The Coin Stock market and the Cryptocurrency market is the same thing; it’s just some people refer to it like that. It is where digital assets (cryptocurrencies) like Bitcoin, Ethereum etc., are traded.
In 2020 and part of 2021, the cryptocurrency market has grown manifolds, and many newbie investors have joined the league. Initially, it can be a bumpy ride for any newbie until they fall and get back a couple of times before getting a sense of the ecosystem.
Though the best trading and investing experience come with trial and error and a lot of research, knowing a few tips and tricks can come a long way in giving you a smooth experience.
The no. one thing that people struggle with is deciding whether they want to be traders or investors.
However, what you should know is:
It’s nowhere written that a trader can not be an investor, or an investor can not be a trader. You may love the thrill and short term gain that trading has for you. While you somewhere are also an ardent investor that likes to stick to some of their investment.
Though a trader and an investor have totally different preferences, styles and risk appetite, you can be an investor and a trader too. You can also choose to walk one path. Do whatever works best for you; you don’t have to be rigid.
2. Find the Balance
Once you decide how you want to approach crypto stocks or cryptocurrencies, you need to find a balance.
A balance between how much you are involved in specific cryptocurrencies shall be carefully monitored. Though the entire market, in general, is quite volatile, specific cryptocurrencies have greater risks than others.
E.g. Bitcoin is a safe haven, while some altcoins have a greater risk.
It could be because of multiple reasons, so know your risk appetite and then make your investment choices. It is crucial to find a balance between high risk and low-risk cryptocurrencies.
Cryptocurrencies with less liquidity and credibility are generally high-risk assets. Assets with greater liquidity and credibility are generally low-risk investments.
3. Have Goals and Layout Strategies
Setting investment goals at the initial stages will help you be on track with your investments and manage it effectively. Once you set a goal, you can then work out a strategy to achieve it.
It will help ensure that you are not randomly putting money in investments and have a set strategy to achieve the desired outcome.
Not having goals will lead to making some abrupt decisions that may not always be in your favour. Having a goal to look forward to also motivates you to keep pushing your investment game and keep learning.
4. Join Crypto Communities
Cryptocurrencies live and breathe communities.
There are thousands of thriving Bitcoin, Blockchain and Crypto communities that like to talk about the potential the technology holds.
Being a part of these communities can give you a sense of understanding of the market concerning specific assets. You get great insights on these channels where people who diligently follow the space share their thoughts and opinions.
While these communities can be a knowledge bundle for you, watch out for some spam communities. Some groups do pump and dump strategies and scam people, so beware of that.
5. Battle Volatility
Volatility is both the boon and bane for the cryptocurrency market. It is the extent to which the price of an asset will move.
Learn how to cope with volatility when it’s not in your favour.
Diversification is one of the ways that can help you cope with it. Stablecoins are also a great option to escape volatility when the market is experiencing downturns. Try and find ways and strategies to battle volatility; it’s a skill that you will appreciate learning.
6. Play on Arbitrage
Arbitrage is taking advantage of the price difference of the same asset on multiple platforms and markets.
For cryptocurrencies, every exchange has price differences for the same cryptocurrencies. Many traders use it to their advantage and perform arbitrage trading. They buy from one exchange at a lower value and sell it on another exchange for a higher price. The difference is their profit.
It is a widely practised strategy by traders to make instant profits. You can learn more about crypto arbitrage trading here.
If you have just begun your crypto journey, I would recommend you to keep learning about the space. You can dig through the blogs on KuberVerse to get a better insight on the topic. Constant learning is the key to having a successful crypto experience.
KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing.