Six Cryptocurrency Tips
If you want to invest in cryptocurrencies, here are six tips:
1. Have a crypto trading strategy
Separating genuine cryptocurrency recommendations from the scams is not easy; There are many sharks out there waiting to take your money.
Crypto investment scam reports surged to 7,118 in the first nine months of 2021. According to Action Fraud, this was a 30% increase over all of 2020, with an average loss per victim of £20,500.
So when you’re confronted with a lot of information about a cryptocurrency, take a step back from the hype.
Try to look critically at the project or platform. How many users does it have? What problem does it solve? Avoid coins that promise the earth but haven’t delivered anything tangible.
2. Manage risks
Some people offering crypto trading tips may not have your best interests at heart. So don’t get frustrated by making the same mistakes as others.
Set limits on how much you invest in a particular digital currency and don’t be tempted to trade with more money than you can afford to lose.
Trading cryptocurrencies is a risky business and more traders lose money than don’t.
3. Diversify your crypto portfolio
It’s not worth investing too much in a single cryptocurrency. Or as they say: don’t put all your eggs in one basket.
Like stocks, spread your money across different digital currencies.
This means you don’t risk being over-exposed if any of them fall in value – especially as the market prices of these assets are highly volatile.
There are thousands to choose from, so do your research. Examples are Worldcoin and Safemoon.
4. Be there for the long term
Prices can rise and fall quite dramatically from day to day, and novice traders are often tempted to panic sell when prices are low.
Cryptocurrencies will not go away. Leaving your money in the crypto market for months or years could give you the best rewards.
5. Automate purchases
Just like regular stocks and shares, it can help to automate your crypto purchases to take advantage of the pound cost average.
Most cryptocurrency exchanges, including Coinbase and Gemini, allow you to set up recurring purchases.
This is where crypto investors instruct the platform to buy a fixed amount of their favorite cryptocurrency every month – for example, £100 worth of bitcoin. This means that when prices are high, they get a little less of the currency and when prices are low, they get a little more.
This relieves you of trying to time the market by either buying a currency at the lowest possible price or selling it at the highest price. It’s something that even market experts struggle to get right.
6 . Use trading bots
Trading bots can be useful in certain circumstances, but they are not recommended for beginners looking for crypto investing tips. Often they are just fraud in disguise.
If there was a real algorithm that timed your buy and sell trades perfectly, everyone would be using it!
