No matter how much experience you have in crypto trading, you cannot protect yourself against the unexpected price swings in this market. Recently, Bitcoin has shown great volatility in the market with daily fluctuations and it causes a huge psychological impact on investors around the world.
If you are new to the concept of crypto trading but are willing to make great profits out of this market, the article below may help you better. Here we have listed five proven tips to help you start 2022 with a progressive foot in the crypto industry.
Don’t plan to withdraw money before 2 years
Let us consider that you are planning to invest $5000 in the crypto industry, but maybe there is a great possibility of an emergency requirement of $2000 in the coming months, maybe for car maintenance or some travel needs. Now if you do 100% allocation to crypto-currency, you may have to sell the crypto position at the wrong time in the future, maybe during the bottom phase of the cycle. Therefore, one should always invest a thoughtful amount in crypto trading with a long-term plan. Generally, a two-year vesting plan is a must.
Know when to step out
Eventually, many beginners in the crypto industry make wrong decisions when they see bottoms or seasonal variations. Many even try to increase the bet size at the wrong time to manage the losses. But this psychological imbalance can affect your investment capacity wrongly and you may lose some potential opportunities. When you are not in a position to keep up, it is better to move out and take a walk. Organize your life and then return with a new survival potential.
Follow dollar cost average strategy
Not just beginners, but even professional traders also lose a lot of money due to fear of missing out. They try to build a quick position in the market and this urgency sweeps them away. But when everyone is availing great returns consistently and the coins are showing incredible growth, you cannot sit ideal. The best idea is to follow a dollar cost average strategy that allows investors to buy the same dollar amount per week or per month. It will also help you to avoid the sudden pressure and anxiety of adding a position at the wrong time in the market.
Use limited indicators for market analysis
You may find unlimited indicators in the crypto market such as directional movement index, Bollinger bands, Fibonacci retracement levels (more info), and many more. If you start following all of them, you may get confused about the consequences. Experienced traders make careful decisions to pick the best indicators; some may pay more attention to the crypto price chart and others consider correlation tracking in the market. None of these techniques can be considered right or wrong; one just has to be consistent with the tracking and make careful decisions based on the analysis.
Keep on investing in winners
Here comes the hardest lesson for all investors. We all know that the crypto market is highly volatile so you need to follow an effective strategy to cover your losses. Well, instead of selling winners, sometimes it is also good to buy more of them. It is sometimes possible to get even a 400 or 500% gain by holding some profitable positions.
If you start following these simple ideas and investment advice from experts, it may help you to ensure quick returns when you trade here.