Cryptocurrency is a digital asset used as a medium of exchange. Bitcoin was the first decentralized cryptocurrency and is still by far the most popular. Other types of cryptocurrencies have begun to gain prominence over the years with time, and many different cryptocurrencies have been developed since then.
Getting started
Buying into cryptocurrencies can be challenging for many reasons: lack of knowledge about how to buy or sell, high market volatility, low trading volumes, etc. You can find useful information on Dogecoin current price index at OKX and much more.
What to avoid
Before you start trading, there are several things you should avoid.
You must have a good understanding of your capital, risks, and profits that you are willing to take. You need to be sure of the reason why you have decided to purchase cryptocurrency. You need to understand your risk tolerance before trading. If cryptocurrency is not for you, then a market loss is inevitable.
Not doing your research
If you are a new trader and don’t have a lot of experience, then you should start trading with an amount that you can afford to lose completely. It’s a good idea to buy small amounts of cryptocurrency and try to get used to trading by placing orders on the amount you bought. Every time you place an order, put your money at stake and make sure that you have thought about every possible scenario before taking action.
FOMOing
This is a psychological phenomenon among traders. Fear of Missing Out. This can be an extremely powerful motivator for people to do stupid things because they do not want to miss out on a potential opportunity. You might see that the price of a coin is moving up and down; you’ll then start to worry about selling too soon or missing out on profits that you could have made if only you had invested earlier. This can lead to over-trading or market manipulation, as people will do anything to get in on the action.
Not having a plan
There is nothing wrong with taking risks and investing in cryptocurrencies, but before you do so, you should have a plan. You need to understand how to approach trading and what the market will be doing in the future. Some traders take more risky positions while others prefer to play it safe. If you don’t know how to read charts or understand how technical analysis works, then it’s probably better not to trade for now. Until you are confident about your investing strategy and have time to monitor all cryptocurrency markets, it’s better not to buy into cryptocurrencies.
Not diversifying
If you plan to buy into any other cryptocurrencies aside from Bitcoin, then make sure that your portfolio is diversified. Keeping your assets in just one cryptocurrency can be very risky. If the price of that token drops, you will be in a lot of trouble. With the way market prices fluctuate so rapidly, you could lose a lot more than you planned to invest, and this can lead to losses that are difficult to recover from.
Not having a strategy
What if you buy into an altcoin and it takes off? What if it is successful? Will you sell at once or hold on until gains turn into losses? All these things depend on your strategy as a trader. If you do not have any strategy for trading, then you need to look for a different currency altogether that has more potential upside for the future. You should also diversify your cryptocurrency portfolio across various coins and cryptocurrencies.
Before you start trading, you need to make sure that you have done a good amount of research on the cryptocurrency market. You will also need to understand your risk tolerance so that you can figure out how much money you are willing to risk. By doing this, you will be able to know when it is time to buy into cryptos or sell off for a profit.
