Although crypto has already proven to be an effective investment and trading tool, many beginners quit before they can even open their first order. There are several reasons for that: first, trading setups on the crypto exchanges can be complex for a novice investor. Second, there is so much inconsistent and misleading information about crypto that confuse beginners.
But don’t get discouraged just yet — we have prepared a list of top tips for traders, as well as instructions on opening your first order.
Brace yourself for volatility
Crypto can generate high returns, but those potential profits come with a cost — volatility. Asset prices can change in a matter of minutes, so you need to be prepared for inevitable losses.
We strongly advise against investing all your life savings in hopes of making quick money on crypto. Start with a small deposit of $100, get some experience and build on that.
Invest in education
Successful trading isn’t based on luck but on financial skills and knowledge. If you want to effectively invest in crypto, consider investing in your education first.
While top market cap coins such as Bitcoin and Ethereum are a “safe” way to get into crypto, do not keep all your eggs in one basket. Consider investing in different asset classes to manage risks.
Ensure funds security
Learn how to safely store your crypto before investing — educate yourself on the difference between cold and hot wallets, private and public keys, etc.
- Find a trustworthy crypto resource
- Keep a cool head
Even the top traders sometimes lose money on bad deals. Do not succumb to FOMO or greed and maintain a systematic approach.
- Think long-term
Crypto is not a shortcut to the rich town, even if somebody told you otherwise. Identify your personal goals and think of investing as a marathon rather than a sprint.
Fun fact: Kodak intends to launch its crypto to ensure photographers are adequately paid.
How to open your first trade: step-by-step instructions
Once you have learned the basics of crypto trading and understood the importance of self-control and risk management, it’s time to create the first order.
Step 2: Choose a coin to buy. Experts usually recommend beginning a trading journey with spot markets and small positions. Nevertheless, the coin choice will mostly depend on your personal goals.
In case you are wondering how to choose a perfect time to buy an asset — stop. Instead of looking for “the right moment,” create a flexible trading strategy and gradually improve it based on the performance results.
Step 3: Select the order type. Modern exchanges provide various trading tools that can simplify your user experience. The most popular order types include market, stop and limit. We recommend sticking with the last two as they offer better risk management.
As for the final step, closing the trade, we will take a detailed look at it in our next post. Stay tuned for more educational crypto content!