Say goodbye to the old year and welcome 2019 by becoming an improved crypto trader with these five tips, which you can apply to your everyday trading life.
Now that 2018 has finally entered the history books, recall how your experience in the cryptocurrency trading world went this past year.
You might have lost a significant portion of your funds in 2018 thanks to the crashing crypto market last year. Or maybe, you managed to earn a lot despite the depressing trends. On the other hand, you might just have heard of cryptos now and want your trading breakthrough to happen this new year.
No matter how you did last year, you can still improve your trading habits and methods. Follow these five tips that could help you become a better crypto trader this 2019.
1| Protect Your Funds Only Through Secure Means
According to the chief executive of blockchain security solutions provider Ledger, 2018 saw the biggest amount of cryptos stolen from exchanges in history. The total sum in question? Reportedly around US$865 million, more than double of what was stolen in 2017.
You can avoid becoming a victim of hackers in 2019 by refraining from storing your entire crypto fund on third-party storage—exchange platforms and the likes—for a long time. Instead, keep your cryptos on offline storage and share your private keys to no one.
If you could not avoid it, though, choose a reputable third-party service that offers at least two-factor authentication, among other security features.
2| Diversify Your Crypto Portfolio
It is not wise to put all of your eggs in a single basket as you could easily lose everything. This is especially true in the crypto market, given how volatile the prices of digital tokens usually are.
Take a look at Bitcoin (BTC), for example. In the past 12 months, BTC lost more or less 80 percent of its value. Just this November, BTC shed around US$2,000 inside one week. Imagine putting everything on Bitcoin at the start of that week and losing a great part of your funds in a single swoop.
One way you can avoid this is by investing in different cryptos. With this method, your entire fund will not depend solely on the performance of one token. As a result, the crash of one token in the market affecting your entire financial portfolio will be unlikely.
3| Be Wary of Online Scams
The year 2018 saw the rise of fraudsters and impersonators on Twitter, where they dupe unsuspecting crypto investors to giving away their digital assets for free.
How these scams usually work is they promote fake crypto giveaways, enticing token holders to send their cryptos in an address in exchange for a huge return. Because the giveaway is a fraud, the victims would receive nothing in return.
You should scrutinize closely the account offering the giveaway, the link to the promotion, and the promotion itself. In addition, always keep in mind that if the reward is too good to be true, then more often than not it probably is.
4| Always Use Your Head, Not Your Heart
One of the commonly used terms in the crypto industry is FOMO—fear of missing out. It literally means the fear of missing a trend others are currently benefitting from.
A crypto trader that has FOMO will invest on a crypto or continue to hold a token simply because he might unintentionally pass up on imminent profits. During the crypto boom in late 2017, analysts said that those who entered late in the market invested in cryptos mainly because of FOMO. Eventually, their late entry into a ballooning market caused them to lose profit as the crypto bubble popped.
Avoid becoming one of them by using rational thinking, not your emotions, in your investment options. Shape your decisions on your charts, analyses, and trading strategies, not on your feelings about a crypto. With that, every trading move you do has a logical basis that you can rely on in the future.
The most important piece of advice you will ever receive is to always do your own research on the crypto you want to invest in. You can learn more about a crypto through many means, from asking reputable figures for their opinions or reading about the digital token yourself.
While it is impossible to learn everything about an asset—the technology, the developers, and the whitepaper, among others—in a short period of time, having the knowledge to support your investment decisions is infinitely better than going in on the market blind.
Remember that these suggestions are not surefire ways to earn you more profit. However, these five could change your trading habits from last year to better ones this year.