Bitcoin just tanked overnight, and while it may seem like the king of crypto might just be dethroned, true traders know that this market dip is the perfect opportunity to make massive profits. Last year, Bitcoin’s value dipped as low as $3,000 per unit, only to breach the $50,000 per unit resistance level a year later. The recent dip in Bitcoin’s value is due to the mass selling that happened once its value went beyond $50,000 per unit. The dip in Bitcoin’s value has also caused the values of all other cryptocurrencies to drop.
While this presents an attractive investment opportunity, as many cryptocurrencies are now more affordable, it’s important to keep certain crypto trading rules in mind. Here are the golden rules that you should never forget.
Prioritize Cybersecurity
Even when blockchain is almost unhackable, there are far too many points of interaction that are vulnerable to hacking attempts. Crypto wallets can be compromised through phishing, crypto exchanges can get hacked, and your computer can also be infected with malware that is programmed to log your keystrokes. Never give out your secret key, and if possible, always store the majority of your crypto in a hardware wallet instead of leaving everything at the exchange.
Always Do Your Due Diligence
As with all investments, it’s important to always do your research before committing your money into an exchange. You should never allow the information around you to sway your buying decisions, as you are solely responsible for your profits and your losses. Every investment option entails inherent risks, but the best way to manage those risks is to do your research through fundamental and technical analysis. This way, you always know the risks involved with what you’re investing in.
Never Obsess Over Price
The inherent volatility of cryptocurrencies make them difficult to predict. The day-to-day changes in cryptocurrency don’t matter (unless you’re day trading), but the general idea is that daily price fluctuations can easily sway your decisions. Come up with a plan and stick to it to reap the best gains from your investment.
Don’t Invest Money That You Need
While many people have made life-changing amounts of money from trading crypto currencies, this is more of the exception than the rule. Crypto trading is inherently risky, and as such, you should be prepared to lose some money while trading. Never invest money that you need for an upcoming expense as this can prove to be a painful lesson.
Keep an Open Mind
Finally, always remember the reason why we all started trading in crypto. It’s important to give other cryptocurrencies a chance. Never wish for other cryptocurrencies to fail. While this won’t necessarily have an effect on the performance of the cryptocurrency, it will have an effect on your decision-making, which is something that can prove to be a costly mistake. For example, when comparing Litecoin vs Ethereum, you could potentially lose out on profit by subjectively favoring one over the other.
While crypto will always be volatile, the truth that people have made money by trading crypto cannot be denied.