What is cryptocurrency?
A cryptocurrency is a form of currency that is present digitally and is used for secure transactions. They are stored in something called crypto keys.
They are independent of the government and any public and private entity.
This is a reason the scams and frauds in the crypto industry have been going Haywire.
Cryptocurrency is run by blockchain technology through a process called mining.
Cryptocurrency has been around since 2009 but it has become popular only recently.
Best tips for trading in cryptocurrency:
There are some aspects to follow and be careful about while trading in cryptocurrency, to become wealthy and a successful trader.
Have a strategy for crypto trading:
It is not very easy to trade in the crypto market, there are a lot of scams and frauds that are taking place out there. The number of scammers trying to fool and try to steal money from victims is increasing.
The reports of scams in the cryptocurrency have gone up to 7,118 at the start of 2021 which was 30% of the whole of 2020.
The average loss per victim was £ 20,500
So it is very important to take a step back from the hype to prepare and have a strategy in place before starting it to avoid failures that are tough to bounce back from.
Manage risk:
Always set some money aside to invest and do not use more than that for trading, it could be tempting but don’t.
It is a risky business and the number of people who lose money is more than the number of people who don’t.
Diversify your portfolio:
It is not a very good idea to have all your money invested in one cryptocurrency. Or as they say, don’t put all your eggs in one basket. Just like in stocks and shares, spread all your money in different digital currencies. There are many digital currencies to choose from, so do your research and trade wisely.
Make targets of profits and losses:
Keep a target in mind before starting the trade. Knowing when to exit a trade in Bitcoin, regardless of whether it’s profitable or not, is a critical skill for investors. Setting a stop-loss level to minimize losses is essential and a trait that all investors should possess.
It’s equally important to have a target profit level to prevent greed from setting in. Investors should avoid getting too attached to their positions and remain disciplined in their approach to trading. By having a strategy in place and sticking to it, investors can increase their chances of success and avoid making impulsive decisions based on emotions.
Stay alert during FOMO:
We as humans tend to rush into what everyone is doing, cryptocurrency trading is something everyone is doing lately, there is a phenomenon called day trading where you start trading on a particular day and sell on the same day, it is a very tempting bet but the best way to lose your money in big numbers.
Especially if you feel the fear of missing out you would lose your money even faster, so if you participate in day trading keep a check on your FOMO. avoid trading on days you feel anxious and pressurized.
Keep yourself up to date:
It is very important to keep yourself updated, it is a rapidly growing business and people are coming up with new ways to make high wealth. If there is not enough information about the latest trends, it is very obvious that one would lack what the knowledgeable ones are getting.
Mistakes do happen:
There are several scammers out there trying to steal money from people and fool them. It is important to be careful, the best thing would be to not fall prey to these scams and frauds.
But lately, these scammers have become very smart and sophisticated so it is not a shock to have fallen prey once, see what to do next, and how to recover the lost money.
How to save yourself from these scams:
- First and foremost educate yourself as much as you can. Make a plan and stick to it, until you are sure something will work out do not deviate from your plan.
- Before clicking on links you get through mail or sms, think twice they may be ways to steal your personal information. Before giving your personal information, research the platform thoroughly.
- Think before registering for courses that promise wealth overnight.
- Sometimes scammers come and say they have earned millions using cryptocurrency, and they will help you do the same. They probably want to steal our money.
- If anyone forces you to do something as soon as possible they are probably scammers trying to scam you, so be careful and do your research before committing.
Pros and cons:
Pros:
- Fund transfer would become easier, there is no need for any 3rd party like banks or any other public or private entity.
- It is cost-effective compared to other online transactions.
- The payments made are safe and secure.
- They offer anonymity.
- They have wallets, which can only be accessed by public and private key owners.
- Fund transfer happens by minimum fees of processing.
- Unless someone gets access to your crypto key, it is not possible for anyone to access your funds. But this is something one should be very careful about.
- Crypto is very safe and secure
Cons:
- The hidden anonymity makes it easy for scammers to do illegal activities.
- Payments are irreversible so it gets difficult to recover lost funds.
- Not many places accept cryptocurrency as a payment method.
- It is possible to lose a lot of wealth.
Conclusion: Cryptocurrency trading can be a highly lucrative but volatile market. To succeed, traders need to stay informed about market developments, stay disciplined with their trading strategies, and manage their risk effectively. It’s essential to understand the technology behind the currencies being traded and be aware of the regulatory environment. Additionally, traders should avoid making impulsive decisions and take the time to analyze market trends and patterns. By following these tips, traders can increase their chances of success and minimize their risk of losses in cryptocurrency trading.
