5 Tips For New Traders From Crypto Veterans
Bitcoin (BTC) was created back in 2008, and since then, the crypto market has expanded by leaps and bounds, with BTC and Ethereum (ETH) soaring in value to fresh all-time highs before calming down. Still, the top cryptocurrencies have appreciated in value over the long term, even for traders who missed the record highs. This mixture of extreme volatility and long-term growth has attracted many new traders to the crypto space, especially among retail investors who have no previous experience in the stock market or similar systems. One can speculate on short-term volatility and still invest in promising blockchain projects for long-term wealth generation.
After 10 years of growth and development, blockchain technology and cryptocurrencies have proven that they are no passing fad, and younger people who have grown up hearing about the money that can be made in crypto are less prejudiced than their elders against the new technology. However, even if you consider yourself tech-savvy, the crypto market is notoriously unpredictable, and it pays to know what you are getting into.
So, what's a young trader to do? A good first step with any new venture is to seek the advice of the early adopters, i.e., people who are more experienced in the field. Fortunately, veteran StormGain traders are here to share some of their hard-earned wisdom, which we have collected into a handy step-by-step guide for new traders.
1. Do your research
Before you start trading cryptocurrencies, it's crucial to understand the underlying technology and concepts. Take the time to learn about the fundamentals of blockchain technology, decentralised finance (DeFi), and various projects, especially the ones you're interested in investing in! Familiarise yourself with key terms, such as wallets, private keys and public keys, as well as the importance of security. StormGain's own education programme is a good place to start.
Remember that cryptocurrencies are, in most cases, not backed by hard assets, as is the case with commodities like oil or gas or even a company's stock. Hype and market sentiment can drive up the prices of coins with no apparent value, as happened with meme coins like Dogecoin (DOGE). As such, understanding the cryptocurrency community, its social media influencers and even its inside jokes can be just as important as researching the use cases of a blockchain project.
2. Have a strategy
Going into trading without a solid plan on what to do when things don't go your way — and even when they do — can lead to risky emotional decision-making. Instead, use what you learned from your research to form a strategy that helps manage risk and gives you something to follow when the market moves. Some sensible strategies for crypto trading include:
- Start small and build up – Reserve a set amount of your savings for trading and stick with it until you have profit to reinvest into the market. This means that you never risk more than what you can afford to lose.
- Diversify your investment – The old saying holds true for traditional investing as well as crypto: "Don't put all your eggs in one basket!" Spreading your investments across different cryptocurrencies instead of going all-in on just one is just sensible risk management. StormGain offers crypto indices that help you do just that.
- Use stop loss and take profit orders – These trading mechanisms allow you to set your buy and sell thresholds ahead of time, letting you react to the market with logical, pre-planned actions that you have decided you'll be happy with.
3. Keep a close eye on volatility
Cryptocurrencies are highly volatile assets, with prices changing much faster than other types of investment. That's part of the appeal: fortunes can be made overnight, but they can also be lost by the careless. They could drop quickly in seconds on nothing more than a rumour that ends up proving baseless. A good crypto trader who wants to profit from volatility needs to stay connected to the pulse of the market and get ahead of trends. To do this, one needs an up-to-date app that can keep them informed of market activity 24/7 with trading signals that help to spot emerging patterns.
Riding out market volatility can be emotionally taxing, and it's easy for inexperienced traders to panic and buy or sell at the wrong moment. Remember, when prices are going down on a typically volatile asset, that's a chance to buy on the cheap and sell when volatility swings in its favour again. "Buy low, sell high" sounds simple, but decisions should be made carefully and with a considered view of an asset's performance.
4. Learn from mistakes
Mistakes are an inevitable part of trading, and part of the emotional resilience that experienced traders build up is based on knowing that they will come sometimes and what to do about them. Instead of viewing your mistakes as failures, treat them as learning opportunities. Analyse your trades, identify what went wrong, and adjust your strategy accordingly. Continuous learning and adaptation are essential for long-term success in the cryptocurrency market.
5. Use StormGain's features
The above tips were sourced from StormGain users who have stuck with the crypto game the longest. They have seen new features and updates added to StormGain that make it an increasingly useful and powerful all-in-one crypto platform. And all agree that new traders should make the most of StormGain's features to get as much advantage as they can at the beginning of their trading career. This includes taking into account StormGain's profit-sharing model, using risk management strategies such as tokenised stocks and indices, earning interest on crypto holdings, and remembering StormGain's built-in BTC cloud miner to earn a little extra crypto while you trade. It adds up in the long run!
Not a StormGain user yet? Sign up in just a few seconds and try a demo account to start your journey into the exciting world of cryptocurrencies.