12 Golden Rules For Profitable Crypto Trading
Cryptocurrencies’ rapid growth offers fantastic investment opportunities, not only for average individuals but also for large companies and business organizations. Digital money is on the rise due to technical advancements, and more countries throughout the world are attempting to implement decentralized allocations as payment options. Therefore, one must know which Crypto trends will be relevant in 2022 to achieve profitable investments in this market.
During the last five years, Cryptocurrencies investments have exploded around the globe, with 14 percent of Americans now holding digital assets in their portfolios, up from 1% in 2016. Furthermore, after 13 percent of survey participants stated a willingness to purchase Cryptocurrency in the coming months, several Crypto specialists anticipate that this percentage will more than increase by the end of 2021. Therefore, the following 12 Crypto investing pieces of advice can assist you in making wise decisions in the new year.
Investing in Crypto assets is a simple approach to lower risk and increase earnings. This type of trading is referred to as asset allocation or diversification. The popular technique is to invest in a variety of Cryptocurrencies to ensure that you profit when one of the numerous industries sees growth.
Also read: Can Bitcoin Be A Good Inflation Hedge?
2. While performing analysis, don’t use several indicators:
The moving average, Fibonacci retracement levels, Bollinger Bands, the directional movement index, the Ichimoku Cloud, the parabolic SAR, the relative strength index, etc. are only a few examples of other technical indicators. There are countless ways for tracking these indicators when you consider that each one has different settings. Experienced traders know that accurately reading the market is more important than selecting the best indicator. A few people prefer to look at correlations with traditional markets, while others only look at Cryptocurrency price charts. There is no right or wrong here except for trying to track five separate indications simultaneously. Markets are dynamic, and this is particularly true in the Crypto world because of how quickly things change in a matter of seconds.
3. Maintaining your portfolio:
New young investors could have up to 10% of their portfolio in Cryptocurrency, while senior investors should not have more than 5% of their portfolio in Crypto. Investors who choose trading as a full-time profession must keep up with rapidly changing industry trends and comprehend new technologies such as DeFi and NFTs.
4. DeFi staking:
DeFi staking is a method of earning annual interest by storing your Crypto assets in specific autonomous platforms known as decentralized applications. DeFi is a subgroup of the Crypto business that aims to put traditional financial services such as loans and insurance on the Blockchain. So whether you solely plan on buying and holding Cryptocurrency, DeFi staking is a good approach to get the return on your invested money. It’s important to note, though, that not every Cryptocurrency can be staked.
By now, you must be knowing how copy trading works- if not, let me give you a brief explanation. Copy trading is a sort of investment trading in which you copy and export investors’ deals automatically. This is a completely hands-free method because copy trading Cryptos eliminates the need to research and watch the market. Thus, you can’t foresee a trader’s performance in all the future movements of Crypto assets, it’s critical to settle the loss limit.
Also read: What Is Crypto Copy Trading?
6. Keep up with the latest Crypto trending news:
Purchase the rumour and sell the information. It is critical to keep up with the recent Crypto market news if you wish to achieve a regular profit from Crypto trading. Crypto traders can sometimes forecast the ups and downs of the Cryptocurrency market. For instance, if a major country outlaws Cryptocurrency or if a well-known Crypto trading platform is hacked. It has the potential to lower the price and if a well-established business integrates with Bitcoin, or if Beneficial regulations are announced, the price may surge.
7. Hedge Crypto Trades:
Hedging is a form of investment technique that aims to minimize the risks and losses caused during market price fluctuations. Going long or short in the futures market is a common technique for Crypto investors to hedge their investments.
8. Commit to Crypto tokens with large market capitalization:
The strategy should be to stick to high-market-cap tokens and build an environment-conscious of the risks involved. Therefore, Cryptocurrency should not always be viewed to become rich quickly.
9. Know when to take a break:
One will ultimately misread the market when looking for bottoms or Cryptocurrency seasons. Every trader makes mistakes from time to time, and there’s no need for two chests by increasing the bet size quickly to make up for the losses. This is the polar opposite of what one should be doing. When you have a “bad break”, take a break for a few days. The psychological toll of losses is significant and it will hinder your ability to think properly. Allow that one to pass even if a clear opportunity presents itself. The most successful traders aren’t necessarily the most gifted, but rather the ones who have survived the longest.
10. Select one Crypto:
Encounter the market cautiously and buy the coin that gives you the most confidence. Then, before extending your portfolio, commit to your choice and track your success. Consider this strategy as a learning strategy, and make sure to give some time to learn about one Crypto at a time.
Also read: Top 5 Crypto Trading Softwares
11. Choose the right crypto:
It’s not a surprise nor a secret that Cryptos are very volatile; in fact, the whole Crypto market is. Most Altcoins lose value over time, and in some instances, they are speedy. Thus, only trade Cryptocurrencies that have some strength behind them. For example, consider Altcoins with large or medium daily trading volume and a large community that is constantly growing.
12. Avoid ICO scams:
Initial coin offerings, or ICOs, are a type of Cryptocurrency. Many newly created or soon to be launched Crypto coins offer crowd sales to investors, giving them the option to buy at a cheap rate for a day or two. This is designed to increase the coin’s trading volume from the start. It can sometimes result in a profit for investors because the currency value has doubled or tripled compared to the crowd sale price. However, many coins have proven to be a hoax; they’re traded for a day or two before disappearing, or they take your hard-earned Bitcoin. As a result, be wary of new projects that offer crowd purchase.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.