Once you’ve taken the plunge and bought your first cryptocurrency, how do you decide what to do with it?
If you’re just getting started in the world of crypto trading, there are plenty of things to think about.
This article will walk you through all the essential tips you need to know when trading cryptocurrencies, so read on if you want to make the most of your currency buys.
Do you know how to spot a crypto scam?
Scams come in many shapes and sizes, but a lot of them are just really bad investments. Before you make a decision to invest, check out these tips for spotting crypto scams.
If it sounds too good to be true, it probably is-but that doesn’t mean every crypto investment is doomed.
Educate yourself on how to spot scams and steer clear of them (and their pitfalls) before they get their hooks into you. Bad ICOs can damage your portfolio; stay away from them.
Do you know how to trade?
The first rule to trading cryptocurrency is never to invest more than you can afford to lose. If you’re serious about trading crypto, then you need to learn about charts and how they work.
No one said it was easy, but there are certain things that can make your job easier. Investing in Crypto is risky-but if your plan is well-constructed and you understand what you’re doing, it’s possible to make a lot of money.
To get started with XRP trading, you must be patient and intelligent.
Use risk-reward and stop-loss rules
Your risk-reward ratio is a tool you can use to keep yourself in check, especially when you feel like you can’t lose.
It tells you what your potential loss could be if a trade moves against you and compares that number to how much profit it could make.
So, for example, if a stock has a 1:3 risk-reward ratio, that means that if it falls in value by 20% (which would bring your gain down to zero), but rises by 30%, then it was a good idea to buy that stock.
A stop-loss rule is something else together. This is an order you place with your broker telling them to sell a stock once it hits a certain price.
This protects you from losing too much money on a bad investment. If crypto trading were easy, everyone would do it-but because of its volatility, people often lose money quickly before they know what happened.
If you want to avoid becoming one of those people, take these tips into consideration before making any trades.
Check out your trade’s impact
Cryptocurrency, by its very nature, is a highly speculative investment. Before committing to buy a specific coin for your portfolio, take some time to evaluate how that cryptocurrency will react in different market conditions.
Learn about leverage, margin, and call options
Don’t take out a loan to buy coins. Cryptocurrencies use futures contracts that are cash-settled, meaning they are not bought or sold by you and never touch your account.
Contracts for difference (CFDs) work similarly to futures in that there is a contract agreement between two parties for the future value of an asset at a set price when it expires.
The key difference is unlike futures, CFDs have expiration dates-think of them as built-in options.
Start trading cryptos in three steps
- Purchase Coin.
- Transfer it to an exchange that supports your chosen cryptos, like Poloniex.
- Trade coins for alt-coins by buying low and selling high at a profit.
Where can I buy XRP? You can buy it at big marketplaces where it is listed for trading.
Before you begin investing in Crypto, there are some things that you should know. Crypto markets are relatively new, and volatility can be unpredictable.
There will always be a risk when using any trading platform, but proper risk management techniques can increase your chances of profit.
Always remember never to invest more than you can afford to lose, and never trade with money that you can’t afford to lose.
If you have these three tips in mind when trading cryptocurrency, we believe anyone looking into trading crypto should give it a shot.
You might end up finding out that it isn’t as hard as everyone makes it out to be. Happy Trades.
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