Diversify your investment portfolio
You could also diversify your investment portfolio by using cryptocurrency as a tiny portion of it. The cryptocurrency market is highly volatile like other shares in the market. If you're looking to put money into cryptocurrency it's ideal to invest it in small portions of a more diverse portfolio. Get more information about Blockchain Investing
Diversification is achieved by incorporating other investment classes like real estate and commodities into your portfolio alongside cryptocurrency.
The principal idea is that if you spread your risk to invest there is a greater chance to improve the overall value of your investment while minimizing possible losses.
Know the technology and the potential of it.
Understanding the technology behind crypto is no longer an option if you're considering entering the crypto space. If you're not interested in studying the tech and simply want to earn money, you're fine! There are many ways to put your time and cash into this new asset class without understanding the ins and the outs. If you'd like to have an understanding of the way cryptocurrencies work, read on!
Instead of writing a novel (or even a lengthy blog article) Let's take a quick look at the reasons why cryptocurrencies are so effective.
First off: trust. Trust is the foundation of any relationship between two people business or organizations. But what happens when trust is breached? What should you do if you trust someone only to discover that they've taken advantage of your trust? As we'll discover later, trust isn't easy to restore once it's damaged. Banks take years to rebuild their reputations following scandals such as The Great Recession or Wells Fargo's accounts that were opened without authorization.
In contrast: cryptography ensures that transactions in cryptocurrency are secure in their reliability, and are irrevocable. With cryptography comes proof rather than trust--proofs that something took place at a particular time or it happened in a particular manner (such as "Bob paid X amount of dollars in exchange for Alice").
Trade is based on logic and not on emotion
Trading cryptocurrency for money is no walk in the park, but if you're looking for a more straightforward approach take a moment to think about this minute: If, for instance, you purchased $10K worth of Bitcoin at $20, and then later sold it for $800, you'd earn 40x your initial investment. This is a boost of more than 3,900% but not enough to be included on our list. In fact, that type of growth is actually quite low when compared to the altcoins on our list. The primary takeaway from this list is that there's a lot of money to be made from cryptocurrencies If you take the right advice.
The process of making money trading cryptocurrency involves following a few basic rules like being patient, conducting one's own investigation (DYOR) and not getting caught up in emotions and being objective regarding your trading decisions.
Make use of stop-loss orders
Stop-loss options are a great way to minimize loss if the price fluctuates against your position. The most common type of stop-loss is the price order which closes your account when the asset hits a certain price. This can limit your loss if the asset goes against your position in a volatile market.
Stop-loss transactions aren't always executed at the level that you stipulate, especially in extreme volatility markets or abrupt price changes. Stop-loss orders are frequently employed by day traders to restrict their risk in every trade.
Don't follow returns. Avoid FOMO (Fear of Missing Out).
It's important to avoid other frequent mistakes, too. Do not chase returns, that is do not get in a rush to buy a coin that's appreciated quickly and buy it before doing your homework. Beware of FOMO (Fear of missing out) when the price of a coin rises instead, ride the wave when you're confident in your research.
While you should always listen to experts on crypto investment, no one knows everything. Be wary of anyone who seems overconfident and consult a range of people and sources , rather than blindly following every recommendations or analyses.
Make sure you're making choices based on factual research, not emotion. It can be easy to get caught up in the hype surrounding certain coins. If something seems too good to be true or makes dramatic promises make sure you research before you invest your hard-earned money.
Know when to keep your hands on and when to sell
The general rule is:
If you're earning money it's time to sell.
If you're losing money it's time to cut your losses.
If you're not making either a loss or profit, it's the right time to put your money in reserve.
If you're considering to invest or trade in cryptocurrency, make certain to keep these points in your mind.
If you're considering to trade or invest in crypto, be aware of these guidelines:
The cryptocurrency market is risky. It should be considered a small percentage of your investment portfolio.
The market is highly volatile. Expect significant highs and lows, so don't invest what you cannot lose.
Do not invest if you do not know the basics of technology. Crypto is a complex subject, and it's not the right choice for everyone.