Coming across something new can be exciting that you forget the importance of preparation and education before delving into it. If you get a piece of information that running a particular business is very profitable from someone who has been doing it for over 5 years, what will be your first reaction? Of course, you will not just get into the business because of the tales of profitability but will carry out some due diligence to prepare yourself for what you might encounter in the business.
The processes to take as regards starting a business are no different from that to take before starting trading in any financial market. Infact, the preparation processes before delving into trading in the financial markets are very important. In this article, we will focus on trading in the cryptocurrency market.
Trading in the cryptocurrency market is simply the buying and selling of cryptocurrencies, with the aim of making profits off it. In essence, buying when low, and selling when high. Although this is defined in simple terms, being a trader is a lot of work, so adequate preparation is needed before getting started in the cryptocurrency market.
Here are the five things you should consider before getting involved in crypto trading.
1. DO YOUR OWN RESEARCH: ‘DYOR’ is a very popular term among traders in the crypto space. It emphasizes that traders should take control of their investment-knowledge and decision-making. Although it is advisable to anyone new to certain kinds of information. It is especially important for newcomers, who are more prone to making mistakes or being misled. Oftentimes, newbies just want to get so good at trading within a few weeks of starting, that they end up implementing the numerous pieces of advice they get from people without knowing its full implications. If you get into trading with so much enthusiasm without the prerequisite knowledge, you tend to take all kinds of information to implement in your trading methods. Before you begin your trading journey, you need to familiarize yourself with cryptocurrencies and the financial markets. Luckily, when it comes to cryptocurrencies, there are plenty of resources to help you on the internet.
2. START WITH DEMO TRADING: After doing justice to your research, you should be able to enter the market to practice all that you have learned because you know, “practice makes perfect”. You can only master what you have learned through practice in the actual cryptocurrencies but it is not advisable to practice with real money. Some exchanges give the opportunity to practice using a demo account where you trade using virtual money. A demo account is a type of account offered by trading platforms, which is funded with virtual money that enables a trader to experiment with the trading platform and its various features, before deciding to set up a real account funded with the trader’s actual money. Demo trading allows you to experience trading with real-life trading tools and features on an exchange. To promote Demo trading among beginners, Naijacrypto offers a competition module, where participants can practice trading with virtual monies. There are daily and weekly competitions new members can join to gather more experience before they start trading with their monies.
3. SIGN-UP ON A TRUSTED EXCHANGE: There are many cryptocurrency exchanges in the market and for this reason, it is advisable to do thorough research on all the ones at your disposal. Naijacrypto is an all-in-one cryptocurrency exchange. It has an interface that is beginner-friendly and has several features to enhance trading experiences for cryptocurrency traders. You did not stumble on this article by mistake, so, to get started, sign-up on www.naijacrypto.com
4. START WITH LOW-RISK CRYPTOCURRENCIES: While practicing with a demo trading account will help you understand and grasp the workings of the cryptocurrency market, you need to trade with real money to have a proper feel of the market. Now when starting, ensure you are starting with low-risk coins, i.e coins that have proven use cases and very high adoption rates. Coins that are more stable and less volatile. These are usually coins that operate on their native blockchain.
5. DON’T BE A DAY-TRADER: Day trading in crypto usually refers to the practice of purchasing and selling a cryptocurrency within a single trading day hoping to make profits from a day’s price speculation. To practice day-trading as a beginner even with a demo account is not advisable. Only after you have mastered the basics of trading in the cryptocurrency markets can you decide whether to be a day-trader or not.
These are tips that would help you before trading in the cryptocurrency market. Get started on www.naijacrypto.com
written by Joy Abia