Six Tips for Cryptocurrency (and five errors, which should be avoided)

Six Tips for Cryptocurrency (and five errors, which should be avoided)

The best trading tactics often arise from years of investing in cryptocurrency markets..

Six Tips for Cryptocurrency

Before you start trading and try to make money on speculation with cryptocurrencies, Gain knowledge and understanding of market psychology.

1. Develop a cryptocurrency trading strategy

It's not easy to separate genuine cryptocurrency recommendations from scams. There are many sharks, who are waiting, To take your money.

Reports of cryptocurrency investment scams have grown to 8315 for 2021 year. According to Action Fraud, it's on 30% more, than for the whole 2020 year, At the same time, the average loss per victim was 25500 dollars.

therefore, When you come across a lot of information about cryptocurrency, Take a step back from the hype.

Try to take a critical look at the project. How many users does it have?? What problem does it solve?? Does it have any ties to industry?? Avoid coins, which promise a lot and beautifully, But in fact, they did not bring anything real and radically new.

2. Manage your risks

Some people, offering crypto trading tips, may not have your best interests at heart. So don't dwell on the same mistakes, as well as others.

Set limits on the amount, that you invest in a specific digital currency, and resist the temptation to trade for more, What you can afford to lose.

Cryptocurrency trading is a high-risk business, and more traders lose, than not.

3. Diversify your crypto portfolio

Don't invest too much in a single cryptocurrency.

As in the case of stocks and indices, Distribute your money between different digital currencies.

It means, that you don't run the risk of overestimating your position, if one of them drops sharply in price, Moreover, the market prices of these investments are very volatile.

There are thousands to choose from, So do your research. Examples include BTC blockchains, ETH, SOL, AVAX, ATOM, DOT, FTM, ALGO, NEAR, CKB, as well as exchange coins and tokens like BNB, FTT, 1INCH, DYDX, UNI, CAKE, C98, CRO, etc. Let's not forget about the DeFi sector and the current trend for metaverses like SAND, MANA.

4. Stay in it for a long time

Prices can rise and fall dramatically from day to day, And novice traders are often deceived, forcing yourself to sell in panic, when prices are low and buy when the market is in a growth phase. You need to understand this and do the opposite.

Cryptocurrencies are here to stay, and if you leave your money on the market for months or years, It can bring you better rewards.

5. Automate your purchases

As in the case of regular promotions, This can help automate your cryptocurrency purchases, To take advantage of cost averaging – Buy market drawdowns. As an example – redeem strong drawdowns S&P 500 in the medium and long term, Especially if you came out of the strait on the foot.

Most cryptocurrency exchanges, including Coinbase, Binance and Gemini, allow you to set up recurring purchases.

This is where crypto investors tell the platform to buy a fixed amount of their preferred cryptocurrency every month – for example, Bitcoin in the amount of 100 dollars. It means, that they get a little less currency, When prices are high, and a little more, When prices are low.

It relieves stress, related to attempts to calculate the market, or buying currency at the lowest possible price, or selling it at the highest price. That's it, that even market professionals are trying to get it right.

6. Use trading bots

Trading bots can be useful in some circumstances, But they are not recommended for beginners, who are looking for crypto investing tips. Often these are just scammers in disguise.

If there was a real algorithm, which perfectly synchronized your buy and sell trades, Everyone would use it!

Cryptocurrency market prices are highly volatile.

Five Common Crypto Mistakes

It's very easy to get caught up in the hype of news headlines. Errors in cryptography are strikingly common, And below we list some of them.

1. Buying only because, that the price is low

Low prices do not always mean a bargain. Sometimes prices are low for a reason! Beware of cryptocurrencies with falling user rates.

It is also common for developers to leave the project, and it stops updating properly, What makes cryptocurrency unsafe and unpromising. Be sure to study the project and the reasons for the price drop, Usually, the price already displays all the events for now.

2. Fall for scammers

Cloud Multiplier Scam

Scammers sometimes contact victims via email or text message with an "investment opportunity.". They promise to give investors double or triple the amount, which they invested in bitcoin, if they send their cryptocurrency to a specific digital wallet.

REMEMBER: Free money offers should always be treated with great skepticism.

Spoofing

Criminals can easily inflate or underprice very small or unknown cryptocurrencies, creating fake buy or sell orders and sometimes sending the value of currencies by hundreds of percent at a time.

When Unsuspecting Traders Break In, to try to grab a piece of the stock, Criminals cancel orders, which they were never going to perform in the first place, And in some circumstances, this can lead to a drop in price.

Sometimes, criminals will own a large amount of a certain cryptocurrency (by pre-mining most of it before, How it will become available to the general public).

They can raise the price, promoting it on social media, and then selling on crypto exchanges at a higher price. Then they disappear.

