Bitcoin has been on a slump in the past couple of months. Many investors and traders fear the outcome of this continuous downward trend. This slump is also hurting new investors from joining the cryptocurrency exchange market. However, there are speculations and predictions that, if followed in wisdom, maximise the potential for profit making. Smarter ways of investing in the cryptocurrency market do exist.
Some methods can be used to analyze patterns of various coins in the cryptocurrency market, resulting in data that can be useful in determining the next big coin. This article explores factors that will help both investors and traders make better investment choices resulting in good returns. Aelf will be used as a reference point in certain parts of this article.
Understanding The Cryptocurrency Exchange Market
All disciplines have their set of unwritten rules and the variables allowed in their guidelines. The cryptocurrency exchange market also has its own set of unwritten rules that experienced traders follow to determine the trading patterns of specific cryptocurrencies listed on the exchange. Some traders have analytical minds that can efficiently study data and come up with a set of data that determines a pattern in trading variables of various coins listed on exchanges. Getting this analytical eye only requires a trader to follow specific steps in the analysis of a potential investable asset. Here are some of the steps traders need to develop.
Plan Your Trades
All journeys involve serious planning to avoid any mishaps along the way and to prepare for any unforeseen circumstance that may arise. Investment in cryptocurrency is also a journey, a long one in fact, especially if a trader would want good returns. “Buy low, sell high” should always be the key to your cryptocurrency investment plan.
Planning involves researching every cryptocurrency a trader plans on investing in. For new traders, they have to learn what they are doing. It starts with understanding what cryptocurrencies are and how they work. The roadmaps and possibility of the success of these projects should also be considered. For example, a firm such as Aelf, when reviewed, checks out most of the boxes that a new investor may have such as a potential future and a unique service to the market. Investors also have to know their purpose and target for trading in the cryptocurrency exchange. Investors should set their targets realistically after understanding how the cryptocurrency market works. The set goals would help define the volume an investor will be aiming to trade daily and the risks that are involved.
Contingency plans are also important. Investing blindly in anything is not advisable. Understanding that there are risks involved while investing, it is crucial that traders plan for any scenario that may arise.
In planning, the source of funds also has to be taken into account. The outcome of participating in cryptocurrency trading is never assured; when purchasing cryptocurrency, responsible financial judgment is advised. Purchase what is within your financial reach and only grow as you grow. This is essential for surviving in the crypto exchange industry.
It is common to find many traders over-trading. This is how losses are easily made. Over trading results in loss of revenue through multiple transaction fees plus other charges that traders may have to part with. Experienced traders will advise that trading only after huge market movements is likely to be more profitable. However, these movements would require patience as some of the cryptocurrency markets build up at a slower rate compared to other stock options. It is more profitable to trade over big price movements than it is over small changes.
One way to ensure that your trading is responsible is by setting trading goals. Set price markers for the coin you have purchased; whenever the coin hits that market, sell a predetermined volume. This will help keep the discipline in trading.
Trade With No Regrets
Most traders usually enter the cryptocurrency exchange market with only one goal, to make profits out of the price movements. This isn’t bad; however, keeping an open mind is likely to lead to a more positive trading experience.
Markets cannot be controlled by our will. Other factors play against our will while trading. Being able to accept that you cannot control the value of a cryptocurrency or an altcoin will make it easier to handle whatever the market throws at you. For example, bitcoin had a tremendous high; then it started going down, it may have gone lower than what analysts had predicted, however, keeping an open mind that it is possible creates a mental cushion for traders. This helps in the overall trading mentality in the exchange market.
Trading with no regrets also means accepting that better deals are possible even after you make what may seem to be the best deals in the market.
Never Chase Hype
Chasing hype may lead you blindly to severe losses in the crypto exchange market. Experienced or smart traders would instead anticipate the hype that follows it. Traders need to analyze market trends to determine which coin is likely to be the next hype train and hop on before that moment arrives. Anticipating hype puts a trader at a better position of gaining from the hype that is to come. Joining the hype train too late may result in buying high and not selling at a considerable profit. This especially applies to new traders who, in most cases, purchase the most noticeable coin. These are usually excited at the time and are the easiest ways to lose money in the market.
Avoid Picking Tops
These are those coins that have already made substantial gains and are sitting comfortably at the top of exchanges. They may seem appealing in terms of where they have come from and possibly where they are heading to, however, for a new trader or any trader who wants to make significant profits, avoiding such coins would be best. Going for coins with the lower rating but with a promising growth would likely lead to more profits in a much shorter time. The coin at the bottom is likely to make gains that the coin at the top has already made.
Other Factors to Consider
While the points stated above are certainly important especially in regards to valuing a project by price or for trading opportunities, the fact remains that in the larger body of work, there is still several just as significant factors still to consider for a successful project. These include:
GitHub is seen as the central source for a projects latest development and software capabilities. It is often referred to by investors as a strong reference to the currency health of a project and more importantly- their commitment. Aelf has been ranked as the fifth most active project according to GitHub commits, thereby cementing its current developmental attitude, especially in this prolonged bear market.
A project is only as good as its team, so the saying goes and it’s paramount that a project has a committed, intelligent and hardworking team. A well-rounded team who has the projects vested interests at heart, will certainly be a winning factor.
The community of course is what brings enthusiasm and excitement to any project, and an active and encouraging community must be fostered for a successful project. The numbers don’t have to be at the levels of Ripple or Tron, but more importantly a real passion for the project will go way beyond the size of the community.
These are not the only trading tips out there; however, they are arguably the essential trading tips especially for newbie traders. Before venturing into any crypto investment, one has to consider the possible risks that will arise from trading blindly. Most traders despise cryptocurrency due to the bad choices they made while participating in the exchange market. By implementing these tips, it is likely that a trader will avoid unnecessary losses. The trader is also expected to be more prepared for the market shifts in the cryptocurrency exchange industry.
As well as the token price, there are still various just as significant factors that need to be attended to when trying to be part of a successful project. The fundamentals of a project in combination with its technical analysis is what’s needed to maximize success. Just following technicals is unlikely to be a solution, especially in the longer term. Choosing a project which has achieved milestones according to their roadmap should be consideration before making a choice.
Do I know the price of Bitcoin in three years? No, but now you have an idea of finding out what coin may be as profitable as bitcoin was in three years.
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Disclaimer: Please only take this information as my OWN opinion and should not be regarded as financial advice in any situation. Please remember to DYOR before making any decisions.
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