5 tips for crypto beginners:
As a beginner in any industry, it is important to know and learn about the rules and terms of the industry. This will help you succeed in that market or at least avoid losses. Cryptocurrency market has seen several crashes and is filled with ups and downs. Compared to other trades, this market is highly volatile.
So in the middle of these crashes and rebounces, it is difficult to judge when and how much to invest. Also, there are hundreds, probably thousands of cryptocurrencies that come and go. So which one should you invest in? some people think that cryptos are illegal, ethically wrong, gambling etc. there are lots and lots of myths and misconceptions surrounding this trade. So here I bring to you some piece of advice especially for newbies in the crypto industry. If you are willing to join this volatile market then we welcome you aboard but do look at these tips before you jump in.
1. Before investing delve extensively: you should understand the blockchain technology before you step into crypto business. I do not mean that you should know the tech part but do read a lot about crypto and blockchain. This will clear your misconceptions and will broaden your mind and then you can see and explore the potential of this market extensively. This research will also help you find a safe platform for investing your money. Blockchain was created with a view to remove the third parties such as banks from monetary transactions and give the true ownership of money to every person.
2. Invest the amount which you can afford to lose: the most important rule in the crypto market is that you should invest only the amount which you can part ways with. If you invest a lot without caution you may end up losing everything. Some people invest more just thinking that this way they will get more returns also. But they fail to think the other way round. This market is filled with market sentiments and hype instead of fundamental elements and so it is too volatile and risky. It makes no sense to take a loan or mortgage your house for investing in cryptocurrencies.
3. Look at the bigger picture in the long run: do not expect to become an overnight millionaire by investing in cryptocurrencies. While there are some people who have done that, it was the case of mere luck. Do not only consider short term gains, especially if you are new to this trade. In this market, it is necessary to make all decisions of investment with patience and diligence. It is good to hold i.e. keep your coins for a long time even if the market is down or up. Short term trading can be disastrous especially for those that are not much technical or lack trading expertise.
4. Create a diversified portfolio: as a newbie do not put all your resources in a single coin or token. Spread your investment across the market after researching a few tokens. This will help in minimizing your risks. As a beginner, it is recommended to make some investment in Bitcoin and Ethereum which are the oldest coins in this market. Also, they are quite stable and can be easily exchanged for other altcoins. Choose coins with good fundamentals. A good portfolio will help you get better returns.
5. Remain alert: keep a regular check on your profit and loss. You should know the amount of satoshi your coin is worth because this will determine your profit or loss at a point of time. You should buy low and sell high to make money. Make careful and calculated investment decisions and you can surely succeed.
These are some of the basic tips for crypto beginners.