How to trade forex cryptos?
10 months ago forexsimulation Comments Off on How to trade forex cryptos?
Have you recently heard the news of the massive price surges in multiple cryptocurrencies worldwide?
If so, then you must know that this has made some people incredibly rich – even though it also means there are some severe losers. But nobody wants to lose money, so here is how to use cryptocurrency trading to your advantage.
3 Steps to great trading
The first step to successful cryptocurrency trading is getting yourself into a good rhythm.
For example, if you look at Ethereum (the second most popular cryptocurrency), you’ll notice that it’s had several significant rises and crashes within the past year alone.
Note: A common way for currencies like these to gain value is through buying them on an online exchange (for any currency, not just cryptos).
This way, users can profit from buying low and selling high, as some did with Bitcoin recently. But not only that – they can also speculate on the value of these currencies in general, seeing as how many of them are still quite volatile.
Make no mistake, though – it’s hazardous to treat cryptocurrencies like stocks or commodities. Because unlike more traditional investments (like gold), their values can fluctuate wildly on any given day (and for reasons that often do not make sense).
There is even the possibility that one may be able to spend $10 today and another $15 tomorrow – purely because of ‘how much people are paying for cryptocurrency!
Thus it becomes complicated to predict where things will go at times.
This volatility can seem incredibly daunting, but it can be taken advantage of. It brings us to our next point.
The second crucial step is: Don’t spend more than you can afford to lose (for now). And finally, the third step is to diversify your portfolio (i.e., don’t put all your eggs in one basket).
Neil’s trading is quite risky – especially with the vast fluctuations between currencies like these. And yet, there are some big names even behind this type of cryptocurrency trading – including Marco Streng.
He co-founded Genesis Mining (one of the most popular companies today for cloud mining BTC for people like Neil). So how does he do it? Well, first off, he started by investing a mere $250 on May 23rd, 2015, and by the end of the year, he’d made over $1,500! Then when BTC crashed in January 2016, he bought more… and ended up making another $2,000+ within a month (on top of what he had already gained).
Like any investment, it comes down to supply and demand – and Neil could profit off his awareness of that fact. Even though there is always risk involved with cryptocurrency trading (especially when dealing with non-traditional currencies), it can still be quite profitable.
So if you’re not planning on just throwing all your money into this endeavour – then, by all means, go ahead and give it a try! 4) If you’re new, don’t risk more than you can afford to lose.
Remember that it’s possible to turn $25 into $30,000 – but it’s also just as likely that you’ll lose your entire investment (and then some).
So if you’re not ready to take on such risks yet – or if this is your first time investing in BTC (or any other cryptocurrencies for that matter), then it might be wise to start small.
Diversify your portfolio
And remember how we said that there are several different currencies?
The truth is that these digital assets can vary widely – not only between themselves (for example, the difference between Ethereum and Litecoin), but they can fluctuate within themselves too.
Remember, this is not just like buying stocks or commodities – where you expect them to remain the same price year after year (although that certainly does happen occasionally).
Instead, this is more like day trading gold – where one may be able to ‘cash in’ on the fluctuations of different currencies rather quickly, with minimal cost involved too.
And yet even if it’s risky, there are still many people who do it successfully. Why? Because over time, these sorts of trades can generate severe profits for everyone involved!
So how does one manage cryptos?
- Check multiple sources before making any decisions.
- Do your research first.
- If you can, try trading with a demo account before using real money.
- Don’t let the fear of missing out get to you – instead, wait for confirmation.
And so, when it comes to such currencies, do not expect them to remain constant (so that they can be expected in the long term).
Instead, one must learn how to position themselves intelligently and take advantage of what they might otherwise perceive as simply random fluctuations in value.