Over the past few years, cryptocurrency has gone from a quiet and fading industry to a booming mainstream hit. Due to the explosion of bitcoin, people are constantly putting money into cryptos in the hope that they can make millions. It is worth a try as well, as some coins have exploded and quadrupled in value in an extremely short period of time. The crypto market is like a stock market that operates much faster. (Image Credit: Eftakher Alam/Unsplash)
While there is potential for huge amounts of profit, there is also a considerable risk of losing everything that you have invested. With any investment, you risk losing your money if you invest in the wrong currency. If you don’t do research either, you will get burned by the market. Fortunately, there are strategies that you should try that will help you find success. While nothing can be guaranteed, these will help you maximize the amount of money that you can make. Here are some crypto trading strategies that you have to try.
Monitor Bitcoin for Day Trades
The crypto market is interesting in the fact that everything seems to follow bitcoin and its trends. This means that you have an opportunity to monitor things and predict what is going to happen before it actually does. Having investments in other cryptos is key as the more extensive your portfolio is, the better your chance of making money and taking advantage of these opportunities.
This strategy best works for day trading and is quite simple to follow as well. Simply watch bitcoin and compare it to all of the other coins. If bitcoin begins to drop, you can expect the other coins to drop with it. If bitcoin is rising, the coins will rise as well. There will be some occasions when bitcoin drops, but instead of falling, crypto will rise or “breakout,” as it’s called. The experts over at insidebitcoins.com say that these are prime moments for you to sell that crypto. Those short term peaks will allow you to make your money back and then some, which can be used to reinvest into crypto.
By doing this repeatedly, you can begin to have more and more cryptos to trade with, and the more you are trading with, the more money you stand to make. You can expect this strategy to work the opposite way as well. If bitcoin is rising but a crypto is dropping, that is a time to consider buying as you can expect a correction to come soon and lower it back down. No matter what, always ensure that you are monitoring bitcoin and tracking what it is doing during your day trading.
Whenever you are trading anything on the market, you don’t always have to go for the home run. Making any type of profit should be viewed as a success, and you should not be afraid to pull out if you have made some money back. Setting realistic goals such as a 1% or 2% gain, is a great way to ensure that you make money and you keep building your profits. Quickly getting into the market and out of the market at the right time is a proper way to make money.
There will be times when you pull out a little too early and miss out on some profits. While this might be frustrating, think of all the times when you sold, and cryptos quickly dropped back to where they were or even lower when you bought in. We often remember these times, but we forget all the times that we had success and made money. Look to trade often and capitalize on small gains instead of going for the home run.
Diversify Your Portfolio
As mentioned above, it is recommended that you invest in several different cryptocurrencies instead of throwing all of your eggs into one basket. While all cryptos seem to follow the general trend of bitcoin, there will always be some outliers and coins doing their own thing. If you have invested in these, you now have the potential to sell them and make money. From there, you can look to reinvest back into that coin or put it elsewhere as that coin begins to drop back down in value. The more coins you have invested in, the better your potential is to make money.
Know When To Take A Loss
One of the biggest issues with stocks or cryptocurrency is that people do now know when to take a loss and lose some of the money that they invested. It is inevitable at some point crypto you invest in will not do as good as you thought and will drop below the level that you bought in at. There are a few important things that you have to do when this happens.
Firstly, do not panic! Crypto is very volatile, so it is normal for things to drop quickly. Remember that just as quickly as it fell, it could also rise. Therefore, you have to make sure that you do not panic sell the moment you are losing money.
That being said, you have to know when to pull out if a coin is tanking in value. People will often just watch it continually drop over and over again until eventually, it is worth little to nothing or you have lost the majority of your money. Refer back to the graphs and look at the trends of the coin. If you are outside of the standard with the coin, you can expect some sort of correction. If that correction does not come soon, look to sell the crypto and invest the money elsewhere. You will take a hit, but you will at least have the opportunity to reinvest. Always know when to take a loss.
By following all of these tips, you should be prepared to trade crypto every day. Remember that it is a volatile market, and it can be extremely frustrating to work with. Always do your research and keep tracking bitcoin and the other coins that you have invested in. Good luck with everything. What cryptos do you plan on investing in?