Many people invest in crypto currencies and it has become increasingly clear that this is not just a passing trend. It’s also clear that it’s potentially very profitable — even if it’s not without risk. So, before you invest in crypto currencies, it’s a good idea to have a goal in mind and know how much you can lose.
Not many people ask themselves why they want to invest. Most people will say that they want to make money quickly, while others will say that it is a future investment in blockchain technology. For others, they may invest just out of curiosity. These are some of the possible reasons people usually have, and for which they will need different strategies.
For short-term profits, it makes sense to buy low and sell high — but there is more to it than that. You have to choose coins with high liquidity, have a sense of risk management, and rebalance your portfolio as often as possible. Without a plan, you will not produce good results.
Likewise, if you bet on future technology, you are likely to make a long-term investment, which means you will survive, or struggle. That’s what many bitcoin and ethereum holders do, but that doesn’t mean it’s the right strategy for you and your goals. And even this goal still needs research. There are many investment opportunities, and many of them will not succeed.
Whatever your reasons, don’t just risk your money because you “feel” like it will work. Have a reason for why you invest, how much you invest, what you invest, and the time you take to make a purchase.
Once you know why you are investing, ask yourself what you want to achieve. For example, how much profit do you want to make? To fulfill your goals, how much time, effort and research do you want to expend? Before you invest, know what your purpose is and do it rationally. Because most people will not have much free time for research, you can use a cryptocurrency trading tool to assist you in making decisions.
Another thing to remember — if you have stock trading experience, do not consider cryptocurrency trading to be the same thing. Cryptocurrency is not stock. You can use tools such as RSI (Relative Strength Index) and ADX (Average Directional Index), which will help, but cryptocurrency is much more volatile and markets tend to be far more unstable than the stock market. Think of FUD / FOMO: fear, uncertainty and doubt / fear of missing out.
If you can maintain a head level, plan and stick to your plan, while managing risks well, cryptocurrency investment may be of great benefit to you. How involved you get depends on your goals.
Remember, whether cryptocurrency is a good investment for you depends entirely on what you think in the future will be like and not what cryptocurrency growth has been like in the past.