Are you a beginner just looking to get into the world of cryptocurrency? If so, you know how confusing the process can be to navigate. With more than 1,500 cryptocurrencies currently in existence, it’s virtually impossible to know where to start or what to focus on in your trading strategy.
Luckily, we’re here to help you out of that puzzle.
Follow these tips to improve your cryptocurrency investing and trading strategies and build your portfolio:
Why You Need a Plan
If you’ve spent any time in the crypto market, you probably understand that having a plan is essential. Why? Simple: while some crypto wins come down to luck, more of it is based on fundamental practices, good habits, and growing experience.
When you look around at the majority of the crypto investors out there, you’ll find that people who trade daily and grow their portfolios rapidly don’t do it randomly. Instead, they follow a series of strategies and approaches that tip the scales of the crypto market in their favor.
Although it’s true that the crypto market is volatile enough that nothing can truly “predict” it, failing to follow a strategy is simply reckless and not advised within the investing and trading community.
4 Strategies for Crypto Trading
If you’re going to start trading or investing in the crypto market, follow these tips:
- Start With Bitcoin
Bitcoin is the current “gold standard” in the crypto industry. Because of this, most altcoins follow the rise and fall of Bitcoin quite closely. This means that you can gauge the general temperature of the crypto market by keeping a close eye on Bitcoin.
If Bitcoin prices leap, altcoin prices can go down as people scramble to get in on the Bitcoin profits. If you’re looking to create altcoin growth, investing when Bitcoin is growing organically or declining is wise.
Diversification is key when it comes to cryptocurrency. While you boost your earning potential by investing more in a single coin, you also increase your risk exponentially. With this in mind, consider branching outside the standard cryptocurrencies and investing in other coins.
Here’s an example of how that can play out: In the two years between January 2016 and January 2018, Bitcoin jumped 34x while Corgicoin increased 60,000x. While investing in Bitcoin would not have been a bad decision, branching out to other currencies could have earned you larger rewards.
- Don’t Invest Without Intention
In some ways, the crypto boom has created a new gold rush. Lots of investors, desperate to make a profit, have flocked to the scene thinking they can make a quick buck.
Unfortunately, crypto is also much riskier than many other types of investments. As such, putting money into it blindly can pack some serious consequences. With this in mind, be sure that you’re speaking with professional investors and taking a strategic approach before you go dumping your life savings into Bitcoin.
- Categorize Investments
Coins come in different categories and it’s important to pay attention to that. Some coins are stronger than others and deserve medium or long-term holds, while others can be ideal for a short sale turnaround. Be sure to arrange your coins accordingly and keep things in your long-term portfolio untouched for a set period of time.
Better Crypto Trading Starts Here
While the crypto market can be difficult to break into, these four tips can help you develop your strategy and keep your head above water for the long run. If you’re interested in learning more about creating your own cryptocurrency trading strategy, shoot us a message.