‘And maybe we can all be investors…’
Heyy Steemers, I’m back and today I wanted to put together a little guide for new traders and just people that would like to re-invest the profit that they make here.
So, let’s assume you wrote 2/3 articles and earned 20/30$ and would like to re-invest it and maybe even learn a little trading.
The following steps are going to guide you:
STEP 0: Getting ready
If you earned money on here, it will probably be in steem or steem dollars, both of which are not as tradable and liquid as other currencies. So the first step will be to convert them in BTC, due to the high use of this coin for trading other altcoins.
Set up and account at any exchange, after which, send your steem/steem dollars and convert them in to BTC (Bitcoin).
An exchange I suggest is: https://poloniex.com/exchange , just because it has several coins and doesn’t have the highest fees, and because steem/steem dollars can be traded on it.
STEP 1: Doing your homework
This is the most important part; just like it was back at school. The first step is to do research about the industry. The best sources include:
- https://coinmarketcap.com/ : where you can learn about the volume trading and market cap of the different currencies. If the currency isn’t well known, and stable in the first 100 cryptocurrency, it might not be advised to start off with something that risky.
The next step includes researching companies that have been around for a few years, have good developers and maybe even have a good platform behind it such as Steemit. You should find a total of 5/6 cryptocurrencies to watch and track.
For example : Ethereum , Factom , Steem, Litecoin, Dash … as they are all know, top 100 market cap and mostly have blockchain services correlated.
You can use sites such as: http://www.coindesk.com/ to read daily news and keep up to date with events that occur.
STEP 2: Playing the waiting game and jumping in
The next step it to watch they cryptocurrencies for weeks, maybe months, until we notice that they are trading at a low price. In this moment we can try to estimate as low as they could go based on past events.
For example, let’s pretend Litecoin has been trading at 0.012, we have to wait until it fixes at a lower price before buying it. It might take a few weeks to see it going to a low trading value of 0.008. After setting the target, all we have to do is wait.
Bear in mind, never spend more than 15-20% of your capital on one asset, and don’t buy all at once, sometimes it may drop even further. So what I suggest is buy 35/40% of the total money you want to spend on it at any given time.
STEP 3:Setting targets
After you bought the coins, the price will continue dropping or start rising eventually. That is when you decide to scale-out. Set some targets, such as selling 40% of coins bought at a 10% price profit, while another 30% at a 30% price profit. By doing so you average out the risk and make easier profit.
STEP 4:Enjoy and improve
Once you become confident, expand your portfolios and maybe even invest some more. There are plenty of videos and tutorials out there, but when deciding to trade, keep it simple and in terms you can understand.
And rule number 1: NEVER BE IMPATIENT. If something is within a trend, be patient and wait till the value goes up.
MATT
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