Cryptocoin exchange is a new form of trading and investing, but how exactly do you leverage it? Here are six strategies you need to start using today.
If the words cryptocoin exchange rank somewhere in your head with thermonuclear astrophysics – and not even the fun kind with Tony Stark in it – then you should reevaluate your outlook. You’re leaving money on the table. For a sense of how much, the cryptocurrency market is currently worth more than JP Morgan.
Yes, that’s JP Morgan!
6 Cryptocoin Strategies to Start Using
The exchange isn’t astrophysics. You’re just making it harder than it needs to be. Here are eight tips you’re definitely not doing and definitely should be doing to make your life easier.
1. Understand the Power of Cryptocurrency
With great power comes great responsibility.
Uncle Ben knew it. Obviously, so should you.
It starts with knowing the power of the cryptocoin exchange. See, we have a tendency to equate the bitcoin exchange to stocks, except that cryptocurrency isn’t a stock – it’s an asset.
Actually, the only similarity between the stock exchange and the coin exchange is…well, the exchange.
Except, not really. Some cryptocurrency exchanges, the most popular ones, are centralized. But, newer exchanges are becoming decentralized, which means they can’t be shut down or manipulated easily. Decentralized exchanges offer more security to the investor. This trend will likely continue.
Free yourself of the belief that cryptocurrency is like stocks. You’ll already be one step ahead of everyone who hasn’t quite figured that out yet.
2. Have a Reason for Entering Each Trade
We’re not saying every trade happens for a reason. We’re saying every trade should happen for a reason.
There are little fish traders and there are big fish traders. If you don’t know which one you are, you’re a little fish trader.
In this case, your best chance is to go into every trade with a clear idea of why you’re doing it and what your strategy is. Otherwise, you will get eaten. Or your coins will.
The coins getting eaten will hurt worse than you think, especially since bitcoin passed the $10,000 mark.Those coins don’t come cheap anymore.
Chances are, you don’t have the capital or spare cryptocurrency sitting around to make foolish mistakes. Pro tip: don’t make foolish mistakes.
Go into every trade with a gameplan. Or know when to look at the exchange and not make any trades for the day.
3. Understand Market Conditions
And while we’re on the subject of watching the exchange, let’s have a chat about market conditions.
Listen. The cryptocoin exchange is volatile. Bitcoin is a volatile asset. If you don’t treat it that way, it will teach you to treat it that way pretty quickly.
The basic premise is this: bitcoin and altcoin have an inverse relationship to their value, which sounds counterintuitive. Basically, when bitcoin is more valuable, then altcoin is less valuable, and vice versa.
Oh, and when bitcoin is volatile, we tend to get a bit foggy on market conditions.
You know what you don’t do in a fog? Drive in it. Don’t trade in it either.
4. Have a Target and Stop-Loss Level
This fits in with having a reason for entering every trade.
You should also have a target and a stop-loss level. Because if the cryptocoin exchange is about anything, it’s definitely about strategy.
It’s sort of like blackjack. You want to get as close to 21 as you can without exceeding it, but you also want to be closer to 21 than the dealer.
Your target refers to your clearly articulated goal for profit for the day.
Related: Cryptocurrency It’s Just Candy Crush