It can be overwhelming when you first arrive at an interest in cryptocurrency.
The subject is fast-moving, vast, and highly technical. There are many intricacies to consider, and you won’t always find quick and easy help for your answers. In fact, a segment of the people online is openly hostile to your interests!
That’s why you need to understand a few crucial things before you get eaten alive.
There Are Absolutely No Guarantees, and You Could Lose Your Shirt
There are absolutely no guarantees with cryptocurrency. Sure, things are starting to clean up a bit, but most of the protections you find in the “real world” do not extend to cryptocurrency. That means you may end up dealing with many groups with self-interest at heart, and they may not give you accurate information to consider your investment.
Even in regulated markets, where reporting duties are onerous, there’s no guarantee that you won’t lose money. So, the chance that you will lose every penny on a gamble for cryptocurrency is always possible.
Not only can someone mislead you about a cryptocurrency, but you can also lose the cryptographic keys that control access to your funds. You may also suffer a hack or loss of currency on exchanges. The types of ways you can lose your money are very high, and you must keep this in mind at all times when you attempt to navigate your way through the minefield. Make sure to study cybersecurity, because the more you know about the subject, the more likely you’ll be to defend yourself.
Things May Move Too Fast for You
If you find yourself continually chasing prices as they rise, you’re probably feeling the effect of the speed at which the markets move. With millions of participants (and many of the bots,) trading on exchanges will run at a fast rate. Markets dip and rise quickly. When you don’t have a plan for your trade, you may find yourself wondering what to do next. That’s a terrible place to be and usually happens because you’re rushing to keep up.
The best thing to do is slow down and pick your spots. You most likely will not miss a “train” or “rocket.” Instead of winging it and following the crowd because of the excitement of movement, be rational and ponder on the merits of a trade before making one. That’s the fastest way to slow down everything to the point where you can earn high returns.
Beware the Pump and Dump
Pump and dumps are more accessible to organize and execute online than offline. That’s why you’re going to run into more than your fair share of them. The problem is, they are not designed to make you money. Pump and dumps are carefully orchestrated to capitalize on FOMO so they can prey on your psychology. Groups that organize these events purchase the crypto they’re planning on pumping long before they announce it to you. Sure, you may be able to eek out a profit if you sell to another sucker fast enough, but it’s a game of musical chairs.
When the music stops, the pump ends, and the dump begins. If you find yourself on the wrong side of this fiasco, you are coughing up hard-earned money fast. As exciting as it is to look for ICOs, cheap coins, and “sure-fire” winners, most of these will end up being Fool’s Gold or worse. Stick to the bright and sunny streets of Crypto World. If you don’t, you’ll find yourself knifed in one of the back alleys.
Consider the Source When Taking Advice
There are so many helpful advisers out there that are happy to dispense wisdom about cryptocurrencies. The trouble is, many of them have a vested financial interest in every recommendation they make. There’s an inherent conflict of interest for them that you should not ignore. People may or not may disclose their positions so you may as well take their advice with a grain of salt.
This warning doesn’t mean you should discount information from reputable sources. You just need to keep in mind that when people have a profit motive, they will do their best to SELL you. Some of them may be holding the bag themselves. If that’s the case, they will offload it to yours.
Sure, It’s a Cliche, but You Truly Must Do Your Own Research
Surely you’ve heard this one for awhile, but it is the case. You cannot rely on information without at least checking the details. Many cryptocurrencies are extraordinarily technical, and their price movements bear study. If you only perform a superficial level of inspection, you’ll pay the price. There are many horror stories of those who don’t yield this lesson, so don’t be like them. You have the time to study up before submitting a trade. You’re making a permanent investment decision, and the only way to avoid loss is through prevention. That comes from talking yourself out of the bad trades, so you have money when the real opportunities come around.
It may take you some time to track down all the information you need. The time spent is worth it. Losses in crypto can get massive in a big hurry. When a trade goes against you, you’ll be dealing with a lot of emotions. That’s why having a well thought out rationale for your investment is the way to calm your nerves so you can press on.
If you’re jumping in and out of trades, you probably are already making some mistakes. There’s no better time than now to dig in and discover the facts about the best ways to trade and invest. You will also want to perform thorough research about the cryptocurrencies you plan on buying. If you do this, you’ll avoid bombing out and lose all your capital. NOTHING else will sap your enthusiasm faster than losing a significant sum of money.
There is a bright future for crypto and for people who invest in them. Once you establish your operating procedures, you stand to have surprisingly good results. Thanks for reading.