5 Steps To Start Investing In Cryptocurrencies

Step 1. Do your research

To increase the chance of being a successful cryptocurrency trader, you need to do following types of research:

Technical analysis

It involves examining historical price charts and market data to predict future price movements. It helps you in:

• Price Patterns. Analyzing charts helps identify common patterns like triangles, head and shoulders, and flags, which can signal potential buy or sell opportunities

• Support and Resistance. Recognizing key support and resistance levels helps traders set entry and exit points, reducing risk

Crypto project analysis

In addition to technical analysis, understanding the fundamentals of cryptocurrency projects is crucial for successful trading.

• Project Viability. Assessing a project's whitepaper, team, use case, and partnerships helps determine its long-term potential and sustainability

• Market Sentiment. Positive news and developments can significantly impact a cryptocurrency's price, making fundamental analysis vital for anticipating market shifts

Study Blockchain Technology

To excel in cryptocurrency trading, it's essential to grasp the underlying blockchain technology. It helps you in:

• Risk Mitigation. Understanding blockchain's security features and consensus mechanisms can help assess the safety of a particular cryptocurrency

• Informed Decision-Making. Awareness of blockchain advancements and innovations allows traders to anticipate shifts in market sentiment and adapt their strategies accordingly

Algo-Trading and Quantitative Strategies

Algo-trading and quantitative investment strategies involve using computer algorithms and mathematical models to make trading decisions. It helps you in:

• Automation. Algorithms can execute trades faster and more efficiently than manual trading, reducing the risk of emotional decisions

• Data-Driven. Quantitative strategies rely on data analysis, providing a systematic approach to trading that can be backtested for performance improvement

Step 2. Create a plan

Creating a plan always ensures that as an investor, you have your priorities set and that you have planned accordingly. Having a clear goal in mind, to achieve in a particular time frame will help you out in choosing the right type of currency according to your specific needs. The market being highly volatile, does not reward decisions based on emotions but rather pushes for more strategic choices for better results.

The higher the demand for cryptocurrency, the higher the risk. Risk often leads to losses, so one should be aware of their risk tolerance levels and it should not be ignored as it is a very important aspect of the planning stage. These days Crypto staking offers a new way for investors to earn rewards without actively participating in constant trading and monitoring of the markets.

Step 3. Start small

Cryptocurrency should be bought through an exchange or investment platform. There are various factors that you should look out for when selecting an exchange. Some of these are security, the volume of trading, the different types of cryptocurrency available for purchase on that given exchange, fees, and minimum investment requirements. There are two things to keep in mind while starting small:

No emotional decisions

The risky nature of cryptocurrency investments lead you to the decisions of invest accordingly, not investing more than you can afford to lose. Whether it's a down payment for your new car or any other purchase, the money that you require in the next few years should be kept in your bank account so that you can use it when you need it. Don’t lose all your money driven by emotions such as greed especially when you are new to investing in crypto.

Gradually increase the amount

There should be a gradual transition from small investments to comparatively bigger investments over time. It will be beneficial for you as you gather the idea of how the market works without taking many risks when you start small and garner all the experience with time and use it accordingly to get better rewards.

Make sure you increase the amount because you know the market well, not because you think you know the market well due to a few winning trades.

Step 4. Stay informed

The cryptocurrency market is expanding and evolving, so it helps to keep an eye on new developments and trends in the market. Keep updating your charts and looking out for new coins that are available in the market and do proper research on them before investing. An investor must be updated on major developments that may have the ability to directly impact market liquidity factors.

How do fraudsters sneak in?

The fact that scammers have used this form of currency to steal money and assets from people is known to all. According to a report published by blockchain data firm, Chainalysis, scammers have stolen $14 billion of Cryptocurrency in the year 2021. Fraudsters create fake cryptocurrency trading platforms and fake versions of crypto wallets to trick unsuspecting victims.

They also try to trick people through fake apps easily available to download through Google Play Store and Apple App Store. Thousands of people over time have been scammed through these apps, even though they get banned whenever they are found.

As first-time traders, you need to be aware of the signs of these scams. Some of these can promise guaranteed returns, which is not possible in any financial investment including cryptocurrency. So when the crimes and frauds are on such high levels, it is of dire importance to be aware of the latest scams and frauds in the crypto business.

When you choose an app and sign up your account, you can get a crypto f bonus, offers, and promotional benefits. Always consider upcoming offers before choosing a cryptocurrency app.

