In mid-April this year (2021), bitcoin investors enjoyed a 116% profit as the bitcoin price jumped from $29,000 to $63,000.
To earn these massive profits, you need to become a cryptocurrency trader. However, you’re worried about going all-in without adequate information. You understand that cryptocurrencies are volatile, and if you’re not careful, you risk losing all your money.
So, what can you do to lower risks and boost your profits from cryptocurrency trading?
To help you out, here is a guide that makes becoming the best cryptocurrency trader simple.
Contents
Search for the Best Cryptocurrency Trading Platform
To increase your odds of success, you need to search for the best cryptocurrency trading platform. Yet, with so many crypto exchange platforms picking the best one may feel like an impossible task. You may feel like taking a gamble and choosing a random cryptocurrency trading platform.
The problem is that you risk choosing the wrong platform and end up losing money.
To help you beat the odds, here are key things to help you choose the best cryptocurrency trading platform:
Security
To protect your money, you must strive to find a secure cryptocurrency trading platform. That’s why you need to check whether the government regulates a given platform. Also, check how many years this platform has been active and how other people review it.
Finally, review the data encryption methods a given cryptocurrency exchange platform offers. You want to ensure that your trading account is secure and only you can access it.
Available Coins
It’s frustrating when you open an account on a given platform and find out it doesn’t support many coins. You’re therefore limited on the coins you can trade, thereby lowering the profits you earn. That’s why you need to know beforehand the available coins on a given cryptocurrency trading platform.
You want to find a platform that offers a wide selection of cryptocurrency coins for trading. So, by using this platform, it’s easy to diversify your investment by buying different coins. You want to find relatively cheap coins with a huge prospect of growth.
Ease of Use
To have fun trading cryptocurrencies, you need to invest in a powerful laptop and find an easy-to-use platform. So, get the details on the things to direct you know the ideal laptop to purchase for cryptocurrency trading. Next, look for a platform that offers convenient funds depositing options.
Also, look for a platform that offers tutorials on how to buy and sell cryptocurrencies. The idea is to make it easy and quick to learn how to trade cryptocurrencies on this platform.
Fees
Most new cryptocurrency traders tend to downplay the transactional fees and assume they don’t matter. Yet, these fees matter as they impact the profits you earn. That’s why you need to compare the fees various cryptocurrency exchange platforms charge.
Your goal is to find a platform with low transaction fees to boost your crypto trading returns.
So, to become a great cryptocurrency trader, you must strive to find the best platform to use. You want to choose a platform that shares the latest cryptocurrency market data and trends. Also, look for a secure and easy-to-use cryptocurrency exchange platform.
Pick Cryptocurrencies to Trade
With more than 4,000 cryptocurrencies, it’s impossible to invest in all of them. That’s why as a smart investor, you need to pick the top coins to trade. Here are some key things to direct you know best cryptocurrencies to buy and sell:
Price and Market Capitalization
The price is the first thing most new cryptocurrency traders check as they search for the cheapest coins. These new traders argue that they don’t have the funds to purchase high price coins such as Bitcoin. Although checking price is important, it’s also necessary you review a coin’s market capitalization.
Market capitalization is the total number of coins multiplied by unit price. However, be cautious as some coins have partially circulating coins meaning that some are reserved (not tradable). There is a high risk of price volatility with such coins when more coins hit the market in the future.
Read a Coin’s, White Paper
To discover more about a given’s coin blockchain technology, you need to read its white papers. This is a document that tells you why the coin was created and its future plans. You want to understand what gives the coin value and its growth prospects.
Also, the white paper will give you insights into how a given coin is different from other cryptocurrencies. You’re seeking information on what gives it an edge and why you should invest in it. Also, you want to get data that helps you predict the coin’s price movement to know when to sell it.
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Check Trading Volume
To determine the coins to purchase, you need to review the trading volumes for a given period. For example, check a coin’s trading volume for the past 1 day. A high trading volume is a good sign as it shows that the coin is popular and liquid.
That’s means that if you invest in this coin, you won’t struggle to sell it in the future. So, to ease tracking trading volume, strive to find the best cryptocurrency exchange platform. You want to find a platform that shares all relevant cryptocurrency market statistics, such as the trading volume.
With this data, it’s easy to find the top coins and invest in them.
Review Social Media Presence
One of the key things that makes Bitcoin so successful is its strong social media presence. Every day there are thousands of posts on Bitcoin, making it easy to access information about it. As you search for the best coins to invest in, you must review its social media presence.
You want to find a coin with an established social media community. You’ll interact with these people and get valuable information that directs cryptocurrency investment decisions. You want to know the best time to buy a given coin and when to sell it.
So, to decide the best coins to invest in, ensure you check all the above items. You want to find a stable coin to reduce risk and increase your returns.
Develop a Cryptocurrency Trading Strategy
Most people venture into cryptocurrency trading with no clear plan on what they wish to achieve. They assume they’ll wing it and hope for the best. Sadly, this is a recipe for disaster as these people end up making losses.
That’s why you need to develop a clear cryptocurrency trading strategy that guides your decisions.
Here are key elements of a good investment strategy:
Decide Topping Up Frequency
To maximize your profits, you need to keep topping up money to increase your cryptocurrency investment. You need to have a sound strategy that guides you on the periodic amount to deposit to smoothen things. For example, you can decide to be depositing 20% of your income into your cryptocurrency account.
The goal is to buy coins using these funds, which you trade and earn profits.
Review Various Cryptocurrencies Trading Options
The other key part of your strategy is determining the trading methods to use. You want to decide between manual trading versus using a crypto trading bot. Compare these different cryptocurrency trading options to pick the one that best suits your needs.
Decide the Coins to Hold and Ones to Trade
To become a great cryptocurrency trader, you must know the coins to hold for long-terms and the ones to trade. The idea is to increase both short-term and long-term returns. Understand that it takes time for most coins’ value to increase significantly.
That’s why as much as you want to make quick cash now, you must also have long-term cryptocurrency investment.
Know When to Liquidate
The final part of a sound cryptocurrency investment strategy is determining when to liquidate. You want to know the key things to guide you on when to sell a given coin. For example, you can decide to sell a coin when it hits a certain price mark.
Also, you want to know the vital market elements to help you make smart cryptocurrency trading decisions.
To make a killing through cryptocurrency trading, you need to have a sound strategy. You want to have a plan that guides your actions and helps you grow your investment.
Become the Best Cryptocurrency Trader to Boost Profits
Cryptocurrencies offer a relatively easy way for ordinary people to generate profits and build wealth. That’s why you should read carefully the above things on what it takes to become the best cryptocurrency trader. You want to know the best cryptocurrency trading platforms to use.
Also, you need to know the key things to direct you to know the best cryptocurrency coins to invest in. Finally, you need to develop a sound strategy to direct your cryptocurrency trading activities.
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