A Beginner’s Guide To Crypto Trading: 5 Tips to Follow
I joined crypto back in 2018. Having no mentor at all, I learned the basics myself and liquidated my small account multiple times. Though washing up my account was depressing, what kept me going was the potential that crypto offered.
That said, the only good thing about those failures was the crucial lessons that I learned. Eventually, I got better at crypto trading and, gradually, recovered my losses as well.
However, only if I had guidance, I believe I could’ve avoided all those losses. Anyway, I’ll share a few important lessons, or you can say tips, that every beginner crypto trader must know.
Without further ado, let’s get started:
1. Use a High-Speed Internet Connection
It doesn’t matter which crypto exchange you use; you’ll always need a high-speed internet connection to execute trades. I believe most beginner crypto traders undermine the importance of a swift connection.
However, it’s one of the fundamental things that complements your crypto trading. For instance, even the most reliable crypto exchanges require a stable and fast connection to update charts in real-time. Plus, don’t forget that you might also use additional tools, such as TradingView, to read charts and monitor other fundamentals of cryptocurrencies.
Additionally, to avoid unnecessary delays in executing trades, a blazing-fast internet is a must. Well, I learned it the hard way after one of my trades went south. I almost lost every penny in my wallet, my spotty connection failed to close a trade.
Anyway, it was a blessing in disguise because after that horrible experience, I switched to altafiber internet. It’s a fiber connection that offers symmetrical speeds, i.e., similar upload and download speeds, which execute the trades perfectly and keep the charts updated.
2. Never Pay Attention to FOMO
FOMO (Fear of Missing Out) is likely the biggest threat to a beginner’s wallet. Once you dive into the crypto world, you’ll see that people spread all kinds of rumors. One day, they’ll say that Bitcoin will make an ATH (All-Time High), and the next day, you’ll see them buying the exact same coin.
So, I would never advise you to trust anyone while trading crypto. And most importantly, avoid FOMO. Most of the time, the panic in the crypto market is artificial and has the sole purpose of liquidating small accounts.
Also, rather than being a victim of FOMO, I would advise you to stick to your strategy, which I’ll discuss next:
3. Master A Single Strategy
It’s good if you learn different strategies to trade crypto. But is it really necessary? Not at all!
I’ve seen beginners burning the midnight oil to learn different strategies. However, what they don’t realize is that only a single crypto trading strategy can make them a profitable trader. As a beginner, your focus should be on chipping in small profits.
And for that, there is no need to master every single crypto trading strategy out there. Not only is doing so extremely complex for a beginner, but also a time-consuming task. However, it’s advisable to explore different trading strategies, so that you can choose the one that you find best.
Also, you must understand that no crypto trading strategy is foolproof. At some point, it might fail. However, what matters the most in those situations is how thoroughly you understand your strategy and its working. Because if you’ve mastered it, you’ll understand the mistakes that led to those losses.
4. Never Be Greedy
One of the primary, or should I say, the whole purpose of crypto trading is to make money. However, I’ve seen that most beginners are driven solely by the motive of earning money. And, hence, they jump onto every opportunity, even if it’s a risky one.
Well, don’t be greedy, because with extreme volatility, the crypto market takes only a few minutes to liquidate accounts. Instead, stay grounded, focus on gaining small profits.
Also, it’s not a bright idea to jump straight into the futures without testing your mettle in spot trading. Learn how to stay patient while the market is in a free fall, and only when you believe that you’re ready, start future trading.
5. Diversify Your Portfolio
There are tons of cryptocurrencies you can trade today. While some crypto coins, such as Bitcoin, Ethereum, or Solana, are backed by strong fundamentals, some are meme coins, such as Pepe and Doge.
That being said, it’s never a good idea to put all your eggs in one basket and invest in a single crypto project. I believe consolidating all your investments in a single cryptocurrency is a risky business. Simply because if it gets hits, then your portfolio, along with your investment, will go to waste.
On the flipside, diversifying your portfolio and investing in different projects might offer more sustainability. Even if one of your crypto coin dips, the others might spike and cover the losses.
So, these are the top five lessons, or tips, from my crypto journey. Also, before I wind up, there’s one more advice I want to share: Never go for a revenge trade because you might end up losing more this way.
Whenever you suffer a loss, sit back and analyze your mistake. And, only execute a trade when you clearly see an opportunity. This way, you should be able to minimize unnecessary losses, and at the same time, keep your account safe from getting liquidated.
