The recent rise of digital currencies has attracted a new wave of fresh-faced investors and traders looking to cash in on the hot asset of our time. However, just as with any investment activity, trading cryptocurrencies comes with its own unique set of risks and challenges. That’s why it’s so vital that you properly prepare yourself before entering the market, so as to avoid any unwanted surprises and maximize your profitability.
When you’re just starting, it can sometimes be hard to know where all the potential pitfalls lie, which is why we have compiled this handy list of tips and tricks to help crypto newcomers put their best foot forward:
Don’t listen to all the armchair experts
Nowadays, everybody seems to think that they’re a crypto guru and you’re sure to hear hundreds of voices telling you that “now is the time to buy” a given coin (and just as many saying that it’s as dead as a dodo). Even in mainstream media, articles are constantly being written about how digital currencies are nothing but a fad at best or a pyramid scheme at worst. Once you have made the decision to enter the market, you have to learn to ignore all this “noise”. Do your due diligence, develop a clear trading plan and be sure to use stop loss/take profit orders. If you can do all that, you shouldn’t worry about what other people are saying. Have faith in yourself and your own critical thinking abilities.
Know exactly how much your trades will cost you
So, have you made the decision to invest? Great! However, before you settle on a broker, make sure you have read their full fee/commission policy in detail. There are many unscrupulous brokers out there that will lure you in with seemingly low commission, but then milk you for all your worth with hidden fees. That’s why it’s always best to look for companies like StormGain whose commission/fee structure is totally transparent and who only charges the swap rate once per day, especially if you plan on day trading.
Expect the unexpected
Cryptocurrencies aren’t for the faint-hearted. The endless ups and downs are enough to turn even the most seasoned of investors into a ball of nerves. But it’s absolutely vital that you stick to your plan and do your best to block out the fear and anxiety. Easier said than done, I know. The truth is that some obscure altcoins can indeed skyrocket by 1000% or more, but they can just as easily disappear entirely, along with any money you invested. Huge volatility and price fluctuations are just a fact of life in this market. In StormGain, we provide our clients with customized trading signals, which help users sense the market mood.
Make sure you know all about wallets
Hot, cold or mobile? If you have no idea what I’m talking about, you should probably do some more research before investing. These are of course the three different options you have for storing your crypto coins after purchasing. The term “cold wallet” refers to offline media storage such as hardware ledgers, paper keys, and certain offline software solutions. These types are generally considered the safest as they are virtually impervious to hacker attacks. However, on the other hand, they make it more difficult to access and use your crypto and – if lost or destroyed – your coins will be gone forever. When we talk about “hot” wallets, we usually mean storing coins on an online exchange or on a piece of software that is connected to the internet in some way.
This method is preferred by beginners for its ease-of-use and convenience. There’s no doubt that it makes your coins much more accessible, but this also means that they’re within reach of those pesky hackers. Mobile wallets, as the term would suggest, are crypto accounts hosted on your smartphone. They are pretty much the same as hot wallets, except that they leave you even more exposed, due to the particular vulnerability of mobile devices to both remote and physical threats. In short, as a beginner, you will probably want to go for a hot wallet, which is absolutely fine. Just do your research and make sure you are choosing a secure and reliable platform like StormGain.
Diversify, diversify and diversify some more!
This point cannot be emphasized enough. It stands to reason that you should never put all your investment eggs in one basket, but in crypto, it truly is imperative. That means that you shouldn’t just put everything in Bitcoin (even if most cryptocurrencies are somewhat tied to its movements). A strong wallet ought to include some Bitcoin and Ethereum as standard, but also some small quantities of more mainstream altcoins.
We hope that you find these tips helpful as you begin your journey into the world of cryptocurrency trading. Be sure to heed all our warnings – and take our advice on board – and you should be able to boost your success while reducing your risk significantly. Happy trading!
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