Malicious wallet software

The best crypto tips will tell you, How to Use Big Names in Crypto Wallets, such as Ledger, Trezor, Exodus or MetaMask, TrustWallet.

Fraudulent or unknown wallets on the Google Play Store or App Store can steal your crypto funds with a dodgy code.

Counterfeit coins

With so many cryptocurrencies on the market, it can be hard to say, What's real, and what is not.

When you invest in fake coins, Criminals can steal your identity and often your hard-earned money. They do this through phishing, persuading you to click on links in emails, that install spyware on your computer.

Don't take anyone's word for it and use as many sources as possible to do your own research.

3. Go all-in

Some of the more suspicious trading platforms offer you to maximize your money, Betting as much as possible. This is a fast track to the almshouse.

The best crypto investment advice would be to use only a certain fraction of your investment capital – say,, 5% – and always have a reserve cash fund, which is never invested in the market.

4. Cryptocurrency is "easy money"

There's nothing easy about it, To make money, trading any financial assets, Be it stocks and indices, Such goods, like silver and gold, or cryptocurrency.

Any, Who says otherwise, probably, trying to make you make crypto mistakes.

5. Forget Your Crypto Keyword Phrase

If you have a hardware wallet to store your cryptocurrency offline, Forgetting a key phrase is all the same, What to lose the keys to the bank vault.

Without your key seed phrase, all your cryptocurrencies will be irretrievably lost.

Bitcoin is the original digital currency and remains the most popular.

Know the crypto jargon (Basic terminology)

There's a lot of jargon in the cryptosphere, And it is often difficult to decipher.

Use this useful list, To make the most of the best crypto tips and avoid common crypto mistakes, that can blow up your trading account.

  1. Altcoin is a combination of the words "alternative" and "coin" (Coin). Altcoin refers to any cryptocurrency, different from the original, Bitcoin.
  2. Cryptocurrency exchanges. Like regular stock exchanges, Coinbase, Binance, Gemini and Bitstamp allow traders and investors to buy and sell, Except, that they trade cryptocurrencies here. Unlike standard stock markets, Cryptocurrency exchanges only work online and work 24 hours a day, 7 days a week.
  3. Restrictions. Most exchanges do not set limits or limits on the number of cryptocurrency trades, which their users can commit per day. On hectic trading days, When cryptocurrency prices rise or fall very quickly, Some brokers may temporarily suspend deposits on their platforms.
  4. "Shorting» or "Short» Cryptocurrencies means betting on price reduction, and not for growth.
  5. Forks. A cryptocurrency fork is a blockchain split, in which two separate blockchains are created. Sometimes, But not always, This is due to disagreements between the developers regarding whether, How the blockchain should be organized. AT 2017 Bitcoin split into two separate blockchains: Bitcoin & Bitcoin Cash, which subsequently split into Bitcoin SV (BSV) and Bitcoin Cash (BCH).
  6. .ICO is an initial coin offering, such as an initial public offering (IPO) or the placement in free float in the world of shares and shares. An ICO is when new cryptocurrencies are sold to investors for the first time.
  7. Margin trading. When Platforms Talk About Margin Trading, They mean, that investors borrow money, To increase your crypto stake. However, be very careful, Because margin trading can significantly exacerbate losses, If the deal doesn't go according to your scenario, And you will not set a stop - usually there is a threat of forced liquidation and loss of all funds.
  8. Fiat. Fiat currency is a currency, supported by a sovereign government. for example, rubles, Pounds, U.S. dollars or Indian rupees.
  9. Cloud Mining. People can "mine" or create cryptocurrencies, to compete for rewards in the form of a newly created cryptocurrency. Cloud mining uses remote data centers with shared computing power, such as those, on which Google software runs, to pool resources and reduce the cost of mining. Be extremely careful, As many companies, engaged in cloud mining, just scammers. Mining top cryptocurrencies requires an incredible amount of computing power. Any, Who Offers Easy Cloud Mining Rewards, probably, will be a charlatan.
  10. Bull and bear markets. These are phrases, borrowed from traditional stock markets. Bull market means, that traders are confident in the prospects of a particular investment, meaning, what they will continue to buy, And prices will continue to rise, whereas in a bear market, traders are nervous, and prices, usually, Fall.
  11. Sell orders. A sell order is an instruction, given by traders to the platform for the sale of their cryptocurrency, when the price reaches a certain level. In traditional markets, this is called "stop loss" and "take profit".
  12. Order book is a list of all orders from traders and bots on a particular cryptocurrency exchange or brokerage company, who want to buy or sell cryptocurrency at a specific price.

Use our recommendations and it will be a good initial help in trading activities. It is best to trade spot and top crypto assets, because futures with more than 3x are the most risky and you need to clearly understand what you are doing.

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