10 Insider’s Tips : Investing in Cryptocurrency 2021 for Beginners

ATFX

Publish date: Wed, 19 May 2021, 01:53 PM

Many people are looking for information about Bitcoin, the leading cryptocurrency, which has recently witnessed a massive rally in its share price. However, the cryptocurrency market is known for its volatile price swings that can plunge traders into losses instantly. Despite the volatility, traders who know how to minimise their risk exposure and trade manageable positions can successfully trade digital currencies such as Bitcoin.

Two steps to start investing in digital currencies

1. The first step to trading digital currencies is to choose a reliable trading platform. Currency trading has become very popular, and there are many brokers and platforms that support digital currency trading.

2. Secondly, you need to open a real Bitcoin account and activate it, after which you can deposit funds into the account and start trading digital currencies.

How To Assess a Digital Currency Project

The best digital currencies have real-world value and applications. They are widely used as a store of value or to provide valuable services to society. For example, Bitcoin is used as a currency, and its acceptance as a mode of payment globally is growing.

Some digital currencies have other use cases, such as Ripple, which is widely used within the financial services industry to facilitate payments and other transactions. The Ethereum network is also used widely by other cryptocurrencies as the underlying technology.

These three digital currencies are the most valuable, and their real-world use drives their high valuations. The cryptocurrency projects that fail usually do not have a solid use globally, which is why they failed over the long term.

There are many other characteristics of successful digital currency products, but this is why some projects are successful, and most are not.

Top 10 tips for trading on the market Currency digital

1. You must only risk money that you can afford to lose and do not trade with money meant for other purposes, or loans, as this will put undue pressure on you to make profits.

2. You should set small, easily achievable goals, which will motivate you to take on more significant risks and challenges that yield more profit.

3. Constantly track the instruments you are trading so that you can correctly anticipate future price movements and use them to profit from the markets.

4. Always track your emotions to ensure they do not interfere with your trading decisions. While you cannot ignore or eliminate your emotions, you can manage them well so that they help you become a better trader.

5. You should not rely on luck or guesswork, successful traders look for the best setups and take calculated risks that allow them to be profitable over the long term.

6. Always learn from your mistakes by analysing your trading performance to identify your strengths and weaknesses to ensure your trading plan is based on your personality.

7. The best traders do their own analysis of the market and do not rely on anyone to give them trading signals, which should be your long term goal.

8. You have to believe that you can be a successful trader despite all the challenges that come with being a successful trader.

9. Always keep educating yourself on how to be a better trade by learning from expert traders and from your experience.

10. Currency trading can be a full-time job, but very few people get to this level. You can trade the markets alongside your day job until your trading profits exceed your employment income.

Trading digital currencies for beginners

As a beginner trader, trading digital currencies is not very different from trading Forex pairs, but there are slight differences that you should know. Firstly, cryptocurrencies are more volatile than fiat currencies, which is unlikely to change.

You need to monitor your digital currency trades more closely than Forex pairs, given their much higher volatility.

Despite the challenges associated with trading digital currencies, they have much higher profit potential than most other instruments because of their volatility. Therefore, you should be aware of the characteristics of digital currencies before deciding to trade them and incorporate the same into your trading plan.

How To Become a Successful Digital Currency Trader

Having a good understanding of trading will give you a slight advantage when trading digital currencies as even the most successful traders have to adapt to changing market conditions constantly.

Most beginner traders look for an easy way to become successful traders, which is why many new traders fail and quit trading altogether. Unfortunately, there is no easy way to become a successful trader.

However, there is a right way to become a successful trader, and that is to study the markets, prepare well for your trading day, and trade your plan. Most unsuccessful traders do not follow these rules and end up being disappointed and racking up significant losses.

The Basics of Currency Trading

The bid and ask prices are quoted, so the bid price is the one you can buy the currency at, while the ask price is the one at which you can sell the currency. If you are buying a currency pair in a trade, you must think that the currency pair’s value will rise over time and make you a profit when you sell it at a higher price later.

The opposite is true when you sell a currency pair as you expect prices to fall, making you a profit when you repurchase it later at a lower price to close the position. A currency pair rises when the value of the first currency is higher than the second currency, and it falls when the value of the second currency is higher than that of the first.

Therefore, you are constantly betting that the price of one currency will rise at the expense of the other currency, making you a profit on your trades.

If you ever wondered about what forex is, you may have heard of contracts for difference (CFDs). There are two ways to trade forex, which are using CFDs or through spot forex, also known as margin. As traders, we usually trade CFDs, which are online instruments, while spot forex involves buying and selling the actual currencies like you would do when travelling to another country.

Set up a Cryptocurrency or MetaTrader 4 account and start trading now!

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