Access to the cryptocurrency market is wide open now that mainstream brokers begin offering coins as commodities. You no longer have to go through exchanges to be able to trade cryptocurrencies; you also don’t need to exchange coins manually to secure your capital gain.
Since trading cryptocurrency is now as easy as trading other financial instruments like stock and forex, there are also more ways to profit from the market. Using technical indicators, you can better understand market trends, and make better investment decisions as a result.
Before you jump – head first – into cryptocurrency trading through brokers, however, there are several important things you need to know first. That is why we are going to review the best tips and tricks from expert crypto traders in this article.
Choose Your Broker
Not all brokers are created equal. Some brokers offer lower spreads. Others focus on lowering their transaction fees. Some let you trade using a certain software or platform, while others may have proprietary interfaces for crypto trading.
There is no definite rule to follow when choosing brokers. You just have to define your personal requirements and make sure that the broker of your choice meets those requirements. There are, however, some resources you can use to compare and choose crypto brokers.
InvestinGoal.com is one of the must-use resources if you are in the process of choosing a broker. The site is filled with reviews and testimonials, including detailed information on individual brokers. You can, for instance, find more information about eToro and the cryptocurrencies they offer.
Once you are certain that all requirements are met, do one quick check before signing up for an account. Read the terms and conditions of the brokers carefully in order to protect your investments. Only make an account when you are comfortable with the broker completely.
Focus on Certain Coins
The cryptocurrency market is just as exciting as other financial markets – if not more so, especially with recent market developments – but that doesn’t mean you have to tap into the whole market. What you want to do instead is select a handful of coins that you understand best.
Focusing on certain coins is a great way to limit the amount of research you need to do before making investment decisions. When you only trade certain coins, you can also be more meticulous with how you manage trading risks and organize your portfolio.
Ideally, you want an investment in a major coin like Ethereum or Bitcoin, followed by investments in growing coins. You also have the option to participate in ICOs as long as they are valuable enough for your portfolio.
Limiting the number of coins that you focus on is very similar to focusing on certain shares or forex pairs in other financial markets. A lot of investors use this approach to remain focused and to maintain relatively high profitability in the long run.
Leave Emotions Off the Trading Platform
The initial craze surrounding cryptocurrency trading – and using coins as investments – was mainly triggered by fear of missing out,or FOMO. A lot of traders (investors) entered the market emotionally, hoping to score a big win in a hot market. There is nothing wrong with this approach, but it’s certainly not a sustainable approach that you can use in the long run.
The more effective way to trade cryptocurrencies is without emotion. You need to enter the market with a clear plan and exit the market with a plan as well. When entering the market, you have to know your target profit and stop loss. You also need to know when to exit the market clearly.
Without emotion, you can avoid unnecessary losses; if you are emotional about a loss, chances are you’ll make more bad decisions and lose even more money in the market. Since every decision is made with clear reasons and objectives to meet, you can also learn from bad trades better.
The result is a more sustainable growth in the cryptocurrency market. With hundreds of coins to choose from, you will never run out of new coins to explore, which means you will never run out of opportunities to make money.
Don’t Buy Low
The cryptocurrency market is unique compared to other financial instruments. Prices fluctuate to different factors and rhythms, so you have to fully understand the market to make successful trades. While it may be okay to buy low in other financial markets, the strategy doesn’t always work in cryptocurrency trading.
Focus on analyzing market trends and movements to know the best time to buy into a coin. Buying low doesn’t mean the coin will immediately turn around and gain value, but buying when a coin is ready for a bullish trend guarantees profit.
Now that you have these tips and tricks in mind, trading cryptocurrencies through brokers will be even more fruitful. Brokers and their trading platforms offer plenty of opportunities for new and existing investors. All you need to do next is seize those opportunities.
