If You Are Into Crypto Trading, You Wouldn’t Wanna Hear This
This post is about some advice on cryptocurrency trading that you most likely don’t want to hear. Whether you are a new comer in the crypto space, or have been investing in cryptocurrency for a while, the volatility observed in the industry in 2019 has pushed me to write this piece.
A lot of individuals have gone through different types of risks, losses and scams involved in crypto trading in 2019. If you read along carefully, you may be able to protect yourself from becoming a victim of a scam or greed.
You’re probably not that good at trading crypto
This is something that most people don’t want to hear. Crypto trading is something that is incredibly glorified. It is believed to be the dream that many people imagine it to be — sitting on your laptop, trading bitcoin and making a ton of money, and then living off those earnings and having a fantastic easy life.
Well, there are significantly more people who have actually lost small and large sums of money trying to trade crypto than there are people who are able to profitably do it on a consistent basis. The ones who are successful at it are a very small minority of individuals. So when are looking to do it, you should know that unless you are very quick at picking things up, or have some type of competitive edge, you are probably going to get your face ripped off in the cryptocurrency markets for a variety of reasons.
Crypto trading is getting more complex as time goes on, especially with the bitcoin halving event coming up in mid 2020. The crypto markets are getting more sophisticated, and there are much more advanced trading experts now. This isn’t 2013 or 2014 anymore when there weren’t as many professional crypto traders as we have today. Hence, in the midst of all these people with sophisticated knowledge in the crypto market, you’re probably going to have a hard time in capturing insights on crypto price trends, in order to make easy money through crypto trading in 2020. You might actually lose money in crypto trading if you’re not extra careful.
Just think about it. If everybody was so profitable with their own trading strategies, nobody would be needing to buy courses on crypto trading, or even read tons and tons of articles on crypto price predictions, especially once they are already well-versed in various crypto exchanges. In fact, those who have been trading cryptocurrency for years are the ones who purchase investment guides and crypto courses the most.
So if you’re at that point where you feel you want to minimize the risks involved in crypto trading in 2020, go ahead and get the Crypto Ultimatum to fine-tune your instincts on crypto price trends and reshape your investment strategy.
Another powerful ebook that has recently skyrocketed in sales, and is thus recommended, is Cryptomatic. Cryptomatic teaches the exact tips and tricks for managing risks and volatility in crypto markets. It also guides readers via a 6-step formula on how to successfully invest in ICOs and other blockchain projects. Towards the end of the ebook, it will reveal the one most reliable investing signal in the crypto space, which will change the way you think about crypto trading.
If it sounds too good to be true, it probably isn’t true
The second thing that you need to know about trading crypto in 2020, and even just in general, is that if a scheme or offer sounds too good to be true, then it probably isn’t true. It could either be a scam, or just have a very small chance for the thing that’s being claimed to come true.
This logic can apply across the board. For instance, you hear there’s a cryptocurrency project out there that has 10,000 transactions per second, is incredibly decentralized, has zero trade-offs, and even has partnerships with giants like Amazon, Microsoft or the US government! Does that sound too good to be true already? Well, there’s even an icing on the cake. This crypto project is only at a $5 million market cap right now while all it’s competitors are at a billion dollars. So it’s obvious that this is a fantastic buy, right? Definitely sounds too good to be true to me!
On the trading aspect of things, when something sounds like it’s a homerun, always check your sources and make sure to get information from the right people, before putting your money into it. You always need to be careful and smart about your investments.
It is okay to cut losses
The third thing that again you probably don’t want to hear, but I think is very important, is that it is okay to cut your losses. There is this stigma in the cryptocurrency market, especially around the success of bitcoin. If you have ever taken profits on bitcoin, it’s believed that it was probably not a great move. Bitcoin is now trading at a price where, almost in the entire history of its lifespan, you would have been better off buying and holding on to it than you would have ever been selling it. That’s why this concept of buying and holding on to crypto assets and maintaining faith in the price uptrends has grown so popular.
Now while that may be true in regards to bitcoin, people tend to confuse what usually happens to altcoins with what happened to bitcoin. There have been a number of times for individuals who went bargain shopping when a crypto asset’s price fell by over 50%, as they assumed the price couldn’t go down any further. The reality is the price can actually continue to fall, especially when you’re dealing with altcoins.
So why do I say it’s okay to cut losses? Let’s take an example. Assume I have $10,000 of an altcoin called XYZ. XYZ price goes down by 90% from its all-time highs, and my 10,000 dollars go down to, let’s say, $2,000. Now instead of limiting my losses to $8,000, I start thinking that the price cannot go down any further. It will eventually shoot up. So if I sell off my XYZ tokens now, I would suffer from the $8,000 loss for nothing. I can rather hold on to it and sell off later when the price goes back up. But what happens is the price keeps going down, until I’m left with only $200. Now wouldn’t it have been a lot better if I sold off my tokens and cut my losses when I could still get $2,000? Yes!
Just because people would throw sticks and stones at you if you get rid of a losing crypto asset that you own, it doesn’t mean you have to keep holding on to it with false hopes of its price eventually rising up. It is not the worst thing in the world to sell off your cryptocurrency to cut down your losses when the price drops.
I hope these tips were helpful in eradicating some of the misconceptions about the crypto space.
Wishing all my readers a very happy and prosperous new year!
Originally published at https://opinined.com on January 2, 2020.