Cryptocurrency tips

The best crypto trading tips come from years of practice investing in cryptocurrency markets.

Fortunately, with this handy guide, any beginner can learn how to avoid common cryptocurrency mistakes and make the most of their money.

In this article, we will explain:

• Six cryptocurrency tips and trading strategies

• Six common cryptocurrency mistakes and how to avoid them

• How to decipher crypto jargon

Six cryptocurrency tips

1. Have a strategy for crypto trading

It isnt easy to separate genuine cryptocurrency recommendations from the scams; there are lots of sharks out there waiting to take your money.

In 2020, according to the UK fraud-alert service Action Fraud, reports of crypto investment scams surged by 57% year on year to 5,581, with investors losing a total of £113m.

So when youre confronted with a lot of information about a cryptocurrency, take a step back from the hype.

Try to look critically at the project. How many users does it have？ What problem does it solve？ Does it have any links with industry？ Avoid coins that promise the Earth but havent delivered anything tangible.

2. Manage risk

Some people offering crypto trading tips might not have your best interests at heart. So dont get stung making the same mistakes as others.

Set limits on how much you invest in a particular digital currency and dont be tempted to trade with more money than you can afford to lose.

Cryptocurrency trading is a high-risk business and more traders lose than not.

Find out: Is a bitcoin crash coming？

3. Diversify your crypto portfolio

It doesnt pay to have too much invested in one single cryptocurrency.

As with stocks and shares, spread your money out among different digital currencies.

This means you dont risk being over-exposed should one of them plummet in value – especially as the market prices of these investments are highly volatile.

There are thousands to choose from, so do your research.

Find out more: Investing in worldcoin cryptocurrency

4. Be in it for the long term

Prices can rise and fall quite dramatically day to day, and novice traders are often duped into panic selling when prices are low.

Cryptocurrencies arent going to go away, and leaving your money in the market for months or years at a time could offer you the best rewards.

5. Automate purchases

Just as with regular stocks and shares, it can help to automate your crypto purchases to take advantage of pound-cost averaging.

Most cryptocurrency exchanges, including Coinbase and Gemini, allow you to set up recurring buys.

This is where crypto investors tell the platform to purchase a fixed amount of their preferred cryptocurrency every month – for example, £100 worth of bitcoin. It means they get a bit less of the currency when prices are high, and a little more when prices are low.

That takes the stress out of trying to time the market by either buying a currency at what you think is the lowest possible price or selling at the highest price. Its something that even market professionals struggle to get right.

6. Use trading bots

Trading bots can be useful in some circumstances, but they dont come recommended for beginners looking for crypto investment tips. Often, they are just scams in disguise.

If real algorithm existed that timed your buy and sell trades to perfection, everyone would be using them!

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