Presently, the internet is flooded with success stories of crypto trading, majority of people are thinking to pursue this opportunity of trading digital on popular crypto exchanges. However, one of the most important aspects which many new traders neglect is that the crypto market is highly volatile. New traders require some expertise or basic understanding to make a fortune out of this endeavor.
Therefore, this piece of writing enlists some useful trading tips for popular crypto exchanges that may help you trade smoothly when the market seems to be bullish.
Rules To Trade Crypto on Most Popular Crypto Exchanges
It is important for you to comprehend every tip in this guide and to process the reason behind it. Let’s get started.
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Educate Yourself About Crypto Exchange and Asset You Want to Invest In
Every guide and expert in the crypto market would advise you to educate yourself before investing. At first choose the cryptocurrency you want to buy. Conduct a thorough research to understand the true potential of crypto asset. After deciding about the type of crypto asset start looking for an exchange that supports that particular digital asset.
While looking for most popular crypto exchange, make sure to look for an exchange that has strict security protocols, competitive trading fee, and offers the service of cold storage.
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Invest only as much as you can afford to lose
As mentioned earlier, crypto market is highly volatile you shouldn’t invest a huge sum of money if you are new to this medium of trading. Gain some exposure and start small because bitcoin and other coins are volatile assets that can lose a big portion of their value in short period of time.
Therefore, experts believe that the best approach is to just commit small portion of your overall investment portfolio in desired crypto assets. In this way you will be able to manage your losses on popular crypto exchanges.
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Stop Loss
This function is must for every new trader because with every trade it notifies when to get out, whether you are making a profit or vice versa. When you establish a definite stop loss level it will help you cut your losses. You can say that it is one of the best tips that will help you succussed in your trading endeavors.
Choosing a stop loss is not a simple task, and you shouldn’t be carried away by your emotions. The best practice is to set stop loss at the original cost of your asset. For example, if you bought a crypto asset at $1,000, then set the same value as the bare minimum you are willing to trade your coin. This technique insures that in worst senecios you can walk away with what you invested in the first place.
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Don’t BuyCrypto Assets Just Because their Price is Low
One of the most common mistakes made by many new traders is that they buy a crypto asset just because its price is reasonable at that time. For example, it is like someone buys Ripple instead of Ethereum just because the latter is much cheaper.
Important Note: When you are making a decision to invest in a specific crypto asset consider its market cap instead of affordability as it will benefit you long term. The higher a coin’s market cap, the more suitable it is for investment.
Similar to conventional stocks which are gauged by their market caps you should select a crypto asset based on its market cap. To evaluate the market cap of a digital assets, use the following formula:
“Current Market Price X Total Number of Outstanding Shares”
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Final Supper Tip
This tip offers some effective and practical steps that will help you improve your trading sense, therefore, start implementing immediately for good results.
Take it easy while trading: Staying calm while trading is the core skill you require because maintaining your cool even when things seem to be out of hand can help you manage your losses and plan well for your next move. It might sound insane, but you’ve got to develop the skill of not trading emotionally, but objectively.
Make sure to activate the goal setting feature by making sell orders: In simple words this means that you determine your revenue targets by placing sell orders in the order books.
All thanks to the market volatility you do not how or when your order price will be match, and you might end up making desired profits. Apart from this, sell orders do not pose huge transaction fees as they are the main market “makers”.
