It’s been over 12 months since Bitcoin hopefully witnessed its bottom after a dramatic 2018 crash when it had lost over 80% of its All-Time-High value of 20 000 USD in December 2017. We have seen some ups and downs in those 13 months, some organically, some not. Still, the overall consensus and anticipation of the next Bitcoin halving in May 2020 is driving a more positive sentiment into the crypto industry now.
You might probably wonder whether it is an excellent time to start your investment in the newest and most-promising financial sector now. Many arguments back it up based on both technical and Fundamental Analysis. So, what should you do and what should you avoid if you want to invest in crypto? Let’s find out! Here are the TOP 10 Expert Tips for crypto investors!
10. Invest what you can afford to lose.
The crypto investment game is very volatile and can be risky. Remember that you are always at risk of losing money due to some speculation on the markets.Do not take loans to invest etc. – invest money only if you can get over a potential loss. Otherwise, it will create an emotional bond to your investment, which is always bad for you, because you will make inferior decisions.
9. Decide whether you want to accumulate value in Dollars or Bitcoin.
Dollar value and Bitcoin value are two completely different things. If you are a day trader/short term trader, then you should stick to Bitcoin value all the time. However, if you plan your investment mid-long term, then accumulating in USD is perfectly fine.
8. Crypto Trading is not secure, so crypto traders use Algo trading.
Trading and investing is a very tricky and challenging game. The cryptocurrency market and Bitcoin are highly manipulative and volatile. If you feel insecure and your experience is not reliable, you should consider crypto trading via Algo trading. This is automated trading based on indicators and algorithms that can be not only safe but also quite profitable in the crypto market. It applied both to Bitcoin and altcoins.
7. Create your own strategy and have a goal.
You need to roughly estimate what profits you assume would be right for you. Set your goal (for example, 3x profits) and then move to another coin with your newly accumulated gains. It applies to day trading/short term trading mostly. If you are a long term trader, sell some portion of your coin after reaching your target (like 50%) and hold the rest for longer. This is recommended to all crypto traders.
6. Diversify your portfolio
Do not keep all eggs in one basket. Diversification is the key to your success as it is a very stable ground for gains and losses. Keeping from 5 to 10 coins is the best option. Some of your coins should really be Bitcoin and/or Ethereum, as they are the basic ones right now. Also, when you wonder which crypto has the most potential, use some of 4C’s insight into fundamental Analysis.
5. Keep your eye on Bitcoin. Always.
Why would you do that? First of all, because you should stick to Satoshi value. Second, Bitcoin affects Altcoins. If Bitcoin goes on a crazy bull run, altcoins take a beating (people selling Altcoins to buy Bitcoin and Bitcoin value is also changing). When Bitcoin drops rapidly, Altcoins also get slaughtered (people are FUDing and sell all, including Altcoins). However, when Bitcoin is consolidating, altcoins usually grow significantly in value. So, never panic sell.
However, you should watch the markets to observe some new patterns as the situation is volatile, and sometimes growing Bitcoin can drag altcoins with it as well.
4. Do not be impatient, and do not be too greedy.
Newcomers to crypto trading are too impatient to wait 1-2 years to accumulate the fruit of their labor. They want to become rich in 1-2 months. Therefore, they panic sell when their coins are down or invest too much in one cryptocurrency. Always diversify and invest smaller amounts in hedging yourself against losses. Also, do not contemplate on your missed opportunities – there will be new ones ahead soon! And if you are looking for the best crypto to invest in 2020, head to 4C’s Confidential Report community.
3. Always take supply and volume into consideration.
If the coin price is low (a few satoshis/cents), it doesn’t mean it’s an excellent opportunity to invest. Always look at the supply juxtaposed with the price. The market cap = supply x coin price. It is usually more probable for a cryptocurrency with a low market cap (for example, 300 mln) and a higher price (for example, 300 USD) to go 10x than to reach the same profits for a coin that costs 0.1 USD but has a high capitalization. Still, its market cap is already 10 bln USD.
Mind you, coins with small volume can spring a trap on you. Always use exchanges and coins with relatively more significant volumes, or you will be holding bags in no time.
However, if crypto traders are under FOMO and cryptocurrencies go mainstream, this situation can change as many new crypto traders will buy coins with smaller prices (below 1 USD), thinking it’s a good deal, completely
ignoring market cap. They are newbies after all, aren’t they?
2. Technical Analysis is functional, but it’s not the oracle.
Technical Analysis is constructive in day trading, but it won’t help when some news is coming (wrong or right). The prices will not stick to your TA when something big is in the air. Always check social media of the projects, follow the devs, read the roadmaps. Stay frosty all the time and watch over your investment!
1 Always take care of your security and do not store your coins in exchanges, if possible.
Remember Mt. Gox? One day, 85 000 Bitcoin were stolen in a day as the exchange got hacked. So, security is critically important. Hacks happen. Thankfully, if you follow best practices, which can be easily found on dozens of respected sites, you will be OK. But let’s face it, it’s a little scary to know that you are responsible for your own coins if you choose to keep them yourself.
Over time, as custody solutions mature, more prominent institutions and more retail crypto investors add this emerging asset to their portfolios, the volatility and danger of holding crypto will lessen. But ultimately, crypto might still be too much for you, and every reader will have to figure it out for him or herself.
Also, always download specific wallets for your coins or store them in hardware wallets (Trezor, Ledger Nano S, Keepkey). Obviously, if you are a day trader, this applies to you less, as you will need those coins to circulate.
Write down your passwords, seeds to your wallets in different places, and keep them safe. The same goes for your private keys – if you don’t own them, you don’t own the coins. Keep your coins in paper wallets, hardware wallets. Always use 2FA everywhere and use an offline device for it.
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