Trading and investing in crypto has become all the rage over the last two decades. Ever since the appearance of Bitcoin in 2009, people all over the world have become obsessed with cryptocurrencies and the liberty that a decentralized system offers for investments and trade.
While investing in crypto can be exciting and extremely interesting, it is important to proceed with knowledge and caution. As a decentralized market, it is highly speculative. Unlike currencies traded on the foreign exchange markets, where values are influenced by centralized governments, economic activity and global events, the value of Bitcoin and all other cryptocurrencies is largely determined by supply and demand.
With this in mind, Superprof has gathered some information for you to make better decisions when it comes to crypto as well as the best tips to find the right crypto tutor for you. Keep reading to learn more!
If you want to learn more about the types of cryptocurrencies and where you can study crypto in Seberang Perai, head to our article.
Tips to become better at Cryptocurrency
Profitable crypto trading requires a lot of attentiveness: it isn’t a gamble and nor should it ever be one. You need to make sure that you pay close attention to the market forces of demand and supply to be able to know when this or that tip applies. Although it’s an exciting market with a reputation for making the lucky few substantial profits in a short time frame, it is by no means easy to trade crypto, and there’s huge risk involved.
Here are some tips to become better at crypto that could make your life way easier:
- Have a strategy for crypto trading and make sure you scan out scams. Try to look critically at the project. How many users does it have? What problem does it solve? Does it have any links with industry? Avoid coins that promise too much without offering anything tangible.
- Start out Small: Proceed with caution and start with a relatively small investment. Cryptocurrencies, in general, are extremely volatile. Never trade with more than you can afford to lose.
- Do your research from reputable sources: It's important to buy a cryptocurrency that isn't likely to see its value plummet once it's no longer in vogue. You should take the time to learn about the coin for yourself and find out whether it has solid long-term potential. Make sure to research any investments that you're interested in to be sure that the underlying fundamentals are solid.
- Have a purpose to trade: It is important for you to have a motive or purpose for entering into cryptocurrency trading. Whether it be day trading or to scalp, a motive is always vital to drive you towards it. Get the idea clear that in cryptocurrency someone wins and someone loses.
- Expect the unexpected: Experienced cryptocurrency investors are accustomed to huge price swings that you often don’t find in traditional markets. By mentally preparing for these unfavorable, and occasionally terrifying, investment performances, the intelligent crypto investor will be able to act rationally instead of emotionally in times of unexpected price drops.
- Manage risk: Set limits on how much you invest in a particular digital currency and don’t be tempted to trade with more money than you can afford to lose. Cryptocurrency trading is a high-risk business and more traders lose than not.
- Set profit targets and make use of stop losses: Every trade we get into requires us to know when to get out, whether we’re making a Bitcoin profit or not. Establishing a clear stop loss level can help you cut your losses; a skill that’s very rare in most traders.
- Choose a Secure Wallet: Your bitcoin wallet is a holding pen for your digital assets so it’s important to choose wisely to ensure security and ease of access. There are multiple options out there, all with their own features and functionality.
- Understand what you're investing in: Before buying any coin, you should understand who established it, how and why it was established, what the likelihood of merchants accepting it is, how and why it is supposed to grow in value, and what technology the coins are based on.
- Keep tab on your risks: Be wise enough to not run behind making massive profits, but rather stay put and gather small profits and be on the cryptocurrency trading on a regular basis. It is a good idea to invest less on your portfolio in a market which is less liquid.
- Diversify: Common investment wisdom prevails when it comes to cryptocurrency investment - diversification is the key. Just as financial advisors recommend taking positions in multiple types of stocks and other investments, diversification is also essential for any healthy cryptocurrency portfolio.
- Be in it for the long term: Prices can rise and fall quite dramatically day to day. Cryptocurrencies aren’t going to go away, and leaving your money in the market for months or years at a time could offer you the best rewards.
- Don’t Buy Simply Because the Price is Low: Most beginners make one common mistake - buying a coin because its price seems to be low or what they consider affordable. The decision to invest in a coin should have very little to do with its affordability but a lot to do with its market cap.
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What Are the Risks of Cryptocurrencies?
While there are clearly many amazing opportunities for growth and expansion for crypto investors, it is also true that cryptocurrencies come with a high level of risk.
This has to do with the nature of the crypto market itself: since it doesn't obey or depend on any regulatory organism or government, it is ruled by supply and demand.
Also, there are many scammers and terrible deals out there that people should be aware of.
If you want to learn more about the history of crypto and how you can learn crypto in Georgetown, go to our article.
In order to minimize the possibility of you running into an unfortunate situation with crypto without knowing, we have outlined some of the potential risks of cryptocurrencies:
- They are high-risk speculative products: With spread betting and CFD trading you only need to deposit a percentage of the value of a trade to open a position. Profits and losses are based on the full value of the trade. The volatility of cryptocurrencies, combined with trading on margin, could lead to significant losses.
- Cybertheft and Hacks: Cryptocurrencies are held in digital wallets and traded through digital currency exchanges. Cryptocurrencies are particularly appealing to cybercriminals because of their online dependence and anonymity. To gain access to cryptocurrency wallets and trading platforms, criminals use a variety of phishing attacks.
- Human error can cost you: When buying cryptocurrencies, you bear more of the responsibility for the storage of your assets than you would with other investments. You will store your cryptocurrencies in a digital crypto wallet, encrypted with a private key.
- Pricing Variations: Compared with currencies, there can be significant variations in the pricing of cryptocurrencies used to determine the value of spread bet and CFD positions.
- Decentralization: In most online financial transactions, electronic money transfers are usually backed and mediated by a financial institution. So, if there's a problem with a transaction, you can easily contact them and resolve it. That is not the case with cryptocurrencies. Investors go without regulatory protection in the case of theft and hacking, and at risk of encountering cryptocurrency scammers.
- Unregulated Trading Platforms/Exchanges: The popularity of cryptocurrencies has resulted in an increase in the number of cryptocurrency exchanges and trading platforms. As a result, picking an exchange has become more difficult. The lack of regulatory oversight has aided the growth of scam exchanges and market manipulation in crypto trading.
- Environmental Risks: The minting process for many cryptocurrencies is very energy intensive, to the point that the carbon footprint of Bitcoin alone is comparable to that of entire countries.
- Taxation Laws: Cryptocurrencies are classified as capital assets, which means they are subject to the same tax regulations as stocks. Each country has their own laws around crypto (Malaysia does as well) and it is not exempt from tax.
If you want to learn more about why people invest in crypto and how to find the right crypto courses in Ipoh, head to our article.
Find the Best Crypto Tutor in Petaling Jaya
Now that you know a bit more about cryptocurrencies, some tips to become a better investor and the risks you could potentially encounter, it is time to dive into the world of crypto by finding the right guide: a private crypto tutor in Petaling Jaya.
Superprof is a website with a wide network of professional tutors on various subjects (including crypto) who are ready to share their knowledge with prospective students.
We have both in-person and online teaching available and our tutors all have varied experiences and track records that make them unique.
All you need to do is conduct a quick search for crypto tutors in Petaling Jaya and see the available profiles in your area. Don't forget to set clear goals for your crypto classes and get ready to learn with Superprof!
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