Learning how to trade cryptocurrencies can be a lot of fun and it is possible for just about anyone to do it. The market doesn’t really have any barriers to entry and you can even get started if you don’t have a ton of money. While it is indeed possible to make money by trading cryptocurrencies, it is also necessary to be careful because one mistake can wipe out everything you have earned. This is especially true if you are new to the world of cryptocurrencies and don’t have much knowledge about how it works. The cryptocurrency market is a volatile one and there are some things that everyone should do before they start trading cryptocurrencies.
What are they? Read on to find out:
- Secure your email address
First and foremost, you have to be your own custodian if you want to trade cryptocurrencies. This means you need to ensure the security of your accounts, especially your email address. If your email address is compromised, it could be disastrous because this will give the hackers or scammers access to your trading account with a broker or exchange. You need to use a strong password and not use it elsewhere. Also, using 2-factor authentication is also a good idea.
- Find a reputable broker
It is vital to bear in mind that no two brokers are created equal. You cannot just trust anyone with your funds or identity. Speak to any crypto veteran and they will tell you the horrors associated with scam and shady brokerages. Lots of them made off with the funds of their clients. Your priority should be on finding a well-established platform, such as Solid Invest, that allows you to do your trading security and is transparent about its services.
- Learn something about technical and fundamental analysis
While you don’t have to be an expert, it is a recommended that you understand the basics of fundamental and technical analysis. If you want to succeed in the market, it is a good idea to take some time and understand how the market works, the assets you wish to trade and the kind of return they have to offer. Sure, traders are known to make money on cryptocurrencies they don’t intend to hold, but these traders know when to get out and you should as well.
- Establish reasonable goals
If your aim is to become a millionaire within a week simply by trading cryptocurrencies, then you are in for a disappointment. You need to have reasonable goals when trading and should always learn lessons from the losses you make. It is perfectly acceptable to have a goal of making a certain percentage of profit, you should bear in mind that a lot of traders make their returns through several small price bumps rather than big ones.
- Be careful about what you don’t understand
Yes, learning about fundamental and technical analysis is important, but you should learn how to use them according to your abilities. Always begin with the basics rather than jumping in the deep end of the pool and trying something complicated. If you feel lost, reliable brokers, like Solid Invest, provide their clients with access to educational resources and tutorials that can help them understand how the various aspects of trading work.
- Never invest more than you can afford
You may feel very proud of yourself after you have made a couple of winning trades, but you shouldn’t let it go to your head. It is possible that it was based on pure luck and you need to be cautious about how much you invest. A lot of people made the mistake of investing their rent money and some even got loans to ride the crypto boom, but it only led to disaster. If you cannot afford to lose the money, you should never invest it in the first place.
It is possible to enter the world of cryptocurrency with a very small investment. There is no reason for anyone to put themselves in debt just to try their luck in this market. If you don’t have a lot of money, you can set aside a little bit and slowly grow your portfolio.