Date:
07th Sep 2020
Author:
CryptoGT
7 Tips for Beginners to Trade Cryptos
Bitcoin (BTC) has strongly demonstrated its value recently and is emerging as a popular hedging tool against economic uncertainty. Other digital assets like Ethereum (ETH) and Ripple (XRP) are being used extensively for cross-border transactions, enterprise blockchains and data security. Apart from the market price, investors rely on the perceived “inherent” value of cryptocurrencies to make trading decisions. This includes the integrity of the decentralised network, cryptographic code and the overall technology itself. Speculation on future potential of these technologies has driven most of the market capitalisation, which stood at $336 billion, as of September 2020.
Nevertheless, cryptos remain hugely volatile assets and trading them requires a certain degree of knowledge and careful strategy planning. Here are some tips for those just starting out trading cryptocurrencies.
Nevertheless, cryptos remain hugely volatile assets and trading them requires a certain degree of knowledge and careful strategy planning. Here are some tips for those just starting out trading cryptocurrencies.
Understand the underlying technology in detail and the factors that impact crypto prices. A beginner could consider starting with prominent coins like Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP), which have comparatively higher liquidity and use cases for real world applications. The greater the industry adoption of a cryptocurrency, the greater its demand and price.
Stay informed about the latest market developments and news releases that could impact price trends.
Stay informed about the latest market developments and news releases that could impact price trends.
Make sure you understand concepts like leverage, spread, position size and swap rates before you start trading. This is essential for making informed decisions and create trading strategies accordingly. Choose to trade crypto CFDs with a broker who provides the lowest spreads and maximum leverage. These factors will influence your trading costs and long-term returns.
FOMO or the Fear of Missing Out is a huge factor in trading cryptos. There is no denying that cryptos are based on valuable technologies with huge potential for future monetary systems. But, the market is often controlled by “whales.” These are small groups of big investors who sometimes control a huge portion of a cryptocurrency, thereby influencing its price, at times even making them overvalued. Investment cannot be an emotional act. Before entering a trade, consider careful research and technical analysis to ascertain future price trends.
Trading crypto CFDs on margin provides opportunities to increase potential gains. But, leverage also magnifies losses, when the market moves in the opposite direction. Before entering a trade, consider your risk/reward profile. This determines the amount of losses you are comfortable bearing, based on your long-term investment goals. This can help you decide on the leverage, position size, choice of assets and strategies.
There are two aspects of risk management in trading cryptos. Firstly, protecting your positions against downside risks is essential, especially since crypto prices are highly volatile. Tools, such as stop-loss and take-profit, can stop your losing positions from running on, ensuring that your capital account doesn’t get eroded.
Secondly, cryptos are digital assets, stored in online wallets. These wallets are prone to hacks and thefts. Make sure your computer is sanitized with good antivirus software and your assets are stored in multi-sig wallets. Use 2-Factor authentication to backup codes in a safe space offline.
Secondly, cryptos are digital assets, stored in online wallets. These wallets are prone to hacks and thefts. Make sure your computer is sanitized with good antivirus software and your assets are stored in multi-sig wallets. Use 2-Factor authentication to backup codes in a safe space offline.
A strong trading strategy helps avoid emotional decision making. At its core, it has to be based on realistic investment goals, trading style and a good understanding of potential losses or profits. This includes several elements, such as:
- Choice of crypto pairs
- Enter/Exit strategy
- Technical analysis tools and signals
- Stop loss and take profit levels
For an enhanced trading experience, choose a stable and feature-rich trading platform. Platforms like MetaTrader 5 (MT5) allow comprehensive technical analysis capabilities, order and risk management and market research options. For those interested in automated trading and backtesting strategies, the platform provides rich features too.
To trade in the volatile world of digital assets, the support of a good broker is invaluable. Markets can be unpredictable, so a broker platform that offers scope for portfolio diversification is needed for long-term success.
To trade in the volatile world of digital assets, the support of a good broker is invaluable. Markets can be unpredictable, so a broker platform that offers scope for portfolio diversification is needed for long-term success.
This website cryptogt.com is owned and operated by Hatio Ltd. Hatio Ltd is a registered company in Marshall Islands, with registration number 90645 and has its registered address on Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960.
Cryptocurrency trading can be extremely risky and can lead to large and immediate financial losses. Crypto assets are highly volatile and can result in significant losses of your capital over a short period of time. Cryptocurrencies markets are unregulated services which are not governed by any specific regulatory framework. The provision of such services is not being directly provided by the Company but through licensed third parties.
CryptoGT does not provide its services to residents of various jurisdictions such as but not limited to the United States of America, North Korea and Cuba.
CryptoGT currently accepts only cryptocurrencies as method of deposit.
Cryptocurrency trading can be extremely risky and can lead to large and immediate financial losses. Crypto assets are highly volatile and can result in significant losses of your capital over a short period of time. Cryptocurrencies markets are unregulated services which are not governed by any specific regulatory framework. The provision of such services is not being directly provided by the Company but through licensed third parties.
CryptoGT does not provide its services to residents of various jurisdictions such as but not limited to the United States of America, North Korea and Cuba.
CryptoGT currently accepts only cryptocurrencies as method of deposit.