5 Tips to Crypto Trading

In the past, earning an extra income was possible for investors who simply bought and held cryptocurrencies. The strategy of purchasing virtual coins at cheap prices and selling them months or years later at a higher price is, unfortunately, not as easy today as it was before. With the addition of more coins in the marketplace, the entry of institutional funds from stock exchanges, and the emergence of futures and other types of contracts, earning from cryptocurrencies is becoming an art that is almost exclusive for skilled traders.

The cryptocurrency market is characterized as a highly volatile one. To provide you a picture, the total capitalization of the entire cryptocurrency market has increased by roughly twenty times from January to December of last year and has lost by more than sixty percent in value from the all-time high in December up to the beginning of February this year. Its high volatility has opened up opportunities for traders to get high rewards and to acquire huge losses as well. As a beginner, cryptocurrency trading may sound a bit intimidating. But in reality, anyone can earn from crypto trading; with the right discipline and the basic knowledge of managing risks and setting targets. Read more about the five tips to cryptocurrency trading and start getting additional income without leaving your home.

  1. Stay updated on the news.

The movement of the cryptocurrency market is largely driven by the developments surrounding the cryptocurrency space. For example, news about governments implementing strict regulations on cryptocurrencies can drive the price down, while companies opening their doors to cryptocurrencies and huge personalities promoting the use of crypto can help increase the price. While you should always be updated with the news, it is important for you to avoid making hasty decisions.

  1. Do not FOMO.

FOMO is a widely understood term in the cryptocurrency space which is abbreviated from a phrase, “fear of missing out”. This happens when the price of a specific coin suddenly shoots up and people immediately come in to join the hype. What usually happens is that the coin holders who bought them at cheaper prices will start selling, causing a reverse in the momentum, and leaving people who did FOMO at loss. Avoid buying at the climax of the hype, set your entry points properly, and do not panic sell.

  1. Set a tight stop-loss order.

Technical analysis is one of the essential skills that must be learned by every trader. People may use different market indicators and interpret the trends and patterns with bias. But what you should always take note of is to set up a tight stop-loss order. Cut losses immediately and, similarly, set a reasonable target. It doesn’t matter whether you earn 2 or 20 percent in a single trade because that will eventually add up if you follow your targets and stops with discipline.

  1. Know the coins that you are trading.

For years, Bitcoin has proven itself as the most dominant cryptocurrency in the world. Altcoins or alternative coins are different. Some of them has overtaken Bitcoin in terms of growth while most of them constantly lose value over time. Do not buy coins or tokens from ICOs without doing any research. Avoid putting all eggs in one basket and remember to always manage your risks.

  1. Use trading software.

With the cryptocurrency market running 24/7, the need for trading software arises. Aside from placing orders in a split of a second and at any time of the day, using trading software also eliminate the factor of human emotions that can result in a big loss. There are different smart trading applications online that you can use to improve your trading performance. One of the swiss army knives of cryptocurrency trading today is the Crypto CFD Trader – a highly efficient trading program specifically designed by economic experts to generate favorable results in contract-for-difference trades. Check it out now and see for yourself.