Cryptocurrency is a digital asset established to serve as a means of exchange, that applies cryptography to protect its transactions. The first Cryptocurrency known as bitcoin was created in 2009 and more digital currencies generally referred to as “Altcoins” were later introduced. As opposed to central banking systems and other types of centralized electronic money, Cryptocurrency uses decentralized control to operate through a blockchain. Currently, there are more than 1384 active Cryptocurrencies globally and the number is increasing in time. Some examples of these Altcoins include; Litecoin, Namecoin, Peercoin and Swift Coin.
When considering trading various Cryptocurrencies, there are significant strategies and tips you should put in force. Because at normal circumstances, it is difficult to always time the exact market time to make either an effective purchase or sale. Everyone has a different objective of trading and investing, and Cryptocurrency is the same in this regard. Can you imagine a sting whereby a certain Altcoin drops its value after making a purchase? Alternatively, what return would you cash out if you purchased Bitcoin a couple of years ago when it was less than $700? To learn from past failures and success, the following are tips based on our occurrence to assist prospective Cryptocurrency investors;
Participate in Altcoin Trading
You should not ignore the power of Altcoins such as Titcoin, Vertcoin and Monero among others. Majority of individuals tend to engage in Cryptocurrency investment with a single idea of trading bitcoin. Based on experience, Altcoins are basically the best Cryptocurrencies because they have little exposure to public speculations. When investing in these Cryptocurrencies, you should understand that their higher risk is directly proportional to the value of reward they give. The most recommended Altcoins you should consider investing are; Monero, DASH and ZCash.
Be Aware of the Power of Cryptocurrency
Trading in Altcoins or Bitcoin is similar to investing in stocks, whereby both facilities have unique prices. Although, investing in Cryptocurrency is fundamentally different because despite the exchange, you should understand that the basic technology running Bitcoin and other Altcoins can be assumed for retail and institutional capital equally. The decentralized feature of Cryptocurrency implies that it cannot be influenced or closed. Therefore, it remains a strong confidence that the growth of Bitcoin and all other Altcoins will continue to grow to realize its full potential.
Develop a Trading Strategy
You should adopt the most effective and appropriate trading strategy that can give you maximum return based on your capital investment. The strategy should appropriately define the number of times you will trade, the time of the day and the amount of various Cryptocurrencies you will purchase. The most popular tip is that long term Cryptocurrency investments are usually associated with less degree of risk. The trading strategy will also determine the point at which you can oversee impending declines for various Altcoins. As a new investor, developing a strategy will assist you in minimizing risks and maximizing profits at all levels.
Be Cautious of Various Risk Levels
The most important factor to consider before trading different Cryptocurrencies is the level of risks associated with each. For instance, you might find different exchanges offering short orders, whereby you can either predict a short or long move. The long price movement will have a value of 90%, while the short will only have 10%. The long price movement strategy implies that the probability of occurring is high, therefore this serves as a risk catering strategy. To become a successful Cryptocurrency investor, you must learn and understand the nature of various levels of risk.
Examine the Current Cryptocurrency News and Information
This information can be obtained from websites, press releases, journal materials and daily newspapers. A decline or loss in value of a certain Altcoin or Bitcoin will be published for traders to read and this serves as a crucial source of trading information. The news will also provide expert growth predictions and analysis of various Altcoins you should start trading. Studying Cryptocurrency related information ensures that you gather such useful Cryptocurrency related knowledge.
Remember, the Most Basic Cryptocurrency Creates Unpredictable Market Situations
You should consider the volatility of Bitcoin before trading other Altcoins. A carefully consideration should be conducted especially when the value of Bitcoin is shifting sharply. When the value of the Bitcoin is rising, the Altcoins lose their value and this reveals an inverse relationship between the two. This implies that when trading Cryptocurrencies, the value and price movement of Bitcoin is a significant tip to consider.
Choose Altcoins Wisely
This tip is essential because the value of most Altcoins is expected to fluctuate either in short or long term. The most traded Altcoins are believed to be stable and encounter a continuous growth such as, Monero and Ethereum. There are several Altcoins that became completely inactive after their creation and they are; Coynye and KodakCoin. The type of Altcoin you select will determine the future of your investment.
There are various Cryptocurrency exchanges whereby you can buy or sell these digital assets for traditional currencies such as Euro, USD or other Cryptocurrencies. Exchanges are websites that provide a regulated medium to perform Cryptocurrency trading. Many exchanges will demand that you open an account and verify various identification documents. Alternatively, there are also other platforms that do not require such documents. Before choosing a given exchange, you should consider the available methods of payments, reputation, exchange rates, verification requirements, fees and any geographical restriction. These considerations ensure that you only trade at the most convenient and efficient site for you. You can choose whether to trade in brokers, trading platforms or direct trading. Direct trading is the most recommended for new Cryptocurrency investors because there are no fixed fees paid during the exchange. Examples of exchanges that can be used to buy or sell Cryptocurrency include; Coinbase, Binance, Kucoin, Poloniex and Bitsquare.