Crypto trading and investing are not one and the same thing. Crypto investing typically implies investing in cryptos for the long term in the hope that prices will go up whereas trading is done by those keen to take advantage of frequent price rises and falls. Both investing or trading in cryptos is daunting to say the least because the crypto market behaves rather differently from the regular stock market.
A beginner’s guide to crypto trading and investing:
- Crypto trading refers to buying or selling of digital assets to make profits. have to worry about others knowing your identity. To start crypto trading, you must do ample research on the coin you wish to invest in. This involves reading the coin’s whitepaper and tracking its history through websites like CoinDesk or CoinMarketCap which offer important information and insights into market trends.
- You must get a digital wallet to keep your cryptos safe from hackers. For this, you can choose between hardware wallets that provide offline storage and software wallets that offer online storage. The latter is more prone to hacks and cyber security threats. They are called “hot” wallets because they must be connected to the Internet for users to view transaction history or conduct transfers. They are more convenient but less secure than hardware wallets which store private keys on physical devices such as a USB stick. Ideally, you should store your long-term funds in a hardware wallet and use software wallets for storing smaller amounts.
- Your next task is to find a crypto exchange to buy and sell cryptos. The exchange you choose will influence how you trade, how you withdraw money, and which coins you can access. So, it is vital to choose one that has a solid reputation and places more focus on security norms.
- To start trading, you need to educate yourself with strategies like Hodling, scalping, swing trading, etc to make profits. Instead of only relying on Twitter experts or following the hype, you must choose one that you understand and can easily implement. While no strategy can guarantee you returns, you can be sure that a smart and well-defined strategy can help you minimize losses. But if you are a beginner in trading, it is highly recommended to opt for trading bots like Bitcode method. Because these bots execute your trades on your behalf with maximum accuracy and high success rate. You can also conduct a Bitcode method test to verify the authenticity of the site.
- You need to track your portfolio because the crypto market stays open day and night. It is not physically possible for crypto traders to stay glued to their screens 24×7; neither is it healthy to do so. Instead, you can take advantage of tracking apps which display real-time market movements and report how healthy your portfolio is.
- When investing in cryptos, you must first decide which coin to invest in. While Bitcoin continues to dominate the crypto space, there are new coins being launched every few days. It is best to start off with the most stable coins like Ethereum or Bitcoin and then keep adding new cryptos for diversifying your investment portfolio.
- You must have a storage wallet for storing your coins for the long term. It is naïve to keep them on an exchange because exchanges have often been hacked and funds permanently lost.
- You must learn how to ignore the noise and research on your own before making an investment.
- You should never invest more than you can afford to lose; moreover, you must never put all your money into a single crypto asset. Rather, you should diversify your funds across multiple cryptos to reduce risks of losses.
So, regardless of whether you invest small or big, you need to understand how the crypto market works, where it stands currently, and maintain safety precautions. Have a long-term plan and build your portfolio bit by bit.