Trading with cryptos will have its good days and its bad days. Some days you may be trading for 9 hours and smiling from ear to ear as the profits keep coming. Other days may be slow, depending on what Bitcoin is doing at that stage. Bitmart’s Senior Trade Analyst Rudner de Witt talks crypto trading and gives the 10 best tips for trading with cryptos.
10 Best tips for trading with cryptos:
1. Invest as much as you are willing to lose
“Never put more money into cryptos than you are willing to lose. This way you will always win,” says Rudner. He advises investors not to get a loan or max out their credit cards to buy cryptos if they are not sure that they can service these loans. “The crypto industry is extremely volatile. It is true that you can make a lot of money very quickly but you can also lose it very quickly.” Make sure all your financial obligations are met before you invest money into cryptos.
2. Don’t put all your capital into one trade
The saying goes that one must not put all your baskets in one basket. Reason being that if something should happen to the basket, you forfeit all your eggs. The same applies to cryptocurrencies. Putting all your capital into one trade is very risky since the market is so volatile. “Diversify to protect your investment,” says Rudner.
3. Activate 2FA
Hackers who empty wallets is no fairy tale. “It can happen if you do not take the necessary steps to ensure the safety of your valuable cryptos. One of the best ways to prevent hackers from getting their hands on your cryptos, is by activating the Two-Factor Authenticator (2FA) on the exchanges and wallets you hold cryptos on,” says Rudner. This is a simple setting that doesn’t take up a lot of time. In most cases, it can be activated by clicking on the Settings button and activating 2FA. You can download the free app from Playstore onto your mobile device. Every time you want to log into your account, you have to give the one-time 2FA code. This is a great way to ensure that hackers can’t access your accounts.
Read more about 2FA in the Bitmart block “2FA – Absolute must or nice to have?” Click here.
4. Have one dedicated trading device
Rudner strongly advises crypto traders to have a dedicated PC/laptop/tablet that they use to trade or access accounts. “Some people have torrents on their devices that they also use to trade with. This is dangerous!” says Rudner. Rather have one device that is safe and secure.
5. Never buy during all-time highs
Fear Of Missing Out (FOMO) is a real problem for a lot of traders. When they FOMO, they tend to buy a coin when it is at its all-time high. “This is risky since the coin may start to draw back and you would have lost. Rather wait for the opportune moment to enter or re-enter a trade. Remember, there will always be other trades,” says Rudner.
6. Don’t sell at a loss
This is the other side of FOMO. Some may buy a coin when it is at its all-time high and others may sell a coin when it sees the price starting to fall. “If you know how to do market analysis, you will be able to see in which direction a coin will go. This will go a long way in determining whether it is the ideal opportunity to sell or to buy. The golden rule is to never sell at a loss. Rather wait a while for the price to go up again,” says Rudner.
This stands for Do Your Own Research. “Don’t buy a coin because some guy said so. Find out what the project is all about and if it is worth investing. It is important to do your own research first and not to follow another blindly,” says Rudner. Investors may urge others to buy or sell a specific coin so that they themselves can benefit from it. Ask yourself why you should invest in a specific coin?
8. Bookmark the exchanges you trade on
Fake exchange websites are at the order of the day. “Don’t get fooled by a fake url address. If you log on to the fake site, hackers may be able to get their hands on your login details and gain access to your account,” says Rudner. It is advisable to bookmark the exchanges you are working on in your browser. Majority of exchanges warn users and ask them to ensure that the url has ‘https’ in front of the address. This way you know that you are using the real McCoy.
9. Always stick to your base currency – BTC
Bitcoin is the golden standard by which all other coins are measured with. Bitcoin is king! For this reason, it is advisable to stick to BTC as your base currency. BTC is the most stable coin with guaranteed profits. Ethereum, on the other hand, is number two on the list of cryptos and is not as stable. So if the price of BTC should increase, so will your BTC holdings.
10. Decide if you want to be a day trader or hodler
Some investors may want to be day traders whilst others are more interested in investing in a long-term coin (6 – 9 months). If you opt for the latter, you may fall under the hodler category. This is no spelling mistake. Hodler stands for “holding on for dear life.” The two types of trading require different time and schedules. Both have pros and cons. Either way, you will make money by investing in the right project. The choice is up to you.
Bitmart offers a subscription Bitmart Trade Signals Group that sends daily trades to your phone. These trades are carefully researched and put together by Rudner and his team of expert crypto traders. For more info, click here.