Which Tricks Do The Experts Use When Trading Cryptocurrency?

Cryptocurrency & Bitcoin

Investing in cryptocurrency has grown by a ton in recent years, and more and more people are getting involved. While many invest in Bitcoin, there are several different other coins and assets people can buy, trade and sell as well. Some people invest only a few hundred, while others invest thousands and thousands of dollars.

However, no matter what coin you invest in or how much you invest, there are some general tips that are useful for both experts and experienced traders. These tips will help ensure your investments are sound and are worth considering if you are new to crypto investing.

Without any further ado, let’s take a closer look at some of the tips and tricks that the experts use when they trade cryptocurrency.

Don’t Fall for FOMO

FOMO (or fear of missing out) is something most of us experience at some point. This could be watching your friends having fun at an event while you’re at home, or seeing someone’s vacation pictures and growing jealous. This phenomenon is also incredibly common in the investing world.

Seeing a coin or crypto assets explode in value, and not owning it, can lead to FOMO in a big way. However, it is important not to give in, and keep moving forward. The last thing you want to do is invest money when you are simply scared of missing out on the wave. While you may choose to invest in the growing asset, don’t do it because you fear missing out on the growth, as that is a recipe for disaster.

Have Targets and Stick to Them

When investing, it is incredibly important to always have a plan. Without a plan, you run the risk of getting reckless and careless, which can lead you to lose money. For every asset, you invest in (or want to invest in), you need to have targets. You should have a target price for your entry into the market, and for your exit.

In addition to having these targets to enter and exit the market, you need to stick to them. Plans aren’t worth anything if you’re not sticking to them. Don’t fall in love with an asset, simply invest based on facts. Also, be aware of how low you will let an asset go. Some people hold onto coins for way too long, waiting for expected growth that never comes.

Know Where to Invest and Trade

With the high popularity of cryptocurrency has become, there are literally dozens of places to invest, trade and hold your cryptocurrency. However, in order to get the most bang for your buck and ensure your experience is the best, you need to be attentive while choosing which platform to use.

The right option for someone else might not be the right option for you. As a result, it is important to take time to perform your own independent research on various coins. You should consider their fees, security, the countries they operate in, reputation and more. The last thing you want to do is use a shady exchange and end up losing your investment.

Keep an Eye Out For News

The price of cryptocurrency (and many other investments) is dictated by the individuals participating in the market. So if more people buy and invest, the price is only going to rise. As a result, you need to keep your eyes and ears open for things that could impact the price of a particular coin.

This can include things like hacks or security breaches, crypto bans and more. Being aware of the news will ensure you can make the most informed decisions when it comes to buying. While this news might not show up on your local news on TV, if you follow the right people on social media and visit the right sites, you should be well-equipped to know the news that could impact the price of your investments.

Diversify Your Portfolio

We have all heard the old saying “don’t put all your eggs in the same basket”. That can have meaning in various aspects of life, but especially in crypto investing. Cryptocurrency is incredibly volatile and can lose 60% of its value only days after growing by 25%. As a result, if your portfolio consists of only one asset, and it crashes, you are in deep trouble.

Instead, you should diversify it with a few different assets, to make sure you don’t lose your entire investment in one fell swoop. Which coins to choose is completely up to you, but be sure to put a lot of time into researching the coin, its performance, the team behind it, the value proposition and more.

Don’t Chase Any Breakouts

We have all experienced that feeling, which appears when we see a crypto asset growing monumentally right in front of our eyes. In such cases, every bone in our body is telling us to invest. However, these breakouts don’t usually last long and could lead you to lose money in the end. Chasing breakouts is a common mistake of beginners, and they hardly work it out well.

In addition to not chasing breakouts, you want to be sure to invest when a crypto asset is dipping. If you buy a coin at its peak, it only has one way to go — down. The way many experts think is to buy when everyone is selling, and sell when everyone is buying.

Unfortunately, sometimes it can be hard to tell whether a dip is just a small dip, or whether a larger downturn is afoot. There is always a risk in investing, so be sure to only invest what you can afford to lose.

In conclusion, we hope that this blog post has been able to help you learn what tips and tricks the experts use when trading cryptocurrency.