Effective earning with bitcoins. What will help you trade electronic currency?
TOP-5 tips for a bitcoin investor on how to buy and sell cryptocurrency
Many believe that investing in bitcoins is a complex process. But undoubtedly, the temptation is great. Especially against the backdrop of high prices. Today, buying and selling cryptocurrency is easy. The main thing is not to lose your head. Minimize risks and increase your chances of success.
Fly-pay.io shares the TOP-5 tips that will help you effectively earn on bitcoin.
1. Thorough Preparation
Buying and selling cryptocurrency is surrounded by myths, unreliable information, stories of success, and failure. Everything related to electronic currency is unfortunately still a mystery.
For starters, we recommend understanding what you are dealing with. It is important to understand that buying and selling cryptocurrency involves some risk. If you are a beginner investor, do not risk a large sum of money, even if you can afford it.
The world of bitcoin is decentralized, so you can only rely on yourself here.
Initially, do not dream of big profits. It is better to understand obvious things, such as how bitcoin and blockchain work. A beginner investor should understand how blockchain securely stores data and also cryptocurrency tokens. And these are just basics.
An undeniable advantage in the world of electronic assets is information. Specialized sites provide accessible information about buying, selling, and exchanging cryptocurrency. Moreover, Bitcoin has already captured the investment management market. More and more investors are willing to invest real money in it. The situation becomes simpler and oriented towards the traditional investor. The introduction of such a thing as a futures contract helps newcomers learn about bitcoin.
2. Is the Risk Justified?
Any investment involves financial risk. Not to mention a new and volatile currency. We know rare stories of financial success when lucky ones became bitcoin millionaires. But, of course, they invested huge sums in Bitcoin. However, this is not an indicator of future success. Spend the capital you can afford to lose.
Today there are many investment strategies that allow you to successfully work with electronic currency. For example, the "dollar cost averaging" method. It involves regular (at the same time every day or month) investment of a certain amount of funds in investments. This strategy is suitable for purchasing cryptocurrency.
Another piece of advice is not to monitor the Bitcoin exchange rate day and night. It is enough to determine the entry/exit point and follow it. With cryptocurrency, any methodology will be profitable since its constant predictable growth should be taken into account.
3. Efficiently Diversify
Beginner investors often prefer Bitcoin. Although there are many other digital currencies in the world that sometimes grow faster.
So, in this matter, reasonable diversification is profitable. Remember, no experienced investor "puts all their eggs in one basket." Invest in a variety of "altcoins." They work well and are profitable when Bitcoin falls.
4. Forget About the Exchange
The cryptocurrency environment attracts scammers and hackers who are happy to rob you. It is important to be careful and not give them a chance.
After buying cryptocurrency, transfer it to a secure wallet that you can control. Use exchanges only to exchange bitcoins.
Bitcoin is the same as funds, so they should be managed rationally.
5. Prepare for Instability
The crypto world is known for its high volatility. Rapid declines and peak growth scare beginner investors. Especially those who have previously worked in regulated markets. However, a decline is not a catastrophe. Use strategies that allow you to withstand frequent price fluctuations.
We have already talked about the first one - diversification. Another strategy, which is favored by financial gurus, sounds like "buy and hold." Its counterpart, used by investors to sell cryptocurrency and buy it - the "hodl" strategy. It involves storing digital currency regardless of market fluctuations.
Crypto world sharks advise not to succumb to the temptation to quickly sell Bitcoin at its maximum and then buy it at a throwaway price. This is the so-called short-term trading. Many investors start with it, but unfortunately, it does not yield good results.
A passive trading style helps to abstract from the minute-by-minute fluctuations of Bitcoin and not to panic during sharp lows.
