Please don’t get me wrong. If you are giving your first steps in the cryptocurrency market and you have no prior experiences trading these kind of innovative assets, you will most likely face a few downturns in your way. But… is that a reason to stop?
Nope. Curious why? Because there are many easy-to-apply tips that will help you reduce risks considerably in your current or future cryptocurrency investment. Let’s check out 3 of them:
Set Stop Loss Orders (Always)
Take Bitcoin as a clear example. The world’s best and most famous cryptocurrency skyrocketed last year from $900 per unit to almost $20,000 a coin. THAT kind of volatility should be taken into deep consideration before placing a crypto order. And not especially due to the gains, but because when 2018 started, Bitcoin dropped sharply to nearly $6,000 per unit.
By the time of this writing, Bitcoin was trading at $8,622 per unit, down 253.0 points or 2.85 percent. The technical summary for a daily time frame suggested strong sell.
Trade With A Cold Mind
This advice is not only applicable to cryptocurrency investments. Actually, it is highly recommended for all type of investors in every single sphere of action. Keeping your emotions away from your trading station will save you hundreds of dollars. It is a proven fact.
Take decisions based on fundamental analysis. Take decisions based on technical analysis. Do not jump into a position because everybody else does it. Trust me. It will work on their side one time, two times, ten times. But eventually, they will all be mistaken and when they are… OH boy!
Is Crypto Investment Right For You?
Well, well… and here we are again. Back to stage one. The most important question you should always ask yourself before putting your money into a certain type of investment is: am I the right type of investor for this stuff? It’s basic, really, but it will help you avoid HUGE mistakes.
If you are the kind of person who is trying to make a few extra bucks without given your trades much attention, the crypto might not be the right choice for you. On the contrary, if you are willing to experiment, learn and act like a professional (even if you trade part time), then go for it.
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