With more and more people entering the cryptocurrency market, the amount of the information online increases as well. Unfortunately, seeing as how everyone is free to write their own opinion online, this increase in volume makes it much harder to recognize a solid tip from a misleading one. In order to help you sort this out, we present you with top five tips that will help you keep up with cryptocurrency during your own independent research and decision-making.
Set your targets
When you start losing or making money, things might get just a bit too emotional, which is why you need to set clear targets beforehand. Examine previous trends in the trade that you’re trying to make and answer two questions – what is the best and the worst-case scenario. The volatility of cryptocurrencies is well-known. Luckily, you can automate your sell-order (or at least make an alert) as soon as the value drops below the point you can tolerate. In traditional investment, the stock market or even the forex market, we would be talking about 1-2 percent loss and 5-6 percent gain. Here, however, we’re talking about 10, 20 or 30 percent in a matter of hours.
Don’t be too quick to jump on a bandwagon
Another mistake that a lot of new cryptocurrency investors make is buying a coin that is on the rise, therefore boosting its value, and then quickly selling it once it starts falling in order to minimize their loss. The problem with this mentality is that it’s impulsive and greed/fear driven. As such, it acts like an impulse or a gambler’s drive rather than a rational business decision. Sometimes, it’s better to miss out on a potentially lucrative trend than follow up with this win-or-die trend.
Follow reliable portals
The greatest problem with cryptocurrency tips lies in the fact that the landscape of this industry changes at an astounding pace. That being said, there are new regulations (or at least talks of regulations) every day, new ICOs hitting the market and upgrades to the blockchain technology that are bound to make a splash in the industry. In order to stay ahead of all this, you need to find several reliable portals like The Blockchain Review where you can get the bulk of important, recent information.
Be satisfied with small profits
A lot of cryptocurrency investors enter this game for all the wrong reasons. What they see is that Bitcoin was at $750 in the early 2017 and over $19,000 at one point in December 2017. Naturally, they expect this to happen again and for their profits to skyrocket over such a small time-span. In theory, this is definitely possible, but the chances of such a thing happening again, especially of it happening to you – are next to nothing. So, you shouldn’t enter the world of cryptocurrency in hopes of “winning a lottery”. You’re there to make business, which means that you need to learn how to be satisfied with any kind of profit.
ICOs are incredibly risky
The greatest ROI, especially with the scenario similar to what’s described in the previous paragraph, can be achieved by buying ICOs. Still, investing in ICOs is incredibly risky and you should never buy more than you’re ready to lose. Of course, there are some parameters that can indicate that an ICO is promising, however, there is no 100 percent guarantee. On the other hand, some might argue that it’s even more important to spot a bad cryptocurrency trend.
As you can see, the first thing you need to understand is that “success” is a subjective term. Sure, you may increase your assets by 5 percent, yet, for people who hoped to multiply their revenue 10 or 100 times, this may seem like a failure. Therefore, your first goal should be to set objective expectations. The second objective should be to find reliable information sources. Finally, you need to learn how to run your cryptocurrency trade as a business and not a luck-based game. Those who manage to pull off these three are in for real long-term gains.