You are here because either you are new or probably you have some doubts in your mind which are unsolved. Like you know about the hype regarding Bitcoin or other popular coins and you wanted to be one of the first investors of a world-changing piece of technology.
Also, you have seen your colleagues or other people talking about the profits they have earned from cryptocurrencies. So, I will not go into detail about what attracted you to this area, but I will make sure to provide you information about how successful investors thinks and implements and some common human nature inferences and market trends.
you may or may not be aware of the amount of money being raised and transferred to the cryptocurrency space. At the time of writing, the entire crypto market 24 hr volume was $50,754,102,010 and Total marketcap $189,017,590,090.
So this figure is enough to attract people.
So If you know there are lot of exchanges out there that allow people to trade between different types of cryptocurrencies.
After the Bitcoin rose to new heights, many new cryptocurrencies entered the market. Now there are total 2164 different cryptocurrencies and tokens that are currently being traded in the open market and you are confused which cryptocurrency to choose for investment.
You may have analyzed some of the charts for these cryptocurrencies,like coinmarketcap and you saw that a few coins were showing absurd profits. So, you decided to enter into the world of investing in cryptocurrency.
The rest of this article is provides you important tips how to avoid dangers of cryptocurrency investing, and how to think like a successful investor.
There are lot of people in social media sites who claim they are experts in things related to cryptocurrency.
Only few of them are genuine and are identified by name and they have some animated character or figure or they are high profile people. And few others are honest enough to give the disclaimer that they are not any ‘financial advisors.’
But, there are a lot of individuals who absolutely don’t have any clue what they are talking about and they claim they are expert. Blindly following them without verification will lead to huge losses
There are many users who lost their valuable assets listening to this fake experts. So be careful and check for authentic expert by seeing their followers and history.
Be aware of Fraud groups
A successful investor avoids any groups which are dump and pump. Yes, that includes any groups like ‘prediction groups’, ‘btc groups’, whatever maybe you will not get rich there. The targets and predictions of this group are hardly supported by any concrete analysis. Many groups fail to provide sources of the news and prediction.
Probably, if you follow these groups, you will end up losing a lot of money in the long-term. Following such groups will make you an ultimate loser as an investor sooner or later because that will lead to a point where you would not be strong enough to continue following them.
Sometimes, there will be any predictions which are made will turn up successful because there is a continuous flow of money into the crypto space. This happened during the December 2017. However, every time, it will not be the same. Like now, anyone following ‘signals’ would likely to lost over 40% from their initial position in just about any given cryptocurrency over the last month except Bitcoin which has touched $6000 mark again.
Research more and more in detail.Gather all the information. Dig deep and find out the history of particular currency.
Why you need to do this? because, there is a lot of money we can make from crypto, there is no denying this fact. But, the majority of people who are getting this money are those who know what they are doing.
Now if those people happen to be delivering the same information to you, then it is most likely that they have already made their moves and have taken their stakes in those coins before informing about it to you. So, if you are lucky enough to follow someone that knows what they are talking about, it is more than likely that you will find yourself in control anyway.
One of the important reasons why research is crucial is, you should know everything about what is going on and not have to depend on individuals. Then, you will be able to follow these ‘experts’ for what they are really good for, a supplement to your research.
Let’s take an example, As I know who can chart correctly and who can not. I follow the ones that are genuine and I will view their chart or I’m looking to see if there are patterns that I have missed in mine chart.
Based on the overall knowledge, I can see what has been posted and validate whether the suggestions that the user had is legitimate or bullshit. Sometimes, I learn new things that which I didn’t have any idea before.
Another thing how research helps is it gives us perspective on cryptocurrency that most people do not have and also it assists significantly with your fundamental analysis.
What to Research?
Research means to find out each and everything related to it. You need to find out how cryptocurrency works from its fundamentals. Start from who is Satoshi Nakamoto?. Why did he create Bitcoin? What was the reason to create Bitcoin? Which technology did he use? How does blockchain work? How do hash functions work? What is a hard fork? What is a chain split? What is ‘Bitcoin Core’? Who is Vitalik buterin? Who is CZ binance? What is Proof of Work? How does fees work in the system? What is Cardano? What are mainnet and testnet? What is Chinese government policy on cryptocurrencies and exchanges at this moment? What is the total market cap of cryptocurrencies? What does US stock exchange think about cryptocurrency? What is the future of lightning network? Who is Roger Ver?
The above questions are just a fundamental aspect of everything. You need to understand and read as much as you can about technical analysis also.
You need to research about what technical chart analysis. Who are the famous traders? What are successful trading strategies? What is the MACD? What is the Relative Strength Index(RSI)? What are Bollinger’s Bands? Will I be able to identify the name of each line of Bollinger’s? What is the period? What are the advantages of looking at different time frames? When should I look at a logarithmic vs. ‘regular’ line chart?
What does it mean by ‘bear’ and ‘bull’ market?? What are oscillators? Can I use all of them? How do I plot Elliott Waves? What’s the success of trading based on this strategy versus holding?
Does this look like a lot? Isn’t it. But to tell you there’s no shortcut. If you want to earn all that money that exists out there, then you need to do the research.
This will require a lot of time?
Yes! What do you think you will do, just enter into this market, make millions and go away? No way,th . You need to make sure that you know as much possible as you can know. The more knowledge you have, the smarter your decisions will be in every aspect.
Also, just by looking at a chart, you will be quickly able to assess how the cryptocurrency future direction will go.
Moreover, by reading the whitepaper of an asset and the promises it has made and looking at it’s development team, you will determine from that alone whether it is genuine or not. You will come across different players in the crypto world and understand how things work.
If you lack the will to do that research and just want to invest, then, you will be always in danger zone in the form of loss of money that you have invested.
Self acclaimed Advisory/ Experts
This advisors are self acclaimed without any deep knowledge, and it is highly illegal to be a financial advisor without an official license.
The basic question is if they call themselves crypto experts, then why they ask you money to run a group. By having so much knowledge, they would be ruling the crypto market. If not that, they should at least have some profits in their investments.
The successful investors never go behind this half knowledge Gurus, They create their own theory by learning and observing the market pattern.
So, I tell you to ask yourself why you are paying others to ‘teach’ you about this space which you can learn by yourself (Google).
Listen to your guts, don’t fall for fake guides
For the experienced investors out there, when you have done your homework, analyzed the charts and the coin itself and you know that you have made the right choice, then listen to your guts.
There will be times where you will think the value of a coin will go down when everyone else is thinking it will go up. In those moments, you will feel may be they are right. Sometimes the price of coin would go up where you thought it was going down. You will be depressed, people will laugh at you, don’t worry, stick to your decision, usually the predictions is reversed and you will find you have made the right decisions.
This is what successful investor do, they research, follow genuine experts and listen to their heart.
Some of the experts basic tips before investing
- Choose the coins you want to invest for the long-term
- What is the price of your cryptocurrency ? Check and compare multiple cryptocurrency exchanges.
- Why you are confident about your cryptocurrency choice?
- Think whether your investments are safe with the developer team?
- How long you should stay in this? Do you have any exit plan?
- How the price of cryptocurrencies is affected?
No one is responsible for your loss except you, so think carefully before investing.
Crypto trading can make you more bucks, if you are updated with all the information.
I can only say, act smartly!!! Why? Because you don’t want to lose your money at this point of time.