The first acquaintance with the cryptocurrency market can turn out to be a loss of money for beginners since digital currencies are a highly volatile asset. In order for novice investor to secure their investments from losses, you need to strictly follow certain rules, writes Apoorv Gupta.
Apoorv gives tips to newbies to help them get the most out of the crypto market and reduce the number of failed trades.
Don’t search for little-known tokens
The search for small cryptocurrencies in terms of capitalization for the purpose of investments that can “shoot” is a very difficult task, associated with high risks, says Denis Voskvitsov, head of the fintech company Exantech. This approach requires a deep dive into the industry, he said. Therefore, the expert does not recommend doing this for novice investors. Denis Voskvitsov advises beginners to focus on a few of the top 10 tokens in terms of capitalization, which can bring good profits in the long term.
Don’t use the leverage
At first glance, it may seem that margin trading is created for beginners, but it is worth remembering that leverage is someone else’s money and other people’s assets, explained Maria Stankevich, Development Director of EXMO Exchange. According to her, leverage, if used correctly, allows you to achieve greater profitability, however, beginners often trade haphazardly and unprofessionally, which is inadmissible with this approach.
Develop your own trading strategy
When buying and selling an asset, you must have a carefully prescribed mechanism for performing your actions, said Rishabh, CMO of the Graphlinq. He argues that in the modern exchange world, robots account for the largest earnings since they strictly follow the rules and are not subject to psychological fluctuations.
“Bots are not affected by the element of psychology that live traders always experience. Psychology is an important factor that often interferes with earning, ”the expert added.
Close the deal on time
In the cryptocurrency market, situations often occur when assets are growing rapidly and signs of excitement appear, says Saurabh Singla Co-founder at CAPHIQ. In this situation, it is worth remembering that rapid growth can turn into massive sales, he warned. According to him, at such moments it is easy to lose vigilance and succumb to euphoria.
“The market often punished those who did not have time to jump out of the hype in time,” said Denis Voskvitsov.
The more information a trader has about an asset, the more harmonious his trading, I believe. I advise combining technical analysis with fundamentals in order to have an idea of what is happening with the asset. There are situations when a coin falls in price or stands still and a trader loses interest in it, but there is important news or a project update ahead that can affect the price, the expert explained.
PS. Apoorv Gupta (Co-Founder of CAPHIQ and CMO at AMEPAY) is the source of this content. This content is for informational purposes only. The information does not constitute investment advice or an offer to invest.