No strategy for trading cryptocurrencies? You might be just one step away from bankruptcy! Check out my six tips!
Only thinking about making quick money won't work
Cryptocurrencies are skyrocketing, and everyone is drawn in, wanting a piece of the pie. However, this is not a shortcut to get rich quickly. Too many people are looking to get rich overnight, which may actually lower the exchange rate.
The cryptocurrency market is particularly speculative; some people lose money while others get rich overnight. Although cryptocurrencies have risen sharply in the past year, this trend cannot continue forever. Historically, everything that has risen will eventually have a period of decline before rising again. Just like in 2013, the cryptocurrency market crashed once, and it could happen again. So don’t think you can get rich quickly through cryptocurrencies; make wise decisions and don’t trade recklessly, or you might end up losing money.
If you can’t manage risk, you may easily lose
As the old saying goes, "The small pig eats a lot, the big pig gets eaten." In the cryptocurrency market, skilled traders do not wait until the price peaks to act; they look for small profits that can accumulate over time. Therefore, managing the risk of your investment portfolio is particularly important. In illiquid markets, it's best not to invest too much money and also set a stop-loss point to avoid losing too much.
Don’t forget intermediaries need to make money
Many people trading cryptocurrencies are unaware that intermediaries take a cut, which is their way of making money. If you’re not aware of this, you might be overcharged service fees or fines by intermediaries, and the exchange rate may also suffer. So be mindful of these costs.
Don’t let pressure crush you
Sometimes, when you see others making money while you’re not, you might think, "Why didn’t I buy that?" That feeling is really unpleasant. But don’t act recklessly just because of pressure! Prices may rise further, but they can also drop at any moment. So, wait until you have the right conditions and judgment to act, and also know when to pull out.
Day trading requires patience and discipline
Day trading is about finding buy and sell points, trying to make money off information. This requires constant attention to the market, along with patience and dedication. While some people have made money from day trading, others have gone bankrupt because of it. Therefore, day trading is particularly difficult, and you must keep a constant eye on the market.
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