What Do You Need to Know Before Making Your First Crypto trade?

Cryptocurrency and best crypto signals markets may seem confusing for new traders as there is a lot of information and strategies. To start trading cryptocurrencies successfully and make your portfolio profitable, you need to have knowledge of the digital asset market. Haste may turn out to be a loss of funds.



Learning Strategies


Creating your own effective trading strategy is not easy, especially when it comes to novice traders who may not have a mathematical or economic education. It is better for a beginner to use the works of others and get acquainted with existing trading strategies.The expert advises not to focus on one strategy, but to choose several strategies which suit you the best and test them on a small deposit. There are a lot of strategies suitable strategies for beginners such as:

  • Dollar Cost Averaging 
  • Golden Cross/Death Cross
  • RSI Divergence Trading

 

Dollar Cost Averaging

 

Dollar cost averaging is a tool that an investor can use over the long term to build savings and accumulate money or assets. It is also a way for an investor to neutralise short-term volatility. 

For example if Bob invested $5000 in Bitcoin on January 1st, 2018.The Bitcoin price at the time was $13,800 per coin, which means that Bob now owns 0.362 BTC. Rob decided to invest $500 every month, for 10 month. In 10 month Rob has 0.61 BTC which is almost twice as much as Bob has although they invested the same amount. 

 

Golden Cross/Death Cross


A “golden cross” is a graphical pattern in trading in which a 50-day moving average (short-term MA) crosses a 200-day moving average (long-term MA) from bottom to top. In most cases, a golden cross indicates a change in trend and marks the beginning of a bull market and a signal to buy an asset.

“Death cross” – the opposite figure of the golden cross, i.e. is a potential signal of a bear market. This pattern consists in the fact that the short-term moving average crosses the long-term moving average from top to bottom. Basically, the “death cross” is a potential sign of a change in trend from bullish to bearish and a signal to sell an asset.



RSI Divergence Trading


RSI Divergence is a tool based on the Relative Strength Index, which automatically detects the phenomenon of divergence and underlines it with a colour change. 

 

Motivation and Time

A novice crypto trader should remember that it is easy to lose everything if you give in to emotions. Trading is a business and should be treated accordingly. It is recommended to begin gradually, to gain experience, to study constantly and not to hope for super profits, but to act cautiously and estimate your steps carefully. Also cryptocurrency trading should be approached thoughtfully and determine in advance the time of trading activity. Start by spending a few hours early in the morning to choose interesting assets and think about entry points. In the middle of the day you need to check the market situation and stop-losses.


Conclusion

 

In order to start trading cryptocurrencies you need to choose a couple of strategies and study them. Also it is necessary to understand that emotions shouldnt be involved in business and with enough time invested your portfolio will be profitable.

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