If your looking for tips for trading cryptocurrency on Robinhood you’ve landed in the right place. Many people think they are too late to invest in cryptocurrency and that the money has all been made. However, they couldn’t be more wrong. The cryptocurrency market has never been more popular and that is why so many young people are now investing in it. There is a lot of money to be made with cryptocurrency and blockchain technology, as long as it is invested correctly.
While there are many things you should know about crypto before investing, it shouldn’t stop you from investing. It seems complicated but it is actually not. In fact, there are many reasons why you should invest in crypto now!
Why Get Involved in Cryptocurrency?
Cryptocurrency can be used to pay and invest. The special thing about crypto is that it is decentralized, which means that there is no bank or intermediary present. In the case of bitcoin, for example, you transfer money directly to another person (peer-to-peer) without the intervention of a third party such as a bank.
Bitcoin is interesting because the rate of bitcoin variates often. At the same time, that makes it a bit exciting to invest in this cryptocurrency, because you never know what bitcoin’s value is going to do. The value can increase dramatically, but also decrease dramatically.
There are at least a few advantages of bitcoin that remain unchanged. For example, paying with bitcoin is easier than paying with a regular debit card. Today, you can pay anywhere in the world with this digital currency and it is cheaper to make international transactions with bitcoin than with regular currency.
Why Use Robinhood for Crypto?
If you are wondering where to trade crypto, there are many brokers you can choose from. We recommend using Robinhood for crypto mainly because of the user-friendliness. Not only is the application on your mobile phone a pleasure to use but Robinhood is also not charging any fees when buying or selling any cryptocurrencies.
In this article, you will find 5 tips you should use when trading cryptocurrency. We know that these tips will help you make the right decisions in the world of trading crypto.
Tip 1. Don’t Be Greedy and Set Targets
With every trade we make, we need to know when to stop. No matter if you win or lose money. By setting targets when making a trade, you can limit your losses and optimize your profits. This is a skill that most experienced traders possess.
Choosing a stop loss level, for example, is not something you do randomly, and it might be useful to note here that you should not let emotions take control over your trading behavior. Remember that only well-thought trading decisions will help you be profitable when trading crypto. On the other hand, if you’re aiming to exit a trade after you’ve hit a certain minimum profit, stick with that. Do not be greedy. Luck is not always on your side!
Tip 2 Stay Away From “FOMO”
FOMO is known among all traders and is short for “Fear of Missing Out”. This is one of the most infamous reasons why many traders fail. Our second tip is to never chase a trade. Instead, try to make a trade based on fundamental decisions.
You should always be aware of the moment when everything seems to be perfect and everything indicates that you have to go for the trade. This is the point where the experienced traders smile and watch you buy the coins they used to buy at very low prices.
Guess what follows? The crypto coins end up in the hands of small traders and then due to an oversupply, the value drops dramatically, and that is when the losses start to pile up. So, wait for your chance to get in at a price of which you think is reasonable.
Tip 3. Risk Management
Do not trust anything that seems too good to be true. This is especially true of market gains when trading cryptocurrencies. Wise traders never run towards massive profits. No, they really don’t! They prefer to stay put and collect small but sure profits from regular trades.
Investments are unpredictable. Even those that seem to offer infinitely positive returns can crumble under certain economic conditions. Cryptocurrencies are also unpredictable.
Just as you can make thousands of profits a day, the opposite is also true. You can lose everything you invest in digital assets in the blink of an eye. So, the best way to get past such uncertainties is through diversification and risk management. Try to keep the risk as low as you can and try to invest in multiple currencies instead of a single one.
Tip 4. Do Not Buy Because The Price Is Low
Most beginners make a common mistake to buy crypto because they consider the price to be low or affordable. Take, for example, someone who chooses Ripple instead of Ethereum, simply because the latter is much cheaper.
The decision to invest in a currency should have very little to do with affordability, but much more with market capitalization. Conventional stocks are measured by their market capitalization, which is evaluated using the formula ‘current market price X total number of shares outstanding’. This is also the case for cryptocurrencies.
Tip 5. Be Patient
The last tip we give you might sound simple but can be difficult for most traders. If you want to be successful, it is important to focus on the longer term. And thus, to have patience while trading. If the chart looks good and you think the cryptocurrency is in an upward trend, that’s great.
But if we are talking about a weekly chart, it will probably be weeks before you see serious gains. And so, you have to be patient because, meanwhile, other assets can also look very promising. So, hold on until your plan works.
Final Thoughts
The cryptocurrency market has never been more popular and that is why so many young people are now investing in it. There is a lot of money to be made with cryptocurrency and blockchain technology, as long as it is invested correctly.
While there are many things you should know about crypto before investing, it should not stop you from investing. In fact, there are many reasons why you should invest in crypto now!
Cryptocurrencies can still be really profitable. You just need to know what you are doing. Spread your risk, do not let your emotions take control over your decisions, and most importantly, be patient. If you follow these simple rules, then we are sure you will be successful in trading crypto. You can also grab a nice first time signup bonus on Robinhood by clicking here.
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