Investing in crypto might feel like the Wild West, especially if you know little about this industry. Making educated decisions regarding your next moves has become crucial, but we know it is challenging with such market diversity.
Learning the nitty-gritties of trading is helpful, but all this information might confuse you even more. That is why it is recommended to keep relevant and safe sources for information at hand and not trust unverified ones. We know that your goal is to become a successful crypto-trader, but you cannot achieve that title if you do not know what a crypto-trader is. Such traders are individuals who take advantage of the short market price changes to purchase as many digital coins as possible at low prices and sell them when the market rises again. This tactic is known as buying the dip and selling the rip and has started to be increasingly used by traders and investors worldwide. But you have to understand some crypto principles before using such tactics.
Thus, here are some things every successful investor should know:
Detailed research from reputable sources
Before starting your trading adventure, you need to get more insight into the crypto market and know your objectives well. Trading can be lucrative, but only if you understand it, so we highly advise you to do your homework before buying any currency. Read from trustworthy and reputable sources like Binance that constantly update information about each cryptocurrency, and do not let others influence you. It is common for celebrities to talk about cryptos on social media, the reason the price may rise rapidly. But more often than not, this rise is likely to be a moment of glory and then nothing – the media is moving to another currency.
Take your time researching any investments you are interested in and put choices in balance to make the right decision.
Do not be surprised by the crypto volatility
When it comes to crypto, it is all about the relationship between risk and reward. Even in the case of well-established currencies like Bitcoin and Ethereum, you can still encounter fluctuations in price. But this is only normal, at least for the moment. The crypto market is relatively new, with hundreds of currencies in their early stages, so you cannot expect consistency from it yet. These currencies are untested assets, which explains the sometimes-wild fluctuations. And there are the investor and user sentiments, supply and demand, media hype, and government regulations that can influence the price stability of a currency. However, if you document well before making any decision, there are chances not to fall victim to crypto volatility.
Our advice would be to invest in what you understand – otherwise, you might find yourself in an unpleasant situation where you lose instead of win, which is the nightmare of any investor. Regular check on the crypto’s price you have plans with is also of great help. If you see a particular currency suffer huge fluctuations in a short period, you would better opt for a more established one. You can access the Binance platform for detailed and relevant information about any existing currency. For example, if ETH has caught your attention, you can check the current Ethereum price and see if it suits your financial expectations.
How to invest in new coins
If you are a crypto newbie, you should know that it is not recommended to invest in coins that are not worth the risk. But how do you know which is promising and which is not? You can only do a little research and look for somewhat stable coins, even if they are relatively new on the market. Investing in new coins is nothing wrong, but you must choose wisely. One of the best ways to invest in new currencies is to buy a bunch of them, especially if you are not prepared to break the bank. Take also into account to mine the crypto you are interested in, but make sure you have plenty of time on your hands. Mining has become increasingly popular lately and is defined as the method in which digital coins are generated and the transactions implying new currencies verified. Looking to invest in new coins? Take the time needed for proper research and dedicate yourself to it. Money does not come overnight – you have to be patient and accept the possibility that you can also lose.
Invest for the long term
Long-term investing in crypto is probably the safest method to make a profit. Even if you invest in a new coin or well-established currency like Ethereum, holding it for the long term offers you the chance to recover the investment and make a long-term profit. Besides, the virtual coins you invest in will likely pay off for you in time, which is the goal of any investor out there. Short-term investments might be tempting, but they will only pay for a short time if you get lucky.
Have you ever heard of the buy-the-dip and sell-the-rip method? It is common among successful investors to buy coins at a bargain price and sell them when the market is hot, but it is not that simple. You need some experience, and this can be achieved over time. So, do not be surprised if the buy-the-dip tactic does not prove successful on the first try.
Investing in crypto without getting scammed
The crypto world is still unexplored, so you are more than entitled to wonder how you could invest without getting swindled. We know that we have already gone over all this stuff, but one of the best pieces of advice we can give is understanding the crypto basics. You have little chance of getting scammed if you understand what you buy. Each digital coin has its own blockchain, which keeps track of all transactions made with that coin. When you purchase a new coin, it goes to your electronic wallet, which is secured with a password. How strong this password is is only up to you, so make sure you create a phrase-like password that combines random letters, numbers, and symbols and has nothing to do with you to protect yourself from potential malicious actors.