Since the introduction of Bitcoin in 2009, the cryptocurrency market has grown significantly over the past ten years. The cryptocurrency market has seen its share of good, bad, and ugly, but it continues to exist. Given their continued evolution and growing acceptance by the general public, cryptocurrencies are probably here to stay.
This mainstream movement was recently boosted by the world’s largest asset manager, BlackRock. The company submitted an application for the United States’ first-ever spot Bitcoin ETF. An investment that can be bought and sold on the stock market is a spot bitcoin ETF. It allows you to easily invest in bitcoin and tracks its price, just like regular stocks.
How to Become a Crypto Trader: A Step-by-Step Guide
1.Educate Yourself on Cryptocurrency: Before entering the crypto market as a trader, knowing precisely what and where your money is going is essential. Cryptocurrency has been around for over a decade; thus, a ton of information, including online courses, blogs, and whitepapers, is available for potential investors like you.
Find out everything you need to know about the crypto-blockchain market ecosystem. Read up on what common crypto terms mean and the different types of trading available. Watch Youtube videos about blockchain, NFT, web3 and cryptocurrency. Listen to crypto podcasts and follow thought leaders in the crypto industry on social media.
Whatever your preferred method of consuming information, ensure that you apply critical thinking to the knowledge being shared.
2.Select a trustworthy cryptocurrency exchange, then create a wallet:Selecting a reputable and secure cryptocurrency exchange is non-negotiable. Research different exchanges and read their reviews online. Look at the team behind the exchange. Furthermore, as a cryptocurrency exchange, we have established solid infrastructure and strategies to safeguard our customers against hacks and other security breaches.
3 Start small and Diversify:Investing in various crypto assets is the definition of diversification. Stanley and Thelma, for instance, each have $1500 to invest in their cryptocurrency portfolios. Stanley invests the entire $1500 in one cryptocurrency, while Thelma spreads her $100 across fifteen different ones. If the market plummets or crashes, Thelma will probably lose less money than Stanley. Splitting your portfolio into low-risk, moderate-risk, and high-risk assets is advisable. If you have more high-risk investments, there’s potential for huge gains and equally huge losses. Conversely, more low-risk assets will bring minimal losses but low returns. Regardless of your risk appetite, your portfolio should be as balanced as possible.
4 Take Risk Management Seriously: Risk management is one concept both beginners and seasoned traders must always prioritise. As a new trader, you must understand the best way to manage risk. You must also set up a strategy that helps you minimise loss.
For instance, your risk management strategy can involve establishing strict rules on when to hold and when to sell. You could decide to sell only when a coin or token has risen 20% or hold as long as the coin doesn’t fall below 15%.
In the crypto investment market, beginners should consider keeping a specific amount of money aside for trading and using just a small part of it to make the first couple of trades. With this approach, they will still have money to trade if their investment moves against them. In essence, always have a risk management plan and some money set aside to offset any losses you may experience during cryptocurrency investing.
5.Learn from Your Experiences: Expect a learning curve in crypto trading. Analyse your trades, identify mistakes, and learn from them. Continuously improving your strategies and skills will lead to better results in the Long run.