurrency Trading
If you knew the secrets of crypto trading you will be in a far better position to make more money. These are things that most people will not tell you about or warn your against. But these can make a world of difference to your trading outcome.
Top secrets of cryptocurrency trading:
- While people will suggest that a diversified portfolio is the way to go, this is recommended only if you plan on buying more coins and increasing their volumes to make more profits. Rather, it is important to decide how much to invest depending on how much you are prepared to lose through a single crypto. This strategy too has its pitfalls because it is difficult to know which coins will provide you with the best returns.
- Contrary to what you may know, market capitalization is far more important than price when it comes to choosing a crypto for trade. Most overnight success stories are the outcome of a bullish market for altcoins. Prices of coins are relevant once you know what its total supply is. It is market cap which will tell you about its value in the long run, its supply, and scarcity.
- When trading cryptos, you should never let your ego get in the way of making rational decisions. Investors often are more obsessed with getting their predictions right instead of focusing on how to make profitable decisions.
- You will find that people advise you to buy when prices fall and sell when prices escalate. But doing this is pretty challenging. The dramatic price swings in the crypto market make it really hard for traders to see beyond peaks. There are often short-term price fluctuations and market speculations which impact decisions. It is probably better to hold onto the asset instead of attempting to make quick profits in the short term. When you start to sell based on hype, you tend to become overconfident about what the best times are for buying and selling.
- You must never invest more than 10%-20% of your earnings into cryptos. This is usually what you can afford to keep aside after taking care of your monthly expenses. This is the secret to keeping your losses minimum.
- Whatever the temptation to trade in cryptos, you must never quit your current job to devote all your time to cryptocurrency trading. It cannot become your full-time profession no matter how inspired you feel reading about how traders became millionaires overnight by trading Bitcoins.
- One of the best-kept secrets of crypto trading is holding your coins to earn dividends. You will come across coins which will pay you for buying and then holding these assets.
- To make the biggest trade gains, you need to understand the crypto market and get your timings correct. The crypto world is unregulated mostly and this is why there are many differences in terms of prices, asset valuations, etc. This also explains why asset prices may vary from one exchange to another. And one of the tricks of making quick gains is by taking advantage of price differences. This is what arbitrage is all about.
- Finally, to be successful in crypto trading, it is very important to identify a secure and reliable trading platform. When it comes to the safest trading platform, the bitcoin era app tops the list. With just a € 250 deposit, this app guarantees an 88 percent success rate. Without this, you cannot be certain that your money will be in safe hands.
These are lesser-known facts about crypto trading which you will perhaps find mentioned everywhere. These are important observations which come from experience.