Cryptocurrencies are a fairly new class of investment, so there is limited data for fundamental analysis or past performance
Enjoy your safe and sound trading
Stick with the most popular and most liquid crypto in the world
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As mentioned above, crypto currency is very volatile, so never put in a large amount of money into Bitcoin or any other crypto if you are inexperienced as a trader. If you have $1000 to invest, rather start with $200. If the price is moving in the right direction, add another $200. Keep adding gradually while watching the movement till you have reached the desired position.
Routinely take profits. If you are making some gains in value, sell some or all of your currency. Resist the urge to be greedy. Ignore the fear of missing out or else you will wake up with a loss.
You have probably heard of people who made millions trading Bitcoin, but have you heard of the many people who lost all or most of their money? In truth, trading crypto is like playing the lottery in which a few people win and the rest lose. That is why you should aim for small profits in the beginning.
Going on margin means borrowing money from the brokerage (Kullion Exchange) to increase the amount that you can buy. Be wise and manage your risk. What we mean is: avoid borrowing money to buy crypto. Why? Going on margin is a double-edged sword: if you are right, you make huge profits, but if you are wrong, you lose and owe possibly more than you invested.
Cryptos move quickly, therefore “hard” stop losses can be ineffective. We advise beginners to use “mental” stops and to be disciplined enough to obey them. Alternatively, use a “time stop” i.e., decide on which day you will sell the position. This way you force yourself to lock in winners and cut losers.
If your trade is going against you, sell all or part of your investment so that any small losers do not grow into large ones.
It is true that at one time people who sold bitcoin at $20,000 were shocked when it rose towards $60,000. So, have a trading plan that helps you to decide when to buy or sell. Follow your plan and obey your rules.
Technical analysis gives you clues when to enter or exit a position. If you are a beginner, the best two indicators are Relative Strength Indicator (RSI) and moving averages. These two indicators are easy to understand and they give good signals.
The old adage “never put all your eggs in one basket” is applicable in cryptocurrency trading. Never put all your money into one financial product. Diversify. One way is to buy both crypto and non-crypto investments. If you can’t spread your money, make small purchases till you gain more knowledge and experience.
If a simulated or paper money account is available, practice with it before trading with real money. If you don’t have such a facility, trade small to gain experience.
