The world of cryptoassets can seem incredibly confusing to new traders. We get it – we’ve all been there. Even experienced crypto traders make mistakes from time to time. Successful crypto trading is all about being prepared before you do anything – that’s where we come in. We’ve compiled a guide of all the things you need to know before trading crypto.
INVEST IN CRYPTO NOW
Your capital is at risk.
- Do Your Own Research (DYOR)
DYOR or Do Your Own Research is a super common term within the crypto community. DYOR is pretty self-explanatory, but serves a reminder to always investigate coins before you buy them or start trading with them.
There are tons of resources online for you to start with. From cryptocurrency subreddits to Youtube, Quora, Twitter and BitcoinTalk forums, you’ll honestly never run out of new things to learn. Starting to trade crypto is a personal decision, but you can make sure that you’re guided well and you have a wealth of knowledge at your side.
- Invest what you’re willing to lose
This point is utterly crucial. Never invest more money than you are willing to lose. That’s just a bad idea. Taking loans, maxing out credit cards, or even just trading outside of what you’re comfortable with and can afford, is a recipe for disaster.
Only ever invest what you’re willing to lose. There is always a risk to crypto trading, no matter how well you’ve researched a coin, so always be prepared for a negative outcome.
- HODL
We’d say that 99% of successful crypto investors and traders are massive proponents of HODLing. To HODL is to hold on to your coins, even when the market dips rather than sell up and cash out. HODLing generally sees you achieve a much better result in the long run!
Just think of those poor sods who sold their Bitcoin just before the price soared to their highest heights in December 2017 – ouch.. HODLing is almost always the way to go – rather wait out bear markets and make an informed decision when it comes to ridding yourself of a digital asset.
- Diversify your portfolio
Ever heard the old saying, “Don’t put all your eggs in one basket.”? Yeah, the same applies here. When you first start out, it’s important that you research more than one coin that you’d want to trade with. Don’t spread yourself out too thin, but ultimately you’re likely to have more success trading with two or three coins instead of one. Of course Bitcoin (BTC), Ripple (XRP), and Ethereum (ETH) are all fantastic choices, but also do some research and find out about other altcoins that may work really well for you.
Putting all of your money into one trade, could ultimately result in you losing all of it. If that coin dips you’re in trouble, so rather diversify your trades across a few coins to mitigate your losses!
- Overcome Fear, Uncertainty and Doubt (FUD)
One of the most crucial things you need to know before trading crypto, is how to overcome FUD. FUD stands for “Fear, Uncertainty and Doubt” and is a crucial factor in determining whether a crypto trader will be successful or not.
Unfortunately, this one is up to you – overcoming FUD is your own journey. However, what we can say is that you should always listen to your gut and your knowledge, over others. Don’t give into fear-mongering and always do your own research (DYOR) before acting.
INVEST IN CRYPTO NOW
Your capital is at risk.
Tools for trading
Having read this guide, we hope you now feel comfortable with all of the things you need to know before trading crypto. The 5 key things to remember are: FUD, HODL, Diversification, DYOR, and Investing only what you can lose. Other than that, always remember to stick with your gut and make informed decisions in every aspect of your crypto trading.
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Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk.