Crypto is one of the most popular investments that people are looking at today. It is one of the investments that can offer you great rewards if you invest the right way. Before you move to invest in crypto, you need to learn a few steps on how.
These steps are the ones that will lead you to make the right moves when you are trading. Trading is the way that people make money in the crypto field. And if you wish to make any, you will need to learn a few steps about trading.
When trading, you will not only be trading for the sake of it; you need to do it smartly. This is especially the case when you are dealing in bitcoins. Below is a step-by-step guide on how you can smartly trade bitcoins.
Before you allocate investment, you need first to understand it. You will be trying to understand that here is market class – you can’t go in blindly. One of the things you must get is that the crypto market is quite volatile.
When you see the term volatile, think risk – you only need to allocate a small percentage of your portfolio to it. Being prudent is highly recommended here as it is a risky investment. You need to keep your investment here at 5% or 10%, at most – of your portfolio.
Many people look at investing in crypto as they would the stock market – they look the same but aren’t the same. Your investment here can be pushed all the way to zero with poor decisions. Yes, you can put in money here and lose it all with a wrong move.
Choose the Crypto
Now to the most significant decision you are about to make with crypto; choosing the suitable currency/currencies to get in on. If you are all green and new, you need to understand more cryptocurrencies than Bitcoin, Dogecoin, and Ethereum.
There are over 5300 currencies available in the market – and that’s a vast pool to choose from. Deciding on which one to go for gets even more complex when you think of that. Most of the new investors will look at Bitcoin as it is the most known.
You will need to do some market research before you can settle, though. Several other coins have performed better than bitcoins over the years. Look at the market cap of the coins before you invest, also forget about choosing the cheap coins in the market.
Understand the Crypto
You need to understand the crypto you have chosen, or you won’t make anything out of it. Think of it like any other investment you would make – like in the stock market. You first need to try and understand the stock; the same applies when you are investing in crypto.
When you want to understand the one you have chosen, you must know what they are backed by. For example, different coins are supported by accessibility, blockchain tech, community addressed, intrinsic value, and mining techniques.
While you watch these aspects of coins, you also need to look at what the experts are talking about. Most of the experts have been at it for far too long and know how to move around. But don’t take only their word for it, do the work yourself and research.
Choose A Platform
When you are investing in other trades, banks or brokerage firms are the way to go. The same doesn’t apply when it comes to cryptocurrency. Crypto can only be bought from cryptocurrency exchanges – and they come at a fee.
Also Read: 5 Bitcoin Investing Tips You Need to Know
When you use these exchanges, you pay a fee for both buying and selling of currencies. You can only buy currency in one of two ways, buy from the exchange directly or buy from a peer selling their own. Note: If you tried algorithmic trading, it would be wholly anonymous. You won’t know who is on the other side of the trade.
Store Your Coin
It would help if you stored your currencies in a wallet – hot or cold. Cold are the wallets that aren’t connected to the internet, and hot ones are connected to the internet. A crypto wallet is a software designed to store your cryptocurrencies; it isn’t physical.
When you have a wallet, it will store the public and private keys, which connect you to a blockchain where the currency exists. You have a wide array of options when looking for crypto wallets – mobile wallets, hardware wallets, desktop wallets, and online wallets.
Secure Your Wallet
You need to ensure that your wallet is secure if you don’t want any mishaps. This is particularly the case when you are using a hot wallet to buy things online. Most of the adept users tend to use VPN for most of their online transactions.
VPN is encrypted, and no one can see any of your online transactions – it adds an extra layer of protection. All the transactions you make will be entirely anonymous, and that makes it harder to hack your accounts. You should be safe even if you hold lots of cryptocurrencies in your wallet.
Smart Trading in Bitcoins
If you are to book profits, you need to know when to sell and hold your hand. When you are trading in bitcoins and want to do it smartly, below is how to about it:
- Overlay the bitcoin chart with Ethereum chart and the OVB indicator
- Diversify smartly between Bitcoin price and Ethereum
- Look for OVB to increase in the trend
- Place a buy limit order
- Place your SL below the breakout candle – you can then take the profit when OBV gets to 105,000
Don’t assume that the bot will do all the work for you. If you try algorithmic trading, you will find it much easier to set the above steps in motion. These smart moves will ensure you make enough out of your bitcoin trades.
When you want to trade bitcoins smartly, these are some of the best ways you can use to ensure that you get an edge. You have a laid-out plan from when you start trading to how you can implement the best strategy for your bitcoins.