Have a Strategy
There is a thin line between genuine cryptocurrency projects and scams so it is extremely important to conduct due diligence on every opportunity.
Reports of cryptocurrency investment scams surged to 7,118 in the first nine months of 2021. This was up 30% on the whole of 2020, according to Action Fraud, with the average loss per victim at GBP 20,500.
This is why it is extremely important to be cautious when faced with potential cryptocurrency investment opportunities.
Some of the questions you should aim to answer include how many users does it have? What problems does it solve? Don’t invest in a project because your friend says it’s the best thing since sliced bread.
Manage Risk
It is important to set limits on the value invested in one particular cryptocurrency and always aim to trade with money that you can afford to lose.
Cryptocurrency trading is high-risk and more traders lose money than don’t.
Diversify your Portfolio
There is a saying “Don’t put all your eggs in one basket”. This applies to Cryptocurrency as well. This is especially important as the market prices are highly volatile.
Have a Long-Term Horizon
The volatility in the cryptocurrency markets is second to none and beginner traders often panic sell when prices swing against them.
The best outcome from good cryptocurrency projects are usually yielded over months or years and Investors/Traders should be prepared to hold on to their Investments to yield the best rewards.
Automate Purchases
There’s a ton of good that can come out of automating Cryptocurrency purchases and take advantage of dollar-cost averaging.
Most exchange platforms have Dollar Cost Average functionality built in. The idea is its better to spend time in the market than trying to time the market.
