The Cryptocurrency Market is a volatile and high-risk market. Therefore, investors who want to trade cryptocurrencies must carefully investigate and research before trading, especially those who are new to the cryptocurrency market. Let’s learn 6 basic rules newbies need to remember before entering this risky market with 5ROI Global.
Don’t make too big crypto transactions
Many investors often have the mindset of “invest larger” to win bigger. In other words, they will choose to bet a large amount with the expectation that the trade will generate a profit and this profit will also be more than when betting a small amount.
In fact, even if you are a risk lover, you should not trade too big. Because we are new, understanding the market is still limited, this has a great impact on the final result, not just luck.
Instead of spending 7% out of 10% of your crypto portfolio, use about 1% on your first bet. Next time, let’s spend a lot of time researching the market, learning about different cryptocurrencies and their values and prospects. Allocate your capital more to crypto trading once you understand the market.
Ready to respond to strong market fluctuations
One of the principles for new investors to understand the cryptocurrency market better is to “get involved” in the real market. In other words, crypto traders need to invest directly in order to better understand how to trade and market fluctuations. From there, the trading experience, as well as the ability to judge the market, will be better.
Responding to strong fluctuations forces traders to have a strong mentality. The cryptocurrency market is a risky, volatile market. We can see the most obvious volatility in recent times. The world’s most famous cryptocurrency Bitcoin has surged after positive effects when the United States Securities and Exchange Commission (SEC) approved a Bitcoin ETF to be traded on the New York Stock Exchange. Bitcoin price set ATH to set a record of more than 67,000 USD. However, in recent times, the market is turning bleak down to $48331.94 (as of press time).
The above example has shown that cryptocurrency traders need to be mentally prepared, ready to respond to strong market fluctuations. We need to observe and make informed decisions in each transaction to bring the best results.
Use a Trusted Cryptocurrency Trading Platform
Cryptocurrency traders need to investigate and invest through a reliable platform with an advanced, reputable and quality security system. This is to ensure your assets don’t get stuck in the exchange if something goes wrong with that company or platform.
With a platform with a smart security system and friendly interface, it will help investors feel more secure when buying/selling assets in the crypto space. Also, approach and choose trading platforms wisely so that your trades are guaranteed not to be stolen by hackers.
Do not listen to the advice of “fake experts”
The fundamental analysis in the crypto market is limited with a lack of reliable information. Nowadays, new traders often believe in unverified information on social networks. This problem makes it easy for you to make the wrong investment, leading to undesirable consequences.
Many crooks these days often form groups with the “brand” of market analysts to entice people who do not understand the cryptocurrency market to invest in untrustworthy projects or defraud their assets.
To avoid being scammed, you should verify the information before investing in a project or a certain cryptocurrency. It is important to check the market capitalization and trading volume of that cryptocurrency. Low market cap and negligible daily volume are indications of how well the project (coin) is growing in the cryptocurrency exchange market.
Focus on blue-chips when trading cryptocurrencies
Like the stock market, the cryptocurrency market also has bluechip, mid-caps, and penny stocks.
Instead of focusing on confusing coins, you should focus on Blue-chips. This is a stock of a reputable company with solid financial status, large market capitalization. Big cryptocurrencies like BTC, ETH XRP… even though they are more expensive but offer more stable value, it can also boost the overall market sentiment. Widely held coins with large market caps are less likely to be manipulated compared to coins held by a small number of people.
Keeping abreast of global developments
Whether you trade crypto in Vietnam or the US, UK… you are still active in the global crypto market. Therefore, any global impact can affect the market price. Cryptocurrency investors need to stick to key markets like the US, Europe, Singapore, etc.
As mentioned above, right after the SEC approved the Bitcoin ETF to be traded on the New York Stock Exchange, the Bitcoin price set an all-time record ATH. This is one of the effects of the US market on the global market, and many “whales” have followed the global development, bringing in “super huge” profits.
Keeping abreast of global market trends also makes it possible to act immediately and reap quick profits.
However, we still understand that the cryptocurrency market has many risks, so trading investments will not have absolute guarantees.
Before starting to “enter” the cryptocurrency market, cryptocurrency traders should carefully remember 6 basic principles to ensure safe, efficient trading. Do not rush to invest in an area when you do not really understand it. We hope you have a pleasant experience when trading in the potential cryptocurrency market. Don’t forget to follow the latest news and events about 5ROI Global here
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