Many of us never did any currency trading before starting here. Here are a few beginner tips to get you started.
This guide will cover the pieces you'll need to get started (like exchanges and wallets) as well as some common mistakes made by beginners. I don't consider myself an expert by any means, but I did have to learn a lot of these basics the hard way.
First off...If losing the money you're going to trading with will cause you a problem (like not paying bills) then DON'T trade with it. Not only will you run the risk of losing some money you needed, but the pressure to make money off it right now often leads to poor decisions.
Q: What's something most people do wrong when they start cryptocurrency trading?
The mantra of trading is always buy low and sell high. But our emotional reactions often make us do the opposite. A prime example of this is:
- You're holding some Steem (or whatever crypto) and you just saw the price go down, meaning you've lost money. The emotional voice in your head starts screaming "Oh my god, Oh my god!! I'm losing money! I have to sell NOW!!"
So think about what just happened here. The price was already down and you're emotions are telling you to sell since you're losing money. Then when you see it's gone back up, you feel that you should rebuy it because you don't want to miss out! In this case...you sold low and bought high, the opposite of what you want to be doing.
Now I'm not saying there isn't a time to sell when the price is down, but have a logical reason why you're doing it.
Don't trade on emotional reactions!!
Q: Do I need to create accounts somewhere to let me trade? Should I keep all my money in there?
- Cryptocurrency Exchange Account: You'll need to signup at a cryptocurrency exchange like Bitshares, Poloniex, Bittrex or at one of the other exchanges. Most have their own pro's and con's, so it is worth finding which one(s) you're most comfortable with. This is where you will send you're money to and actually do the trading. Often it's better to set a price you want to buy or sell at instead of just using the first available (lowest sell or highest buy.)
- Cryptocurrency Wallet: It's generally recommended to NOT keep all of your money on an exchange. There have been hacks before where coins were taken from accounts on an exchange. So investments you plan on holding for a longer period of time are better off in a wallet.
- There are many online wallets out there (Coinbase is just one example that holds Bitcoin, Ethereum, Litecoin and Bitcoin Cash), each differing somewhat with what cryptos they hold.
- There are also "cold storage" options which are hardware devices that store your crypto. This is a physical item (like a flash drive) that you can attach to computers to move the currency in and out of. The Nano Ledger is one example, though there are others available. Often these are the more secure option.
Q: How should I start? Which crypto should I buy?
Personally, I watched the charts on the exchange (i.e. Poloniex) and a listings site like Coin Market Cap or World Coin Index for a while before even putting my money in. This let me get used to what I was actually looking at. Once I got a bit more comfortable, I put in my first small amount. START WITH SMALL AMOUNTS!!
I also went through the material at Baby Pips on Forex (foreign exchange) trading. This a fantastic, *free resource you can go through explaining basic all the way to more advanced topics. One to make sure you look at is on Chart Patterns to help give you an idea if a crypto will go up or down in price. (Nothing is ever perfect, even these patterns!) START READING AND ASK QUESTIONS!
As far as which crypto to buy..I really can't tell you. It's tricky and a bit dangerous to give trading advice. It would suck to have some one come back and say "I lost money because of you!" So always remember What you invest in is ALWAYS up to YOU!!
Please upvote and resteem if you found this guide helpful.
The full list of my guides can be found HERE.
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