Step 5. Be patient

There are three primary methods to be patient while investing in cryptocurrencies:

Long term investment plan

Cryptocurrency trading can benefit you the most if you plan it as a long-term investment. At this point, no one can predict its future but experts from the industry Marshall Beard, chief strategy officer at crypto exchange Gemini, believes Bitcoin to break it's all-time highs this year. It should not be treated as a scheme to get rich overnight instead you should be patient and let your investment grow.

Poorly regulated market

Cryptocurrency involves higher risks than any other investments due to its fluctuating market. Many experienced traders or investors try to put their investments elsewhere as these currencies tend to lose their value at a very high pace. The market is not only volatile but also very poorly regulated, hence it increases the risk factor.

Being patient makes you analyze the market thoroughly, and make informed decisions rather than acting out on impulse. It provides the necessary time for due diligence. Patience helps in giving time to the investment to develop and mature, to gain much more rewarding results.

Is Cryptocurrency a good investment?

People across the globe have experienced different outcomes from crypto investments. Some have doubled their wealth, on the other hand, some lost everything they had. Unless you experience the flux of the market yourself, it's very tough to say whether it is good or bad. As long as you follow the above-mentioned steps, research about these currencies and try to read the market with patience, it definitely would not be a disaster for you.

Lloyd Blankfein, an American investment banker and CEO of Goldman Sachs, once said, “Still thinking about Bitcoin (Cryptocurrency). No conclusion - not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold”.

The above statement shows the uncertainty of cryptocurrencies and also in its way invites people to try it out and then endorse it or reject it. Until you try it out on your own, it's difficult to say whether it can be considered as an alternative to paper money.

To a beginner, the advice that most experts give is to start small and be prepared for adverse scenarios. Just like any other investment, make sure you know your investment goals, have a plan of action, and are aware of your financial situation before investing in it.

Best cryptocurrency exchanges

1

9.4/10

Go to broker

Your capital is at risk.

Minimum deposit:

$1

Review

The Binance exchange is one of the largest cryptocurrency exchanges in the world with its headquarters in Hong Kong. According to the CoinMarketCap cryptocurrency portal, Binance holds the top spot in terms of aggregate indicators of the platform's daily turnover, the number of novices and active users, liquidity, and web traffic (ranking, queries, statistics in search engines, etc.). The exchange is also a cryptocurrency startup that has its own “native asset” used in the Binance ecosystem as the “basis gas” (payment internal unit). More about Binance Card

Pros/Cons

•low commissions due to liquidity and trading volumes.

•high platform performance;

•proprietary BNB Coin which allows Binance to reduce the commission size;

•a proprietary cold wallet guarantees the security of your crypto assets by storing them.

•complex verification procedure;

•the exchange is not licensed by a regulator;

•The platform can go offline without warning;

•there are complaints about the technical functionality of the platform;

•there is an intricate mechanism for calculating commissions and rewards (grid system Maker/Taker).

Study Review

2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

₮1

Review

The BitGet crypto exchange provides traders with the opportunity to trade in spot, futures, and cryptocurrency. Cryptocurrency is used exclusively as instruments at the exchange: BTC (₿), LTC (Ł) ETH (Ξ), USDT (₮) and others. Trades are carried out on the crypto exchange’s own platform, which is available as a web terminal and an application for mobile devices. BitGet's fees are lower than its competitors in the market, with maker fees of 0.02% and takers of 0.06%. The commission can also be paid with bonus funds that each BitGet client receives upon registration, verification, and a trading account replenishment. There are no fees for maintaining an account, but a commission is charged upon withdrawal, the amount of which depends on the cryptocurrency in which the withdrawal is made. For investors, BitGet offers its own service for copying trades, and it is available at the exchange and at an affiliate program. Novice traders can use demo accounts to hone their trading skills, but there are no educational materials on the website. The BitGet cryptocurrency exchange provides services on an international level and cooperates with traders from different countries.

Pros/Cons

•availability of demo accounts;

•convenient ways to contact the support service;

•a wide range of cryptocurrencies for account replenishment;

•service of copying trades for receiving passive income;

•ability to reduce commissions using credits earned in the bonus program;

•ability to engage in algorithmic trading;

•the exchange uses hot and cold cryptocurrency wallets to store client funds.

•Deposits and withdrawals in fiat currencies are not available.

•There are no educational materials for novice traders on the exchange website.

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