Essential Features of Crypto Trading
Be prepared for the fact that someday you will buy an overvalued alt-coin on highs, and then you will wait for months until its price approaches the previous levels in order to at least break even. The same bitcoin is not growing indefinitely, and quite deep drawdowns happen. For example, immediately after the collapse of Mt. Gox first cryptocurrency went into a protracted correction, which stayed for about two years. However, with Trustedbrokerz now you can have the best support.
You can see how soon after reaching values above $ 1000, the price began to plummet. Then, after a complete stop of trading in February 2014, the fall in prices accelerated even more. The recession lasted about two years a confident recovery began in 2016.
Those who turned out to be more patient and stronger in the spirit of the others received a good profit in 2017, which was extremely successful for cryptocurrencies. Those who sold bitcoins at the end of last year at $ 19,000, and then bought them at $ 6,000 a few months later, were most likely satisfied with the results of their investment activities. So, at the time of writing, Bitcoin is trading above $ 8,000. Similar situations occurred with the digital silver Litecoin cryptocurrency and other assets. Trade real money, books, training courses, and seminars will do little good without practice.
Do not store eggs in one basket
This simple, effective and at the same time fundamental principle of risk management is called diversification. The distribution of risks through the use of various assets, wallets and trading floors stabilizes the profitability of the cryptocurrency portfolio and protects against the loss of everything at once.
So, you should not go in cycles in any one super fashionable crypto exchange. Each of them has its own advantages and disadvantages, as well as its own set of coins in the listing. For example, Poloniex has a simple, intuitive interface and a rather rich range of altcoins. In Bitfinex more advanced analytics, graphs of TradingView, but the interaction with this exchange may cause problems for beginners.
Also, one should not go in cycles in any one digital currency, no matter what growth dynamics it demonstrates. Do not forget: diversification not only reduces risks but also can increase the return on investment.
Buy cheaper and sell more
When people come to the ordinary food market, they try to buy vegetables of acceptable quality at a relatively cheap price. The bulk of people do not buy the most expensive products on the market, not paying attention to their freshness and quality.
Once on the exchange, many newcomers to trading do the opposite. At the sight of a graph of a rapidly growing asset, many are trying to hop onto the last car of the departing train, no matter what it costs them. However, they often do not even think about the fact that after growth there is always a decline and vice versa. In most cases, after buying on highs the novice trader will be disappointed the price starts to drop sharply. Rapid growth is fraught with a strong fall in the price of an asset.