Of course you, as many others out there, are excited to trade cryptos. And sure, that’s a market to be excited about! After all, who hasn’t heard the stories of those who made millions by investing $1,000 in Bitcoin? Could you be the next one? As exciting as this might be, the chances of the same results happening again aren’t very high.
A good share of people were, indeed, able to capitalize on the Bitcoin story in the very beginning, with little to no effort. These times are well behind us now, and trading crypto is like trading any other asset class: it requires knowledge and training. So here are a few tips and tricks to help you get started.
Adapt to the fast pace of the markets
Those who say the stock market changes rapidly, certainly never compared it to the crypto one. The events taking place in one day in the cryptos market sometimes don’t occur for weeks in the stock exchange. Logically, this may provide trade opportunities that lead to profits, as well as losses.
Don’t fall for the lowest price
One of the key appeals of crypto-coins isn’t their price – it’s their market cap. In other words, a coin may be worth very little, but it doesn’t necessarily make it an awesome buy opportunity. For instance, Ripple is cheaper than Ethereum. But it doesn’t necessarily translate into Ripple being a better investment choice.
The Cryptos market cap is calculated exactly the same way, like that of a usual stock. In other words, Market Cap = Current Market Price X Total number of outstanding shares (i.e. issued shares, owned by stockholders).
Stay cautious with Altcoins
Altcoins are alternative-to-Bitcoin cryptocurrencies. Every digital coin, excluding Bitcoin, is known as an Altcoin.
In order to stay on the safe side, we recommend our traders to do business with crypto-coins that have legitimate trading volumes, and are present on international exchanges. Some of the most well known crypto-coins at the moment are Ethereum, Ripple or Dash.
Evaluate the situation closely when going for coins with low daily trading volumes, as well as those you’re not familiar with. Remember, sometimes these coins can lose value and die in a matter of minutes.
Watch your risk management
Cryptos volatility, which makes it such an appealing asset group, can in turn, result in serious loss. We always advise traders to take proper care of their risk management practices, but in such a volatile market as cryptocurrencies – this even more so holds.
Risk Warning: CFDs are complex instruments that come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts, lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.