No-risk Cryptocurrency Trading Tips For Novice Market Players

If you’re thinking of trading cryptocurrency, you’ve come across an excellent read. As per buidlbee you should read up on a beginner trading strategy. To trade, the best thing to do is a lot of research.

Here are some great tips to get you there. You need to pick a trusted exchange for your trades, you need to diversify your portfolio, manage your risks, automate the trades, and consider your financial capacity.

1. Trusted Exchange

There are a ton of exchanges out there, and you need to pick the right one to trade. Usually, the best exchange to pick is the one that is worth the most. The one that holds the largest volume of USD. Here are the top picks:

• Binance: It’s the biggest cryptocurrency exchange according to volume. At the moment, it’s almost $5 trillion. There are over 600 trading pairs, and you can trade in fiat currency. Also, there’s margin trading.
• OKEx: With a volume of $960 billion, it’s the second-largest cryptocurrency exchange, and they have 390 trading pairs. There’s no fiat currency trading, but you can margin trade. It’s safe and trusted, but it has fewer features than Binance.
• UpBit: The current volume is about $800 billion which makes it the third-largest cryptocurrency exchange. There are 290 trading pairs available, but it only supports the South Korean Won.
• Coinbase: It takes the fourth place and the volume of exchanges is valued at a little over $775 billion. There’s a possibility to pick from 533 trading pairs, and the exchange supports fiat currencies.

2. Diversified Portfolio

Now, once you pick one of the mentioned exchanges, the first thing you should do is thoroughly research the cryptocurrency to invest in. Pick cryptocurrencies that are prone to rise in value. Also, make sure that you diversify that portfolio as much as possible.

Diversifying the portfolio is a risk management strategy. If one of your crypto assets loses a bit of its value, another one might gain value, and this can even out your investment. So, you won’t suffer major losses.

3. Risk Management

Apart from having a diversified portfolio, it’s also great to set boundaries for how much you invest in which crypto. Trading cryptocurrencies is quite risky, and you need to know how to manage that risk.

A useful investment tool is a type of cryptocurrency called a stablecoin. These coins almost always have roughly the same value, the value that revolves around $1. This means that you can use them as a safety net when buying another crypto.

4. Trading Automation

Another useful tip for beginners is to automate their trading. Once you’ve researched the cryptocurrency to invest in and you’ve diversified your portfolio while also maintaining a stash of stablecoins, you can automate your trading.

Think of it as an employee earning money for you. However, even an employee can make a mistake. Be careful not to set parameters that can ruin you and make sure you maintain and update them regularly.

5. Financial Capacity

Finally, don’t bite more than you can chew. Don’t invest more than you can afford. For trading, there are systems where you can borrow money and invest it. However, if your investment fails, the debt becomes pretty real.

Of course, it’s a win-win situation when you invest and you win some money. But, for a novice investor, this is rarely ever the case. That’s why we’re going to discuss the next tip a little. It might be the last, but it’s the most useful one.

6. Practice on Certain Platforms

Even though we discussed serious exchanges, consider trying your trading skills on a virtual exchange. Try out crypto trading before you do. There are platforms such as eToro that let you practice trading before you invest real money.

Here’s why you should do that. You don’t take a boat to the middle of the lake and jump expecting to learn how to swim. You start with shallow water until bit by bit you learn how to swim above it, then you go in the deep.

Conclusion

There you have it. Manage your risks, diversify your portfolio, pick the right exchange for your trading, and practice before you start. Never go over your financial capacity, and once you gain a little experience, automate your trading.